Many founders start a business because they are brilliant at their craft. They know how to build the product, close the deal or solve the problem better than anyone else. But what they are rarely trained to do is lead a growing team of people and successfully scale.
That gap between technical brilliance and leadership capability is where businesses often stall. 78 per cent of companies fail to scale effectively – not because of market fit or funding, but because the systems and leadership required for growth were never put in place.
Dane Hudson – a former CEO across five industries, a university lecturer and leadership coach – says while vision gets a business off the ground, it’s discipline that keeps it moving. He’s observed a distinct pattern while mentoring and coaching more than 1000 CEOs and leaders across Australia and Southeast Asia.
“You need a vision to inspire yourself. You need to have a vision to inspire your team, to bring investors on board. You need a destination,” Hudson explains. “However, to get there, you need to put the building blocks in place.”
Leaders Need Discipline To Execute Their Vision
In his new book, Discipline Beats Vision: How to Be the Leader Your Company Needs, Starting Monday, Hudson drives home the difference between vision and discipline with a road trip analogy. “You might be planning to circumnavigate Australia,” he imagines. “That’s a wonderful vision, but you actually need to plan the steps in between,” he points out. “What’s our journey going to be? What’s our vehicle going to be? Who’s going to accompany us?”
He believes the same concept applies in business, and while it sounds simple, his experience suggests it’s not universal. “You need to have a clear vision about where you want the business to end up. You need really clear steps and you need to have discipline to actually execute each of those steps to take you to the vision.”
The word ‘discipline’ may carry negative connotations for some founders, but Hudson says his definition carries no judgment, especially for overburdened small business owners. He uses ‘discipline’ interchangeably with ‘deliberate,’ to convey acting with intention.
“When I was working. I was very focused on creating discipline in the organisation,” he says, since he was hyperconscious of the fact his attitude would ripple throughout his workforce. He illustrates this with another analogy, this time from a high school physics class: Newton’s Third Law Of Motion, where for every action, there’s an equal and opposite reaction. In other words, staff would echo his behaviour. “Oftentimes, leaders aren’t necessarily aware of their impact on the team,” he says.
The Bottleneck and the Shadow of the Leader
What makes scaling particularly hard is what Hudson calls the shadow of leadership. “The shadow of the leader is effectively positional power,” he explains. “Everything you say and do is exaggerated by the fact that you’re the leader.”
A leader’s observance of boundaries sets the tone for the whole business, he argues. “If I arrive at a meeting 10 minutes late, if I have the meeting go 20 minutes over time, and I’m a bit more of a chaotic leader, it’s really hard therefore for me to create a sense of accountability in the business, because I’m not demonstrating accountability.”
Gaps in leadership skills often result in a leader unwittingly holding back growth. “The big question is whether they realise they’re the bottleneck,” he says. “A lot of people don’t know they’re the bottleneck.”
The reasons are understandable, Hudson, says, role-playing a scenario he feels is all too common: “I might have started this business. We’ve got small revenue. I want to be careful managing how much cash we have in the bank so I don’t employ talented people under me. Then there’s a big gap between me and the rest of the business, so every decision goes through me.”
In that case, he says a reality check is essential. “I, as the leader, need to realise I’m the bottleneck. I’m the one that’s constraining our ability to scale,” he says. “I need to understand what I’m good at, what I’m not good at.”
The best way to gain insight is through feedback. “I had a number of 360s and they were a great revelation for me,” Hudson recalls. “The first 360 ever got, I said it was completely wrong. Then, by about 3 weeks in, I realised it was probably quite accurate.” He now uses the same approach in coaching CEOs and finds the home truths spark the right amount of self-reflection. “Fortunately, none of the ones who had the bad 360s walked away. They all were inspired,” he says.
But, he adds, self-awareness is only the starting point; the harder work is the discipline of building structures and habits that will change behaviour.
Building Capability Beyond the Founder
A deep-dive into a leader’s skill set should make their business’s hiring priorities clearer, Hudson says. He recounts common conversations with clients. “They might say, ‘Hey, I’m a person of hope, so I’m really comfortable building trust. I’m not really good with setting targets and following up.’ So, a critical part of scaling is having the ability to bring on complementary people and actually lead those people with the complementary skills.”
But complementary hiring only makes sense once a founder knows what they are building. Hudson recommends asking fundamental questions that recognise the fact not every business owner wants to expand. “Are they happy with the current size? Do they want to create more space and time in their life to do different things, or actually, do they want to truly scale the business?”
From there, he uses a framework borrowed from McKinsey – strategy, structure, people and process – to help founders audit what needs to change. Do they have a strategy pointed at that vision? Is the organisational structure right, including people with enough seniority to absorb some of the load? And do the systems and processes enable decisions to be made without everything still flowing through one person? Once there’s a clear map for change, he says, it becomes easier to act on it.
Even business owners without growth plans will benefit from building a stronger workforce, he argues. “If you can learn how to build capability in your team, that gives you time, and that time might be to dedicate to other activities outside of work.”
Hudson attributes his own success as a 5-time CEO to the fact he was always trying to improve and evolve. “To be a great leader, you’ve got to be a relentless student, and you’ve got to be a relentless student of leadership,” he says. “That’s probably an area where I really was my strongest. I continued to learn and grow and change.”
He also urges founders to build a support network: a mentor, a peer group or even a personal relationship that can offer perspective. “Make your partner your partner,” he says. “We all need a team to support us on our journey.”
