If that team is self-aware, they’ll know when they’ve reached that point. If they’re not, they might find themselves repeatedly hitting their heads against a brick wall, until the penny drops. That’s not necessarily their fault, it’s because there’s often a romanticised version of entrepreneurial success where the original founders are the ones to take the business through every stage of growth. Back in the real world, that rarely happens (despite some obvious exceptions, Facebook, Microsoft etc.)

Inflexion points that inform the kind of leadership a business needs don’t follow a neat schedule and come in all shapes and sizes. A period of significant growth or expansion into new geographies or industries may find the current team out of their depth. Equally a tough economic outlook or loss of a major client contract can require a new set of skills. 

The flip side of those ‘romantic’ early years

The early years of running a startup, with a young, possibly inexperienced management team who are figuring things out together as they go along can make for heady stuff. The staff may also get caught up in that addictive startup energy. Strong bonds and loyalties are formed and there’s a kind of unspoken promise that everyone’s on the journey together.

The flip side of the coin is that often, the people in charge, because they are inexperienced, may be spending too much time discovering how to do things. Reinventing the wheel is not a good way to run a business. It’s also a dereliction of duty to employees (and to the senior team) who are being deprived of the right to learn and to grow by working with professionals who have “been there, done that.”

A senior team facing up to making tricky redundancies for the first time for example, quickly realises its limits. Putting itself and staff in situations they don't know how to deal with, can create serious issues as well as knocking confidence and causing anxiety. When too much of this starts to happen things can quickly snowball, causing stress all around. For someone who’s well-versed in handling stuff like this, it’s barely more than a hiccup in normal proceedings. 

Why founders have blind spots – and what to do about them

The majority of people who are employed are accountable to the hierarchy above them. Their line manager will change as their career develops, but reporting into someone is a constant.

That forces the reportee to be reflective and open to feedback. Founders/founding teams on the other hand might work for years where they're not really accountable to anyone. Sure, they have a duty to their team and to clients, but because they sit at the top of the organisation accountability takes a different form, especially in instances where there is still 100% executive ownership.

And because they are in a situation where they don’t generally have to receive and take on board feedback (and that’s why 360-degree feedback is such a great idea!), over time they can become less open-minded and less self-aware.

Damaging blind spots can easily develop where founders lose sight of what they can and cannot do or why their or their team’s way is not necessarily the only way or best way, simply because there’s no one to tell them. To avoid this, they need to take an interest in their own growth, as well as that of others. Leadership or life coaching can be hugely beneficial as part of a personal growth culture driven from the top down. 

The dangers of failing to act

Waiting too long to bring in senior talent may lead to too many poor judgement calls or a business run by benign neglect. A toxic environment can easily build. When we lift the lid on these kinds of organisations all sorts of dysfunctions may reveal themselves – Lencioni’s book/model covering this topic is useful:

• A collective lack of accountability – i.e. I didn’t do what I promised but neither did he/she/they, so it suits us both to just brush it under the carpet;
• Resentment from staff, some who are perhaps more capable than those in charge;

A senior leadership team (SLT) that:

• Is dominated by one or more large egos or has been built through favouritism and loyalty/length of service/friendship instead of on actual capability
• Doesn’t know how to do internal comms consistently, meaning that confusion reigns
• Is obviously not aligned on one or more fundamental areas
• Does not manage out poorly performing staff
• Either instigates toxic behaviours or allows things such as bullying, harassment, favouritims to go unchecked
• A situation where an absent leader hands over control to someone internally that lacks capability or just leaves a vacuum;
• Where a previous attempt to hire externally has gone wrong because of poor cultural or capability fit

Why looking outside the organisation is the right thing to do

We’ve explained why it can take time for founders and their senior teams to grasp their shortcomings and realise they’ve arrived at an impasse. Equally it might take some kind of disaster to land the message. Then they start the search in earnest for the person or people with the skills to help them take the business forwards.

That might look easy on paper, but it needs to be carefully planned for. It’s also worth saying that for some founders and senior teams who have been there from the start, it’s tantamount to an admission of failure or weakness. They might feel hostility at the thoughts of a new senior hire(s), interpreting it as an attack on their status.

Instead, everyone needs to view it as a positive where access to additional capabilities and skills is an opportunity to witness and learn from best practices, first-hand. Complementary experience will be additive to the business and lead to greater conviction around decision-making.

The right kind of senior hire can often signal a turning point in the fortunes of a business. It’s in everyone’s best interests to build a leadership team that has the right balance of opinions, experience and skills. It’s a proven way to create a high-performance, high-growth business that will deliver for everyone involved.