Some of the most exciting drinks businesses begin with vibrant, passionate founders. These people notice emerging trends, they build communities around their product and they are good at creating energy around a brand. They are highly visible, highly connected and tend to embody their brand.
In this case, this was exactly the type of founder. An exciting product in an emerging drinks category that in a short few years had generated significant attention around both the product and the associated lifestyle. From the outside, it looked like a business that should take off like a rocket but behind the scenes the problem was that employees kept on leaving after a short amount of time. Different roles and different reasons for leaving but apart from a few loyal long-term employees most people stayed 1-2 years. The business approached us after their usual direct hiring channels were not working.
The role itself was not especially unusual; mainly a sales role but like so many growing drinks businesses it had also some logistics responsibilities. Everyone was expected to wear multiple hats and that was not a problem, in fact people attracted to small companies at this growth stage tend to enjoy those types of roles. The actual issue was that the business remained heavily centred around the founder and there were no systems or processes that didn’t involve the founder. They still made all the decisions, ran the key accounts and were a key part of the marketing. The energy had remained as start-up energy: constant communication, changing roles, changing expectations. The start-up skills of quick adaptation were still overlayed on a larger team and employees would suddenly find themselves in a different role because the business required it, even if they didn’t have the skills or desire to do that role. This type of flexibility and energy is so normal – and essential – for a start-up and it is what moves the needle from an idea to a product that sells across multiple channels. The issue here was that this business needed to move into a phase of internal predictability.
We regularly see this pattern within founder-led drinks businesses. Its a very specific type of person who can go from “this would be a great product” to “here’s the product and a major supermarket wants to stock it”. Early success qualities do not map to qualities needed to build a stable business that can scale and that delivers a pleasant challenging role for it’s employees. There is a point at which systems and processes are needed and at which too much energy and flexibility start causing instability.
In the drinks industry so many businesses are built around passion and personality and people join the category and want to be part of these companies because of the excitement, the energy, the creation of the sub-category. But joining and staying are driven by different things. Employees need: performance measurement, rewards, progression, clear responsibilities (even within a fast-moving environment), time to switch off.
What became clear very quickly: attracting people was not the issue. Rather it was understanding why good people were not staying and about making changes internally to address that. I think there is stage at which every founder-led business needs to consider how they continue without everything circling around the founder.
This tends to happen later than it should and high turnover of employees can be one of the symptoms. It is so difficult for a leader who has been everything for a business and who has sustained the business to start receding gently and to allow others with completely different skill sets to come to the foreground.
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