The Three Faces of a Leader – Stage 2
In Stage 2, the leader is ideally spending 40 percent of their time and energy wearing the Visionary Face, 20 percent wearing the Manager Face, and 40 percent wearing the Specialist Face.
In Stage 2, the leader is ideally spending 40 percent of their time and energy wearing the Visionary Face, 20 percent wearing the Manager Face, and 40 percent wearing the Specialist Face.
As in Stage 1, leaders are spending most of their time and energy between the Visionary and Specialist Faces. The addition of more employees means there are more resources to help with delivering services to customers, which frees up the leader’s Specialist time, allowing it to decrease from 50% in Stage 1 to 40% in Stage 2. More employees also means that time spent wearing the Management Face increases from Stage 1 (from 10% to 20%).
In Stage 2, the organization is still owner-centric, which means the leader is heavily involved in the work. As a Specialist, the leader is involved with things like creating the products for customers, delivering the services to clients, and applying their personal expertise to the company’s offerings.
Equally important at Stage 2, however, is for the owner to spend the same amount of time wearing the Visionary Face. This is time spent setting the vision for the company and tying that vision back to daily tasks. Without time spent thinking critically about where the organization is headed, it’s challenging to get buy-in from the team, and the team must maintain a high level of organizational confidence to keep the company advancing.
With more employees, and more specialization with the work that they are doing, the leader must invest time wearing the Manager Face. Instead of doing all the work themselves, leaders should spend more energy (compared to a Stage 1 leader) providing oversight and direction.
It’s common for a Stage 2 leader to spend too much time wearing the Specialist Face because their focus is on continuing to grow revenue. Oftentimes, they also feel most comfortable and accomplished as a Specialist—after all, there’s a good chance they have natural talent in the area in which they started a business (i.e., they’re a great electrician or a talented designer). But a Stage 2 business needs its leader to be more than a Specialist; it needs a Visionary as well.
Being a Visionary can be a new responsibility for many business owners. It’s a necessary component of a Stage 2 leader because they are recruiting new employees and working to retain the staff they already have. They must be willing to spend the energy painting a vision of the future that inspires others to want to help achieve it, or they will be left to achieve it alone (an impossible task, no matter how much talent they possess).
Stage 2 leaders can also struggle to allocate the necessary time to wearing the Manager Face. It’s important, though, not only for the employees that are currently on the team, but also in preparation for Stage 3, when the leader will focus on delegating more work to the team (Stage 3 is the Delegation Stage). The leader must begin to empower and develop key members of the staff to position the organization for that critical transition.
Three Faces of a Leader Misalignment
A veterinary doctor opened her own clinic to achieve a simple mission: to provide the best care possible to animals. Gifted and hard-working, she attracts a loyal client base who appreciates her attention to detail and personal touch. It isn’t long before she starts to get more clients than she can handle, leading her to hire another vet and more technicians. As the workload increases, she keeps giving more of her time and energy to the day-to-day work. Her main concern is that the animals won’t receive the same high level of care, so she spends a lot of time not only with her own patients but also monitoring the work of the rest of the staff.
Despite all of her efforts, complaints are starting to come in. Customers say they no longer know what to expect—the quality of their interactions with the clinic vary greatly from one day to the next. The vet techs are feeling micro-managed, and there is a general sense of confusion and impotency. The worst part for the owner is that she is on the verge of burnout. She can’t work any harder but doesn’t know how else to help her team.
For this business owner, the Specialist Face is the only one she’s truly comfortable wearing. As long as she is with her patients, doing the work, she loves her job. Though she was enough of a Visionary to start a clinic, she must adjust to the needs of a growing business in order to better serve it. By spending more time wearing the Visionary Face, she could be cultivating enthusiasm and unity within her team. And even a few hours each week spent wearing the Manager Face would go a long way towards setting expectations, improving communication, and developing new leaders.
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.
Gates of Focus in a Stage 2 Business
A Stage 2 company’s Gates of Focus are Profit first, Process second, then People third.
A Stage 2 company’s Gates of Focus are Profit first, Process second, then People third.
Just as in Stage 1, Profit remains the top priority for a Stage 2 business. The company needs to maintain its focus on Profit so it has the capital needed to fund continued growth as it begins to transition from being an owner-centric business to an enterprise-centric business. In this Stage, reviewing margins by revenue groups and customer segments and ensuring employees know how the company makes and keeps money are ways that a leader can successfully show a focus on Profit.
However, in Stage 2 Process moves up to the second priority ahead of People. With 11 to 19 people, the organization has increased in complexity and needs to put greater attention on process and systems in order to ensure quality. Otherwise, the new employees who have joined the company will experience chaos and instability, both of which are likely to drive them away.
The People Gate drops to third priority in Stage 2. This does not mean people are unimportant, but it means People do not require as much of a focus for growth in Stage 2. With the right systems and processes in place, and with clearly defined Brand & Core Values, the company’s employees will have a strong foundation that allows them to execute consistently.
