The blind spot of the growth entrepreneur

As an avid reader of De Tijd, I draw daily inspiration from the sharp analyses of our entrepreneurial landscape. The column De Waarde van Morgen (WAW) presents us with beautiful startups every week. Young, energetic teams, often built around one or two visionary founders.

In that phase everything is clear. The founders are the company. Their passion is the product. Their values are the culture. But then growth arrives.

The article about the Rising Star Monitor from Vlerick and Deloitte exposes a painful truth. Belgian scale-ups score brilliantly on product (70 percent), but weakly on organization (35 to 50 percent).

This is no coincidence. It is a symptom of a fundamental problem. The transition from founder DNA to organizational DNA.

Many entrepreneurs see organization as bureaucracy that distracts from the product.

They think: I have a good product, it will sell itself. But that is an illusion. Your product is built, sold and supported by people.

DNA is people. If you are not aware of that, you cannot manage it. And if you do not manage it, you leave a huge part of your growth potential unused.

The Fundamental Difference. Startup versus Scale-up DNA

Let us zoom in on that difference. That is where the key lies.

The Startup Phase. The WAW phase

In a startup, the DNA is implicit. The team is small. Everyone sits in the same room. The founder makes all the important decisions. New people learn by osmosis. They look at the founder and copy what they see.

In this phase, the product is the DNA. The identity of the founder and the product are one. The values and structure at the moment of founding are burned into the organization (Stinchcombe, 1965). The founder is the blueprint. What they do, how they make decisions, which customers they accept, how they deal with problems, that is the culture.

This works because in a small group everything is tangible. The psychological contract between founder and employees is relational and emotional. We are doing this together. We are pioneers (Rousseau, 1989). Everyone feels the same energy, the same ambition, the same values.

The Scale-up Phase. The Rising Star Problem

Here the dynamics change fundamentally. Management layers are added. The founder no longer sees everyone. New people join for a job, not necessarily for a mission. Osmosis no longer works. You cannot personally mentor everyone.

And this is where the real crisis emerges. Not a technical crisis, the product is still good, but an organizational crisis. This is what Greiner (1972) describes as the autonomy crisis. The founder can no longer control everything, but does not dare to let go because they fear that quality will dilute. They remain stuck in product focus and direct control.

The problem is that the skills required to start the company—product passion, detail control, intuitive decision-making—are at odds with what is needed to scale—delegating, building processes, institutionalizing values. Wasserman (2003 and 2012) calls this the Founder’s Dilemma. The founder must choose between:

  • King (retain control)
  • Rich (truly grow)

Many Belgian entrepreneurs unconsciously choose King, which limits their growth.

The Vlerick research confirms this problem exactly. Founders remain stuck in the directive phase, product focus, and fail to make the step towards delegation and organizational design.

DNA Is not soft stuff. It Is hard business

Many growth companies find terms such as DNA or culture vague. They prefer to focus on features, sales targets and cash flow.

But let us turn that around:

Who builds those features? People who do or do not understand what the customer really needs. That is DNA.

Who hits those sales targets? People who do or do not strike the right tone with prospects. That is DNA.

Who guards cash flow? People who do or do not dare to intervene when things go wrong. That is DNA.

Your product or service, the way you position it in the market, how you deal with customers, it is all directly connected to who you are as an organization. This is not a mystical idea. It is simply organizational reality.

What you do not see is often because you do not measure it. But it is there. Your human capital, the unique way your people work together, how they think, which values they share—that is your real competitive advantage (Barney, 1991).

Your product is easy to copy. Your culture is not.

If the founder drops out, or simply is not in the room, what happens then?

  • In a company without articulated DNA: people guess or do nothing. Quality drops.
  • In a company with articulated DNA: people know how we do things here. Quality remains high.

The Vlerick research suggests that Belgian companies underestimate this. They optimize the product, but neglect the engine that creates the product: the people and their shared values.

Unconscious Incompetence. Why your growth stagnates

If you are not aware of your DNA, you are flying on automatic pilot. At the beginning, that works because the founder is on top of everything.

But as you grow, it stops working.

Without awareness of your DNA, you hire people based on skills (can they code?), and not on values (do they understand our customer obsession?). You get mercenaries instead of allies.

This leads to fragmentation. The company splits into teams that do different things in different ways. Your product becomes inconsistent. Your customer experience diverges.

Everyone feels that something is off. Innovation stagnates. People leave because they no longer know why we are doing this (Gibson and Birkinshaw, 2004).

This is exactly what we see at Companyonwise. Entrepreneurs come in with growth pains. Processes jam. The team does not run smoothly. They think they need better software. But almost always the root cause is deeper. They have not succeeded in translating implicit founder DNA into explicit organizational DNA that new people can adopt.

Practical Case. Awareness as a lever

For many service companies, growth is a trap. More people often means more noise. Jo Roseleth of Moore understood that growth is only sustainable if the core remains identical, even when he is not in the room.

By consciously working on DNA, something fundamental changed. It was no longer Jo’s vision. It became a shared compass.

This is crucial in the scale-up phase. You must move from leader-led to culture-led. The founder pulls the cart versus the DNA pulls the cart.

This institutionalization is exactly what Schein (1985 and 2010) describes as necessary for a culture to survive beyond the founder. Values must be anchored in systems:

  • how you hire people
  • how you reward them
  • which behavior you tolerate
  • where you invest your money

In the IT world, technology changes every two years. If you hang your identity on your product—we do Java—you are vulnerable.

InfoSupport understood that their real strength lies in their people. By making their DNA explicit, they created an anchor point for new employees. Technology changes. Their approach does not.

This makes them agile in a way that competitors without strong DNA cannot match. Their internal identity (who we are) becomes the stable point from which they adjust their external image (what we do) (Hatch and Schultz, 2002).

Filling in the blind spot

The Vlerick research shows that governance is often a weak point. That is logical. If your DNA is not explicit, how can you create rules that make sense? You end up with bureaucracy. Rules for the sake of rules.

But if you realize that DNA is people, governance becomes something else. It becomes agreements that stimulate our best behavior.

Many entrepreneurs think that governance equals limitation. That it restricts innovation. The opposite is true.

If everyone understands:

  • how we treat customers
  • how we handle mistakes
  • what our principles are

then you do not have less freedom. You have more freedom (Schwartz and Davis, 1981).

Your people know where the boundaries are. They do not have to guess every day what is acceptable. They decide faster. They take risks because they know it fits within your values. This is probably the way to scale without losing your soul.

Wake Up and manage your people

The point is not that your product is unimportant. The point is that in the scale-up phase, your product is an outcome.

An outcome of:

  • the people you hire
  • the values you reward
  • the behavior you tolerate

Belgian growth companies leave growth on the table because they manage the output (the product) instead of the input (the DNA and the people).

If you become aware of this, your entire view on growth changes.

You hire differently (on DNA fit, not only skills).

You manage differently (on values, not only targets).

You grow differently (from strength, not from chaos).

At Companyonwise we help entrepreneurs make that crucial shift. From unconsciously competent to consciously competent. From the intuitive founder to the scalable organization. So that you no longer navigate in the dark, but with a razor-sharp compass carried by everyone.

Because in the end, business is simple. DNA is people. And people make the difference.

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