Every company is unique—in size, vertical, culture, and more. Still, despite the uniqueness of every company, most fall into two categories when it comes to growing the business: building and optimizing. Generally, businesses need leaders who can build a playbook for growth from scratch, take an existing framework and optimize it for success, or reinvent a framework to keep pace with changing market conditions. While all business types require leaders who can grow the business, the skills and strengths required of leaders vary widely between the two.
Throughout my career, I’ve found myself in roles that required me to be a builder and an optimizer. Both have come with their own set of challenges and risks, as well as opportunities. Along the way, I’ve learned what skills to bring to the table and how to navigate the nuances between building and optimizing.
Here are some tips for leaders who may be trying to figure out if their company needs someone ready to build from the ground up or an optimizer ready to make the most out of what already exists.
DEFINE YOUR PERSONALITY TYPE
It’s hard to argue that much of who we are as leaders is tied to who we are as people. Before you can begin determining what type of leader a company needs, I think it’s important to understand your personality type so you can see if you align more with a building or optimizing leadership style. Someone with a personality type that thrives under pressure and in fast-paced environments is likely to identify with the builder mentality. On the other hand, someone who favors process and approaches their work in a detail-oriented manner is likely suited to be an optimizer.
A person’s personality type doesn’t always translate directly to the type of leader they should be. I find that many leaders can adapt to the needs of their companies, but it’s still helpful to understand where your strengths lie so you’re aware of your own areas for growth.
DISTINGUISH BETWEEN HIGH-GROWTH AND MATURE COMPANIES
Every business is chasing growth—the difference often boils down to how aggressive that growth is. A business scaling at 50% growth is an entirely different business model than one growing at 3%. Distinguishing between high growth and mature growth sets the tone for what type of leader is needed. High-growth companies require a builder—someone who isn’t afraid to own the success (and failure) of business decisions and is flexible enough to adapt as they go. Mature growth companies need an optimizer—someone who has a meticulous eye for improved output and ongoing innovation.
Early in my career, I was in a leadership role at a mature company. We were operating on three points of operating margin, which meant we had to optimize and run a tight ship. Every business decision was executed meticulously to improve output and protect margins, while continuing to grow the company.
DETERMINE YOUR RISK TOLERANCE
In the above example, there was limited appetite for risk-taking, and rightfully so. On the flipside, it’s high-growth companies that are more likely to take risks and try new things to fuel growth. This is where leaders who have a high risk tolerance can shine. When building a playbook for a company, you are more likely to introduce big ideas and invest in them. Not every idea will pan out, but if you’re learning from each experience, you can continue to build a winning playbook.
I’ve found myself on the builder side of leadership more often throughout my career. I think it’s because I’m comfortable with the risk that comes with it and even more comfortable with the reward that comes when you do it right. I also witnessed what happens when you stop taking risks as you build out your playbook. At a previous company, there was an unspoken rule—commoditize yourself or someone else will. The company lived by this rule for many years until it reached a certain level of growth, innovation slowed, and newcomers began to outpace them.
The type of leader your company needs is likely to evolve over time. By spending time looking introspectively to understand your personality type and risk tolerance, you can come prepared to lead both types of companies. Likewise, understanding the needs of your company will help you take on the leadership style necessary to drive innovation and fuel growth appropriately.
President and COO of Avalara, a cloud-based compliance solutions provider that helps businesses of all sizes get tax-compliance right.