Complexity Drives Need for Experienced Managers
In a Stage 4 company, comprised of 35 – 57 employees, the changes that occur are exponentially more impactful than anything the company has experienced to date. So, when we look at Stage 4, addressing the change becomes the top priority and the focus must be on getting processes and infrastructure in place to manage this Stage of Growth.
The key objectives of Stage 4 include:
Hiring or training up a professional management team
Establishing a shared project management process
Creating strong, performance-driven departments that compete between each other
Keeping a pulse on the company’s health by establishing a KPI Flash Sheet
Focus first on Process, then Profit, and finally People
Don’t Just Throw People At The Problem
In many companies, as the leader reaches this Stage, activity levels within the company increase ten-fold and the leader starts throwing people at the activity. The irony is that when they do this, they create a more complex organization that is more difficult to manage. As a result of throwing people at the problem, they end up in Stage 5 too quickly and find they haven’t set the necessary systems in place to create a sustainable infrastructure to handle these new levels of complexity.
One of the primary ways to address this problem is to hire experienced or professional managers. A leader may want to start with their sales area or their operational area first. By bringing on managers who know what their job is – individual who have been there, seen it and done it – a Stage 4 company stands a better chance of getting the necessary systems in place needed to manage this Stage of Growth. If you decide to promote managers from within your organization rather than via outside hires, it will be critical to provide them structure education and training to help them be effective managers. (In Stage 4 and need Effective Managers? Learn about ReWild Group’s Exceptional Manager Program)
One of the goals in Stage 4 is to strengthen internal departments – work on making them individual fiefdoms in which there is friendly competition among the different departments. By strengthening the internal structure and operational efficiency of individual departments, the entire company becomes stronger. Having strong managers of these departments to define and implement the necessary small department structures will be key to successfully navigating through this Stage.
Some of the Non-Negotiable Rules of Stage 4 are:
Make sure Business Development has an effective marketing campaign management system, a repeatable sales process, and a systematic customer care program.
Set in place an advanced daily, weekly, and monthly KPI Flash Sheet.
Allocate 5-10% of gross revenue to identification, acquisition, and implementation of new systems and processes.
Hire or train professional-level managers in every department who are responsible, accountable, proactive, and committed, and who set in place solid department infrastructure and processes.
Create strong, performance-driven departments that compete with each other.
The biggest risk for a leader in Stage 4 is to think they are saving money by not hiring great talent and not getting the necessary systems in place. The CEO at this Professional Stage must put their ego aside, invest the time and money, and either hire or train strong professional managers. Having a strong management team in place will help the company through this Stage of complexity, as well as set the company up for future success. Failing to invest and grow this critical layer of the organization will cause the company to stall or potentially implode.
In Stage 4, the business needs the leader to empower the team, value employees as people, and continually find ways to improve.
Stage 4 sees the leader spending 70% of their time as a Manager, 20% as a Specialist and only 10% as a Visionary.
Coaching is the Stage 4 leader’s primary style of leadership, which is blended with Affiliative and Pacesetting.
As the complexity of an organization increases, it becomes even more important that the leader fully understands the health of their company. Financial statements only supply periodic information and really doesn’t go into much detail about the company’s operations. At this Stage, having a KPI Flash Sheet in place is vital. This tool is used to collect key indicators that tell the daily, weekly and monthly story of what is happening in the company. If KPI’s are not being utilized at this Stage, the leader and their team are flying blind, forcing the leader to go back to a trial and error mindset, centralize authority and not utilize the competency of the experienced management staff.
Some Classic Challenges that are a signature of this Stage are weak project management, difficulty diagnosing problems, employee turnover, not getting systems in place, and seeing the organization uninformed about company growth. A well-intentioned leader is not as effective as a well-informed leader and understanding that they must begin to hire people that know more about certain aspects of the business than they do is the most successful step a leader in this Stage can take to assure the company’s future success.