The Three Faces of a Leader – Stage 1
In Stage 1, leaders are ideally spending 40 percent of their time and energy wearing the Visionary Face, 10 percent wearing the Manager Face, and 50 percent wearing the Specialist Face. Stage 1 is almost equal parts providing the vision for the company and executing on that vision.
In Stage 1, leaders are ideally spending 40 percent of their time and energy wearing the Visionary Face, 10 percent wearing the Manager Face, and 50 percent wearing the Specialist Face. Stage 1 is almost equal parts providing the vision for the company and executing on that vision.
Stage 1 leaders need to devote half of their time to being actively involved in the work of the company—creating the products for customers, delivering the services to clients, or applying their personal expertise to the company’s offerings. Often, the leader is contributing significantly to the overall output of the organization. Wearing the Specialist Face can also include time the leader spends in business development, whether it’s sales, marketing, or customer service.
Setting the vision for the company and tying that back to the organization’s activities should occupy 40% of the leader’s time and energy. Without this time spent in critical thinking about where the organization is headed, it is challenging to get buy-in from the team on that vision. The team must be confident in the company’s future so that they can create forward momentum in this early Stage.
With a focus on surviving the Start-Up Stage, it’s common that a Stage 1 leader spends too much time wearing the Specialist Face. They may have started the business because they are naturally talented in wearing the Specialist Face—they are a great electrician or talented designer. Wearing the Specialist Face is where they feel comfortable and accomplished. But a Stage 1 business needs its leader to be more than a Specialist.
The over-emphasis on Specialist typically comes at the expense of wearing the Visionary Face. Being a Visionary is a new responsibility for many business owners. To build an organization takes more than being an excellent doer of the work; it takes a leader who is willing to spend the energy to paint a vision of the future that inspires others to want to help achieve it.
If a leader doesn’t spend enough time in this early stage intentionally setting a vision for where the company is headed, they can’t share it with the staff. Without a clear vision, it is hard for the staff to buy into the company or see how their daily tasks contribute to the end-goal. The leader will struggle to build a strong, dedicated team that can help the organization grow through Stage 1 and beyond.
Three Faces of a Leader Misalignment
A medical doctor has an innovative idea for a device that will improve the administration of certain drugs. He decides to quit practicing medicine and invest his time and energy into developing the product and getting it to the market. He hires a small team of engineers and starts marketing and selling the device. His vision for the product and his company is crystal clear in his mind, and he has no trouble attracting investors.
After several months, however, the device is still far from ready. Several pieces of the project have stalled, and he is constantly frustrated by the inability of his team to execute on his vision. By this time, he has already begun planning for a second device to complement the first and has drummed up interest in the market. He finds replacements for his team in the hopes of speeding up production, but they too seem unable to finish development.
This CEO is very comfortable wearing the Visionary Face. He attracts talent and investors easily because he’s adept at sharing his vision and building excitement. What he fails to do, though, is wear the Specialist Face. He needs to roll up his sleeves and get involved with product development if he wants to see progress in that area, because he is the one with the clearest understanding of what is needed. Otherwise, the gap between the vision and getting things done is too great for even very talented employees to bridge.
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.
Gates of Focus in a Stage 1 Business
A Stage 1 company’s Gates of Focus are Profit first, People second, then Process third. Business leaders embracing these Gates of Focus should be constantly thinking about how decisions will impact the company’s profitability. Their energy should be focused on activities that generate revenue and increase profits.
A Stage 1 company’s Gates of Focus are Profit first, People second, then Process third.
The top priority gate is Profit. The only way out of Stage 1 is to generate enough profit to fund growth. In this Stage, generating, tracking, and preserving cash and implementing a foundational financial system are ways that a leader can successfully focus on Profit.
The second priority for Stage 1 is People. When an organization has 10 or fewer people, every person in the company plays a significant role in the organization. You must have the right people. One of the Non-Negotiable Rules in Stage 1 is to hire for fit, looking for generalists who can wear multiple hats rather than specialists.
Process is the third priority. The company is still trying to figure out what products and services it provides and how to best meet customer needs. Spending significant amounts of time perfecting a process that may need to change the next month (or day) doesn’t make sense at this point.
It’s worth noting here that if a business has been in a Stage for a long time, the leader may find that a high priority Gate no longer requires as much energy. For example, a business that has been in Stage 1 for 10 years may have prioritized Profit long enough that the business is generating sufficient revenue and profit to maintain its current state. As a result, the business may spend more energy on the People and Process gates. However, just because Profit is not taking as much energy does not mean it is no longer the top priority.
Remember that a Stage’s prioritization of the Gates indicates where the greatest opportunity for growth lies. In Stage 1, Profit represents the greatest opportunity, even if it does not require the greatest level of energy at that point in time.
