The Adolescent Company: How to Keep it On Mission and On Track
Photo by Kalos Skincare on Unsplash
Ask yourself one simple question (alright, not so simple): do I want to be king or queen or rich?
Dear Entrepreneur,
It seems like only yesterday that your company was but an idea that sounded cool, and then (how did I ever actually do that?) a reality. You worked your hiney off and, with the help of some friends and family, not only did you get your dream off the ground but also found a way to make a living doing what you love to do: run a purposeful company.
But lately it’s a bit less fun, a bit less exhilarating than it used to be. It was exciting to grow from 2 to 6 to 20 and now 30 employees, but not everybody shares your energy and passion, and you find yourself increasingly frustrated that your growth seems to have hit a plateau long before it should. “I feel like the company can’t keep up. Why can’t they just get it? Why do they need me to make all the decisions,” you find yourself wondering over and over again.
Or . . . maybe you’ve just raised capital — not from your loyal friends, family and fans, but serious money from serious capital folks who are now asking for things you may not think are even worth it. Entrepreneurs set big goals for their organizations and get everybody barreling forward. But now your new stakeholders, who are far less risk tolerant than you, are demanding monthly reports and quarterly board meetings that take you and your team off chasing those big goals. and their expectations border on crazy! Your world is turning upside down!
Does this sound familiar? If not, someday it will, and when it does, you’ll likely look to take your company to the next stage by securing venture capital or private equity funding. But before you do, you have to make one crucial decision that will determine the company’s and your future: do I want to be king or do I want to be rich?
From Go-Go to Adolescence
If you’re at all familiar with the theory of corporate lifecycles and the work of Ishak Calderon Adizes, you’ll recognize the above scenario as the perfectly natural desire to take your company from what Adizes calls “Go Go” to “Adolescence.” Adizes proposes that companies, like people, move through a series of developmental stages, beginning as a gleam in the entrepreneur’s eye, moving through infancy to teenage angst and on to adulthood or “Prime.”
As with individuals, each stage of the corporate life cycle involves changes that present unique challenges to the organization. The challenges arise naturally in the developmental process. The challenges are hard but natural parts in the growth of any company. Meeting them head on is critical to healthy advancement to the next stage.
If you’re the founder of a fast-growing entrepreneurial organization, you’re smack in the middle of Go-Go. You’ve borrowed money from family and friends and, maybe, the bank. You’ve hand-picked most or all of your team, who feel personally bound to your vision and will do anything for you. Some have been rewarded for their loyalty and hard work with raises, vice presidencies, maybe even equity. Your customers love you. You’re at $3 million or $12 million or, maybe, even $30 million a year and that suits you just fine.
As Noam Wasserman famously phrased it in his hugely influential The Founder’s Dilemma, you are “the king.”
Or . . . you realize that you’ve barely tapped into your potential market and have little other than upside should you choose to pursue it. What’s more, the MONEY thinks so, too, and has let you know about it. At this point, you decide that moving to the next stage is the right thing to do. You decide, again in Wasserman’s formulation, to be “rich,” which means welcoming outside capital on your train in order to scale to new heights.
Know this: what got you to where you are today will not take you to the next level. Know this because venture capital and private equity, alike, will know this and will hold your company to entirely new standards — they have different expectations.
Are you up to leading your company from Go-Go to Adolescence? If so, you’re one of lucky 10% who possess such powers of scalable leadership. That’s right, in my estimation, one-in-ten entrepreneurs can flick the switch to successfully light up their inner CEOs and remain king whilst growing rich at the same time! It’s sure tempting to think of yourself as one of the 10, but I’m here to tell you it’s unlikely to be the case.
But, hey, somebody has to run the company, right? So, whether it’s you or, more likely, a new CEO whom your new best friend, private equity, appoints to your company, there are several mindsets and skill sets required to keep your company on mission and on track.
The new leader
First, the new leader should be different. Not “better.” But definitely different. First and foremost, they should be able to maintain the core intention of the company — its mission and purpose — and build a culture that is still excited about your original change the world intention. I call this “scaling your passion” and have outlined a recipe for doing this. But there are several other key attributes I want to outline for you here.
