Stage 3’s Gates of Focus priorities are People, Profit, and Process.
In Stage 3, People become the highest priority for the first time. This comes with the transition from an owner-centric organization to an enterprise-centric organization. The number of people in the organization has grown beyond the span of control of the business leader; with almost double the number of employees from Stage 2, the CEO can no longer own every interaction. This is the point in a company’s growth when the relationship between the owner and the company must change. Instead of owning every interaction, the leader must begin regularly delegating responsibility and decision making to managers and supervisors. For this to be effective, the CEO will need to ensure people—both management and the staff—are the priority for this Stage.
The second priority of Profit is important to pay for the increase in employees. This size of organization still relies on profit to fund growth. Since Profit is the first priority in Stages 1 and 2, it’s common for the leader of a Stage 3 company to continue to focus on Profit. The problem with keeping Profit as a primary focus at this stage is that, while the sales engine may continue to be running strong, the delivery on goods or services will inevitably suffer if the staff is not properly set up for success. A large number of people in the company weren’t there from the beginning, and without proper training and management, they won’t be able to deliver on the brand values of the organization.
Finally, Process is third priority in Stage 3. It should not be ignored, but instead placed at lower priority than the other Gates of Focus. Strong processes will serve new employees well and help with maintaining consistent operations. However, forward momentum and growth will not be achieved in Stage 3 through Process as much as through People and Profit.
Business leaders embracing these Gates of Focus should be constantly thinking about how decisions will impact the company’s employees. Their energy should be focused on the development and well-being of their employees.
Gates of Focus Misalignment
The CEO of an architecture firm has found success offering high-end custom homes as well as industrial and commercial building designs. The company started out in the Midwest, and the strategic-minded CEO has expanded to include firms on the east and west coasts, positioning the company for international growth. In his growth mindset, he has already begun the groundwork for opening a fourth branch in Europe.
Operations are not running as smoothly as they used to, however. With 26 employees and three locations, he finds that his time is split between the different offices. The original Midwest branch, always so stable, is starting to experience turnover. Some of the longest-lasting employees have recently left. The two newest offices are functioning but with noticeable issues. The CEO doesn’t want to spend so much time away from the home office, but the new locations can’t seem to function without him. One thing he consistently notices is a competitive air between the three offices. They seem to be competing for resources and projects without regard for the good of the company.
This CEO has failed to make People the primary Gate of Focus. Instead, he is still focused on Profit. While his ability to bring in business and strategically plan for growth served the company well in Stages 1 and 2, the number of employees has grown to the point where he can no longer resolve every issue firsthand. He assumed that as the company grew, things would continue to run they always had. Instead of pushing for more expansion, he should be investing more time in developing the branch managers and equipping them to lead and direct the new staff. A strong culture with unified employees creates a solid base for growth, whereas an ill-defined culture with fractured employees impedes further growth.
The concepts from this article were taken from The Delegation Stage: Organizational ReWilding Rules for Business Growth. Available through The ReWild Group and Amazon, the book explores this and other concepts in-depth while providing illustrations to help business leaders incorporate the ideas into their organizations. Get your copy today to learn the rules for growth for companies with 20-34 employees.