Business leaders embracing these Gates of Focus should be constantly thinking about how decisions will impact the company’s profitability. Their energy should be focused on activities that generate revenue and increase profits.
Gates of Focus Misalignment
The CEO and Founder of an IT support company has spent months building up the systems he needs to be able to serve his clients. He has invested in subscribing to several technology platforms and has hired two other IT technicians who are highly skilled and knowledgeable. He’s confident that he has the right people and the right systems to provide top-quality IT support for just about any organization.
The problem is that he can’t get enough clients. The ones that he has engaged so far are happy with his services, but he needs more leads to keep paying for software subscriptions and employee salaries. After two years of struggling to pay the bills, he is contemplating closing the business and going back to the corporate world, where he at least is assured of a consistent paycheck.
This Stage 1 business owner has made the mistake of making Process his first priority, followed by People, with Profit last. He assumed that by preparing for a high volume of work he was being smart and planning in advance, when in reality he was operating on the unfounded assumption that clients would follow. Instead, he should have focused on Profit by actively marketing and selling his services. Then, as the revenue started to come in, he could add the right People to his team and build Processes as needed.
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.
Builder-Protector Ratio in a Stage 1 Company
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.
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.
Leadership Style Blend in a Stage 1 Business
A Stage 1 leader guides their team with a strong vision, focuses on people’s potential, and takes charge to lead the organization through chaos. This ideal blend results in an organization that has a picture of where it is headed, is comprised of high functioning, engaged team members, and pushes through chaos with decisive decision making.
The ideal leadership blend for Stage 1 is Visionary, Coaching, and Commanding.
A Stage 1 leader guides their team with a strong vision, focuses on people’s potential, and takes charge to lead the organization through chaos. This ideal blend results in an organization that has a picture of where it is headed, is comprised of high functioning, engaged team members, and pushes through chaos with decisive decision making.
Primary Leadership Style: Visionary
The Visionary leader is tasked with guiding the team and the company with a strong vision. This creates a clear picture of the future that energizes the team and improves the confidence of the organization.
The vision set in place by the leader drives the organization forward. In this Start-Up stage, having a visionary leader who ignites the spirit of innovation and instills pride in the organization is key to the organization’s success.
Secondary Leadership Style: Coaching
Leaders who are strong in the Coaching style develop people for the future. They help people identify their strengths and weaknesses, while aligning work with their career goals. This is important in Stage 1, because the organization needs to attract employees with initiative who have an interest in being part of a growing company that will provide future opportunities. This style focuses and builds upon the team’s potential.
Tertiary Leadership Style: Commanding
Commanding leaders exert forceful direction to get results and make decisions. This is an important style to round out the leadership style blend because a Stage 1 organization needs both a clear vision and a commanding leader to help propel the organization towards that vision. Without Commanding as the tertiary style, the company can become stuck from indecisiveness at a time where so many decisions have to be made. A leader employing the Commanding style takes charge to lead the organization through chaos.
Leadership Style Blend Misalignment
A talented Interior Designer decides to start her own company. She’s certain she can provide better service and products than where she previously worked, where her potential was hindered by many layers of bureaucracy. In her new role as company founder and CEO, she brings a tremendous amount of energy and passion. She easily attracts new clients and impresses them with her design capabilities.
Eventually, her client base grows to the point where she needs to hire additional designers. It isn’t long before a pattern is established with the new hires; they start out eager to do the work, but after a few months show very little self-motivation. Most only last a few months before leaving. The CEO continues to search for the right employees but grows increasingly frustrated that she must spend all of her time servicing clients rather than growing the business. She’s not shy about setting clear expectations for her employees, but no one seems capable of rising to the challenge.
This CEO’s natural Leadership Style is Pacesetting. If someone can’t keep up, she switches to a more Commanding style, simply dictating what needs to be done. She’s never able to cast a vision for her team, however, so they tend to get bogged down in the day-to-day work without connecting it to a higher purpose. Her natural tertiary Leadership Style is Affiliative, but she can’t retain employees long enough to develop a harmonious team. Without group momentum, she is left doing the majority of the work alone.
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 in-depth this and other concepts 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.
Chaos is a Common Challenge for Stage 1 Businesses
A Stage 1 business has between 1-10 employees. One of the top five challenges businesses of this size face is destabilization stemming from chaos. As a business owner, you don’t want your employees to be overly stressed or unsure how to go about doing their work. Nor do you want the burden of unclear processes slowing everyone down.
A Stage 1 business has between 1-10 employees. One of the top five challenges businesses of this size face is destabilization stemming from chaos. On the one hand, this is intuitively obvious. A small business that is in start-up mode is struggling to get a toehold in the market, typically lacks capital, and is still trying to define exactly what it does and who it serves. Chaos seems inevitable, right?
