In Stage 2, the ideal Builder-Protector Ratio is 3:1, which means there is three times the amount of confidence as there is caution in the organization. The other way to understand the 3:1 Builder-Protector Ratio is that 75% of the team are Builders, while 25% are Protectors.
An organization with a 3:1 Builder-Protector Ratio exhibits a very high level of confidence.
This graphic shows that in Stage 2 the bar for Builders is not quite as tall as Stage 1 but is the same as Stage 6, which indicates that Stage 2 is tied for the second highest level of confidence across the seven Stages. Stage 2 organizations require this high level of confidence to keep them advancing through the Ramp-Up phase.
The 3:1 ratio for Stage 2 reflects a slight decrease from Stage 1’s level of confidence because a lower level of confidence is necessary to support a slowing pace of change in the organization. Keeping up the same pace of change in Stage 2, where the number of people is doubled from Stage 1, can result in organizational trauma.
The organization must maintain a high level of confidence in its leader and remain ready to quickly move to take advantage of market opportunities. However, the speed and frequency of change must now be measured against the gain and the cost of change on the organization. Opportunities must fit more closely with the strategic direction designed in the business model. Greater organizational structure replaces high levels of fluidity in people’s roles and responsibilities.
A source of confidence in Stage 2 comes from having proven there is a market for the company’s products and services. By focusing on Profit, this success is reinforced as the business generates sufficient working capital to fund additional resources.
Stage 2 is a common plateau for many small businesses. The level of complexity is noticeably higher than Stage 1, and with it comes new challenges and rules of growth.
The organization’s belief in the future must remain positive to navigate Stage 2 and the disappointments that will surely be experienced. One way to keep morale high is by dividing the organization into small action teams, which can achieve goals and overcome challenges, keeping everyone involved and accountable.
If the organization becomes too cautious in Stage 2, growth can stall. This loss of momentum can cause high performers to consider new opportunities and cautious employees to wonder about job security. If these dynamics begin to happen, the business may quickly find itself back to Stage 1—only this time, with confidence shattered.
Some business owners consider what it will take to reach Stage 3, which begins at 20 employees, and lack the confidence needed to advance the company forward into the higher level of complexity. If this happens, the company may find itself stuck in Stage 2 for a long period.
Even a confident Stage 2 leader needs help from the team. As with any Stage, if too many people in the organization have their foot on the brake pedal, the organization will stall. The leader must be surrounded by Builders who are confident in him or her and who look optimistically at opportunity and change.
To overcome any natural Protector tendencies of the team, the leader will need to 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. The leader will also need to keep an eye out for Builders who want to push too much change onto the organization, and temper that tendency with additional structure.
To regain and sustain the necessary forward momentum to grow out of Stage 2, an organization must be aligned with a 3:1 Builder-Protector Ratio and exhibit a high level of confidence.
Builder-Protector Ratio Misalignment
A dental office has grown to a place where they have a good amount of business but will need to implement some changes—not only in order to maintain their current size, but especially if they want to grow. New technologies have been adopted by other local dentist offices, making it harder for them to compete in the marketplace. The co-owners are both dentists who have run their business for over 20 years and are naturally more cautious than confident. One of their primary objections to making any major changes is that they don’t want to disappoint their very loyal customer base.
Some of the other staff members, however, are worried that the company will suffer if new technologies aren’t embraced. One dental hygienist already left to join an office that has implemented new techniques. While the team enjoys the office environment and the high level of service provided to patients, employees are beginning to get concerned about the future. The person who schedules appointments has noticed a handful of regular patients who have cancelled routine checkups and other procedures and are now going to other dental offices with quicker turn-around times and less invasive procedures allowed by advanced equipment.
The owners of this Stage 2 dental practice are in danger of hurting the business and losing employees by being overly cautious. While they don’t want to disappoint their customers and would like to keep their employees, they must be willing to take on some amount of risk in order to adapt to the changes that the market demands. A clear vision from the owners would go a long way towards increasing confidence and galvanizing enthusiasm from the staff to embrace focused but necessary change to how things have always been done.
The concepts from this article were taken from The Ramp-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 11-19 employees.