In Stage 1, the ideal Builder-Protector Ratio is 4:1, which means there is four times the amount of confidence as there is caution in the organization. The other way to understand the 4:1 Builder-Protector Ratio is that 80% of the team are Builders, while 20% are Protectors.
An organization with a 4:1 Builder-Protector Ratio exhibits a very high level of confidence.
This graphic shows that in Stage 1, the bar for Builders is taller than any other Stage. This demonstrates that Stage 1 is where the highest level of confidence is required. Stage 1 organizations need mostly Builders to keep advancing through the Start-Up phase.
A Stage 1 company is often still trying to define itself—determining what business it is in and how it will deliver goods and services to customers. It’s a time of chaos and change that demands a high level of confidence.
Builders love this environment. They embrace change and are constantly looking for ways to make things better. They accept ambiguity in their work and can live with processes that are not fully developed. Builders are not rigid in what work they are willing to perform; instead, they can quickly switch gears to assist where help is needed.
A highly confident organization also believes in its future success. This is critical in the Start-Up Stage when uncertainty abounds. Stage 1 organizations must believe in their leaders to guard against low morale that come with the setbacks that inevitably occur.
Many small businesses get stuck in Stage 1 because the organization is too cautious and has too many Protectors. In some cases, it is the business leader who is the Protector that is holding the company back. This may be caused by natural tendencies or past setbacks. Whatever the case, such companies rarely advance to Stage 2.
In other cases, the leader is surrounded by staff who as a group are too cautious. To overcome natural Protector tendencies of the team, the leader will need to frequently paint a clear vision for where the organization is going and encourage the team to trust the leader to take the organization to that destination.
To regain and sustain the necessary forward momentum to grow out of Stage 1, an organization must be aligned with a 4:1 Builder-Protector Ratio and exhibit a very high level of confidence.
Builder-Protector Ratio Misalignment
The CEO of a small accounting firm has built the business up to seven full-time employees, including herself. Her goal is to successfully exit the business in five years, and she estimates she will need 12 employees to achieve her desired financial threshold at exit.
Naturally cautious, she has slowly and steadily built her team to this point. She is very involved in the day-to-day operations and closely monitors all of the work that her team produces. To transition out of the business and successfully bring on more people, she recognizes that she will need to focus on building scalable systems and structure because she can’t personally monitor that volume of work. She will also need to focus on advertising and marketing to bring in more business and consider adding to the company’s revenue streams by expanding their services and bringing on financial planners.
This business leader’s natural caution, typical for accountants, matches the style of her employees. As an organization with a psyche of caution, change presents a threat to its routine existence. In order to grow, not only will the CEO need to stretch herself, but she will also need to motivate her team by presenting a clear and compelling picture of the direction they are heading.
The concepts from this article were taken from The Start-Up 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 1-10 employees.