While it’s true that anyone who works in a Stage 1 business should be aware of the challenges, and expect chaos to be part of the mix, it’s also true that there are real threats to the health of the company if this challenge is not addressed.
Typical Symptoms
The typical symptoms that can be found in a company that is destabilized by chaos include:
Employees who are stressed out by chaos or disorganization
People who don’t know how to get work done
Processes that are unclear or non-existent
As a business owner, you don’t want your employees to be overly stressed or unsure how to go about doing their work. Nor do you want the burden of unclear processes slowing everyone down.
Key Elements to Address the Challenge
The Organizational ReWilding framework is composed of 11 Elements. Each one is integral to the health and full-functioning of a business. When a business experiences the challenge of chaos, there are three elements that should be implemented in order to address it.
A Business Growth Framework will provide the team a way to move in a common direction, even if it is a bit chaotic getting there.
Critically thinking about the company’s Business Model will create clarity around what the company does, for whom, and why. Having this underlying structure will increase the stability of the organization, even amidst operational chaos.
Establishing Organizational Structure will help organize the work that is being done, independently of people, which serves to reduce the chaos of workflow (even as the team grows and changes).
Why this Challenge Must be Resolved
Businesses that fail to address the challenge of destabilization from chaos will struggle to retain employees and will lose valuable time and money to inefficiencies. These factors can easily take an otherwise promising company out of the running, relegating it to the category of start-ups that fail.
To get help with implementing the three Elements recommended in this article, contact The ReWild Group or check out our Element Guidebook Series.
Stage 1: Starting Up a Company? Embrace the Chaos.
Understanding the stages of business growth, and how companies progress through these stages, is essential for any entrepreneur hoping to thrive in the chaotic beginnings of starting a company.
Starting Up a Company? Embrace the Chaos.
Starting a business has never been easy; the beginning stages of a new venture can feel like a whirlwind of chaos and uncertainty. An entrepreneur needs to have courage and confidence to navigate these stormy waters. Understanding the stages of business growth, and how companies progress through these stages, is essential for any entrepreneur hoping to thrive in the chaotic beginnings of starting a company.
As a Stage 1 - or Start Up – passion and guts are the fuel. To envision a company where none existed before and to transform that vision into a living reality is not a simple task. The key objectives at the Start Up stage include:
Creating a cohesive, cooperative team
Embrace the chaotic environment
Generate and preserve as much cash (revenue) as possible
Focus first on Profit, then your People, and lastly Process
Innovate Quickly – Discover, Explore, Experiment
A Stage 1 company should be structured to innovate quickly; it is not designed to be locked into any one specific focus at the beginning. A Start Up company is meant to quickly discover, explore, experiment and find the right product or service that the company intends to bring out into the world.
Stage 1 is comprised of businesses with 1 – 10 employees. At this Stage, you do not have a lot of people to lead. It is more about making quick business decisions and embracing the inherent chaos.
Stage 1 is about survival; it is about getting a product or service out to the correct target market. As a Stage 1 company, you are better off if you hire people based on how they fit into your organization, rather than strictly for their level of competency. Be sure to look for generalists who can wear multiple hats.
The Rules
In order to grow your company into Stage 2 without losing your mind or stagnating in Stage 1, you must abide by and implement the Non-Negotiable Rules. Some of the Non-Negotiable Rules for Stage 1 are:
Focus 80% of your resources on selling 2-3 of your highest margin offerings.
Set in place a basic Customer Relationship Management (CRM) system.
Generate, track, and preserve cash.
Create a basic monthly KPI Flash Sheet.
Embrace the chaos inherent to a new organization; develop process only where necessary.
Command the team and inspire the employees.
The proper implementation of these rules could be the key element that defines the success or failure of a Stage 1 company.
The Leader Must Change as the Company Changes
As a company grows, so must the leader. Each Stage of Growth requires something different from the leader. Understanding what is required of you as your company evolves can either propel the company forward or cause the company to become ‘stuck’ – profits never materialize; sales suffer; and there is high employee turnover.
In Stage 1, your business needs you to be a leader that guides the team with a strong vision, focuses on people’s potential, and takes charge to lead the organization through chaos.
As the leader of a Stage 1 company, you should be spending at least 40% of your time in a visionary mode – you need to provide your team with a vision of where the company is going and how you are going to get there. A Stage 1 company is CEO-centric – meaning the CEO is likely the ‘specialist’ who has created a product or service and is now getting their idea to take shape. Therefore, 50% of your time should be spent as the technician or the specialist while only 10% of your time will be spent as a manager.
What’s next?
Where survival is the name of the game in a Stage 1 company, that’s not the case going into Stage 2. Now it’s all about growth.
