When a startup is small, leadership is obvious. The founders lead, and everyone else executes. But as the company grows, this simple structure breaks. You cannot be in every meeting. You cannot make every decision. You eventually need a layer of management below you to carry the weight.
This brings us to the concept of the Leadership Pipeline. It is a model for identifying, developing, and managing leadership talent. It is not just a list of names of who might get promoted next. It is a systematic approach to understanding the different requirements at different levels of the organization.
Most startups fail at this. They promote their best engineer to be the engineering manager and are surprised when the team falls apart. They assume that being good at “the work” makes you good at leading the work. The Leadership Pipeline model argues that every transition requires a fundamental change in skills, time management, and work values.
The Critical Turns
#The pipeline is best visualized as a series of turns or bends. Each turn represents a major change in job requirements. In a growing business, there are typically three main transitions you must manage.
1. From Managing Self to Managing Others: This is the first hurdle. The high performing individual contributor must stop valuing their own technical output and start valuing the output of the team. They have to shift from doing to coaching.
2. From Managing Others to Managing Managers: This is where many startups stumble. This leader can no longer just fix the team’s problems. They have to train the managers to fix the problems. They are now dealing with resource allocation and strategy rather than daily tactics.
3. From Functional Manager to Business Manager: This is the shift to the executive level. The leader must stop fighting for their specific department (like Sales or Engineering) and start making decisions based on the profitability and health of the entire enterprise.
The Build vs. Buy Dilemma
#Founders often face a choice. Should you build your pipeline internally or buy it externally?
Buying talent (hiring senior executives from outside) is fast. It brings in outside experience and playbooks. However, it is risky. External hires often struggle with culture fit. The “organ rejection” rate is high.
Building talent (the pipeline approach) is slow. It requires you to invest time and money in training junior employees today for roles they might hold two years from now. However, it is stable. These leaders know your product and your culture in their bones. A healthy organization does both, but relies heavily on the internal pipeline for stability.
Avoiding the Peter Principle
#Without a defined pipeline, companies fall victim to the Peter Principle. This states that people are promoted to the level of their incompetence.
You see this when a great salesperson becomes a terrible VP of Sales. They were never trained on the “turn” in the pipeline. They are still trying to be a super salesperson instead of a manager.
To avoid this, you must test potential leaders before promoting them. Give them small projects. Let them mentor an intern. See if they derive satisfaction from the success of others. If they do not, they should stay as individual contributors.
The Founder’s Succession
#Ultimately, the Leadership Pipeline is about succession. If you are the only person who can make a major decision, your company is fragile. If you get hit by a bus, the company dies.
By building a pipeline, you are building redundancy. You are ensuring that there is always someone ready to step up and take the wheel. It allows you to eventually step back from the daily grind and focus on the next big vision, knowing the engine will keep running without you.