They are:
1. Ability to recruit, hire and lead talented new executives: Entrepreneurial environments tend to operate in an all-hands-on-deck fashion, leaving little or no time for real long-term, strategic planning. As companies grow in every imaginable way, they exceed the founder’s and the founder’s small leadership team’s capacity to manage it. The time has come to fashion a professional leadership team comprising not loyal friends but people who are experts at building and leading critical pieces of organizations such as marketing, sales, operations and human resources!
I believe in the “leadership continuum,” which implies that all of us have more or less ability or inclination to be a leader and that the further out in time you are comfortable thinking and performing, the greater capacity you have for strategy or vision. Not everybody can be a visionary; companies need people whose “sweet spots” fall all along the spectrum, from tactical, to managerial, directorial, strategic and visionary. So, I’ve outlined key considerations for how you might evaluate your current and future talent needs along the leadership continuum.
2. Strategic thinking & mindset: Once you have the team “on the bus” as James Collins said in Good to Great, now build a strategy. Again, let’s make sure it keeps our original purpose in mind. Great, purpose-driven brands drive more value in the long-term as we all know.
I have found that Lencioni’s book The Advantage offers a simple way to align all stakeholders. He distills strategic alignment down to six fundamental questions, which are:
Why do we exist?
How do we behave?
What do we do?
How will we succeed?
What is important, right now?
Who must do what?
If you can answer these questions honestly and thoroughly, you’ll know who you are, how you differ from others in your marketplace, your priorities now and in the future and what you must do to get there. That is truly the basics of strategy.
3. Ability to bring the company with them: Once the strategic leadership team is in place and the company has a strategy and mission clearly articulated, a new CEO can work to bring the whole company along with her. To accomplish this, you need to communicate and, yes, to have lots of meetings. One of the most helpful books I’ve read on meetings is called Death by Meeting, written by Patrick Lencioni, founder of The Table Group. Contrary to its title, the book actually calls for giving meetings a more prominent place in your leadership toolkit. Not routine, boring and unproductive meetings, but interactive and energetic ones.
One of Lencioni’s principles, called “The Four Meetings,” touches on something near and dear to my own experience: I call it “organizational rhythm.” Basically, organizational rhythm involves
disciplining yourself and your team to be more purposeful about meetings,
getting the right decision makers to the right meetings at the right times and
using a calendar plan to run the business while planning for the future.
Check out this article on how a well-thought-out calendar plan for executive team meetings can help you deliver on strategy and run your business — at the same time.
And now, a word on patience. A new CEO needs to have patience with the founder and old leadership team. If you are the founder, this period will likely be very tough for you. You won’t instinctively trust the new CEO, who must earn your trust early and often, while gradually setting new benchmarks to facilitate change. And sometimes, much to most entrepreneurs’ frustration, things have to slow down before they can get back up to speed.
Let me give you an example. I became CEO of a wildly successful natural products company whose founder knew the industry inside and out, who was a visionary about the company’s brand and who was a veritable innovation savant. When I arrived, he had been introducing new products every two or three months. But for all his drive and creativity, the company wasn’t going to grow because his organization couldn’t keep up with him.
Think about it for a minute: as you grow your targets and ambitions, your team is also getting bigger, your customers are getting bigger and may hold their category reviews at certain times of year. You need to time production and new product releases to these reviews. Sometimes, you get one shot at breaking into a major new market. What I did was explain to the founder that we needed to slow things down a bit and turn his gotta-get-it-done-now vision into a three-year plan that would enable the rest of his growing organization to hit their marks.
We ended up tripling the company’s net revenues in three years.
At my next position as CEO, I replicated this achievement, albeit over a longer period of time and this time without the founder, who had retired. By the time I left this organization, we had moved some distance to making ourselves more agile in our approach to anticipating and responding to our industry’s rapid changes. And we were well on the way to creating a full-blown leadership pipeline in order to maximize staff engagement and accountability in the company’s success. We were, so to speak, making the move from adolescence to prime, which, as Adizes would say, is a pretty good place to be.
But that’s another story for another day. Today, your job is to begin to take a hard, honest appraisal of where you are and where you want to take your company to enable you to reach more people and improve more lives.
And so I ask you again: do you want to be king or rich?
Sincerely,
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All credit to my ghostwriting partner, Dave Moore, who is instrumental in getting my thoughts out in a coherent manner & into these blogs. Thanks Dave!