In Stage 3, the ideal Builder-Protector Ratio is 1:1, which means there are equal levels of confidence and caution within the organization.
This graphic shows that in Stage 3 the bar for Protectors is taller than in any other Stage; in other words, Stage 3 is where the highest level of caution is required. This high level of caution helps stabilize the organization as it goes through the important transformation of being owner centric to becoming enterprise centric. Reviewing the graph also highlights the fact that the change between Stage 2 and 3 is the most significant change that occurs in the Builder-Protector Ratio dimension (one of the reasons why leaders find this transition to be especially difficult).
The shift from being owner centric to enterprise centric is uniquely challenging. To manage the stress, the pace of change must be deliberately slowed. A reduced pace will create the stability needed to successfully survive the transition. In Stages 1 and 2, the organization was small enough for the leader to oversee all or most of the people and activity occurring in the business. By Stage 3, the leader must rely on others to oversee the work being done (which is why Stage 3 is the Delegation Stage).
Another reason for the high level of caution is that when growth happens too quickly, organizational complexity gets ahead of what its infrastructure and people can handle. After two Stages of significant change, it’s important for the organization to slow down and catch its breath. Otherwise, the complexity results in chaos, which can cause a wave of people to leave the organization or lose confidence in the leader.
The change in the ideal Builder-Protector Ratio between Stage 2 and 3 can be jolting, however. The fast pace and constant change of Stage 1 and 2 are exhilarating (especially to those who dislike routine), which is why it’s not unusual for organizations to keep the foot on the gas pedal.
As in other Stages, too much of the brake pedal is equally damaging. If there is an overabundance of caution, growing companies can stall, with momentum difficult to regain. The growth in the number of new employees contributes to the higher level of caution. New employees tend to be more cautious, in part because they only know how things are currently done. These newer employees have not survived the trial and constant change of Stages 1 and 2, so they cling to the current ways and don’t readily embrace change. To keep this growing number of Protectors from bringing growth to a halt, the organization’s leaders need to inspire confidence by implementing additional structure and communicating frequently with the team. When everyone is clear where the organization is headed, it is easier to motivate Builders.
Leaders will have to help everyone understand the need to firm up the organization and prepare it for additional growth. They should use this time to practice delegation skills, develop an initial team of managers and supervisors, and give them room to take on growing responsibility. Improving structure for the organization will help keep up confidence levels while minimizing unnecessary change.
To recover from prior Stages of significant change, develop the skills and team needed to delegate, and transition to an enterprise-centric organization, a Stage 3 organization must be aligned with a 1:1 Builder-Protector Ratio and exhibit a balance of confidence and caution.
Builder-Protector Ratio Misalignment
An adventure tour company with 24 employees has operated near a national park in Montana for several years. They have found success in offering guided hiking and backpacking experiences in the summer and snowmobiling in the winter. As the interest in their current offerings has grown, the owner and CEO is eager to keep expanding. He makes plans to add horseback riding and a zip line to their summer lineup, and also starts to pursue expanding into neighboring states.
As the number of team members grows, the quality of their core offerings begins to decline. Customers are voicing complaints and staff members are finding that they don’t have the basic equipment and materials they need to successfully do their jobs. The increasing sense of chaos and disorder come to a head when the company misses the deadline to apply for the annual parks permit pass. Technically, the responsibility for this task falls on one of the new employees, but the CEO recognizes that he has lost touch with the company’s core offerings and functions. Now they may have to close.
This ambitious CEO has good ideas and isn’t afraid to pursue them. However, by keeping the emphasis on Building rather than Protecting at this critical point in the company’s growth, the organization starts to move beyond his ability to contain and monitor every aspect of operations. Rather than focusing on new offerings, he should focus on developing managers who can take over the day-to-day tasks and longer-term initiatives that will keep the company healthy and stable with the influx of new employees.
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.