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
A small moving company is starting to have success. After two years of steady growth and chasing down whatever business they can find, they are finally able to book jobs well in advance. Their customer base is growing and the pressure of running a start-up is lifting. They are adding new employees, but the owners are also eager to reward their original employees for sticking with them by offering more benefits. They purchase a new truck that’s safer and more comfortable, new equipment to help make the work easier, and company phones to help improve communication. The employees are all grateful for the improvements and morale goes up.
As the expenses increase, however, the owners face a new challenge that is much more concerning: can they make payroll? Business has been steady but has plateaued and isn’t increasing at a fast enough rate to cover the additional expenses they’ve incurred. Just when they’ve added new employees, they start considering cutting back again on staff.
These Stage 2 business owners have made the mistake of making People their first priority. Profit used to be their main focus and driver of decisions. Whereas most of their time and energy was going towards marketing and maintaining efficiency, they have now shifted their focus to how to retain old employees and attract new ones. The danger in overspending in this one area, though, outweighs the immediate benefits. While the company’s employees will be happy in the short term with nicer equipment and more perks, they will suffer in the long run if the company cannot remain profitable and has to let people go or close altogether.
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.
Builder-Protector Ratio in a Stage 2 Company
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.
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.
Leadership Style Blend in a Stage 2 Business
A Stage 2 leader captains the team, exemplifies a standard of high performance, and exerts influence to achieve success. This ideal blend results in the best of both worlds: a team that is being developed and encouraged by a leader who demonstrates high performance and conclusive decision-making.
The ideal leadership blend for Stage 2 is Coaching, Pacesetting, and Commanding.
A Stage 2 leader captains the team, exemplifies a standard of high performance, and exerts influence to achieve success. This ideal blend results in the best of both worlds: a team that is being developed and encouraged by a leader who demonstrates high performance and conclusive decision-making.
Primary Leadership Style: Coaching
The Coaching leader communicates a belief in people's potential and an expectation that they do their best. The coach regularly provides feedback and instruction and is willing to put up with short-term failure if it furthers long-term learning.
As a coach, the leader of a Stage 2 company needs to be someone who develops the team, identifying and grooming strong performers who can grow into the supervisors and managers that are needed as the company grows.
In the Ramp-Up stage, having a coaching leader who focuses on and builds the team’s potential is important to attract and keep high performers.
Secondary Leadership Style: Pacesetting
Pacesetting leaders set the bar for success and exemplify high standards in the organization. In Stage 2, this is important to keep momentum going.
The Pacesetting style ensures the organization understands how to properly deliver the products and services to customers based on the leader’s personal expertise and experience.
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 an organization in Ramp-Up mode needs to continue advancing, and a decisive leader allows them to. Without Commanding as the tertiary style, the company can easily become stuck while waiting on important decisions to be made. A leader employing the Commanding style takes charge to lead the organization through the fast-changing environment that can typify the Ramp-Up Stage.
Leadership Style Blend Misalignment
The CEO of a company that restores classic cars got into the business because it was his passion. As someone who lives and breathes automobiles, he never minded working long hours or making personal sacrifices to keep the business afloat. Now he has a thriving business with 13 employees and is excited to keep growing. He has big plans to add additional shops and expand to new locations.
As the business has grown, though, some things have changed. The like-minded employees he started out with were always able to meet his high standards and shared his same vision. With a bigger team, he finds that he is double-checking their work and settling disputes with dissatisfied customers. Quality has slipped. His solution is to gather his core team and give them pep talks—remind them of why they love this work and what they’re shooting for—but they complain about a lack of structure, guidance, and the personal development needed to grow additional leaders.
This CEO’s natural Leadership Style is Visionary, which served him well when he started out on his own and was recruiting investors and his core team. With a bigger team, though, he needs to start building into his employees more through the Coaching style. They need more than just a vision to do their jobs. Primarily, he should be developing two to three supervisors, because by mentoring them and developing their understanding of the business, they could implement structure that would bring clarity and focus to the staff.
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 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 11-19 employees.
The challenge of hiring quality people - Stage 2
A Stage 2 business has between 11-19 employees. One of the top five challenges businesses of this size face is hiring quality people. A Stage 2 business is beginning to move away from hiring generalists to hiring more specialized talent. This marks a significant shift in procedures which can be difficult to get right—especially if the company is growing rapidly.
A Stage 2 business has between 11-19 employees. One of the top five challenges businesses of this size face is hiring quality people. A Stage 2 business is beginning to move away from hiring generalists to hiring more specialized talent. This marks a significant shift in procedures which can be difficult to get right—especially if the company is growing rapidly.
The obvious threat posed by this challenge is that the business won’t be able to sustain growth if it doesn’t have the right team in place.
Typical Symptoms
The typical symptoms that can be found in a company that is struggling to hire quality candidates include:
Open positions remain unfilled
Requirements for identifying good candidates are unclear
New hires are not qualified to perform the work
These symptoms range from not being able find anyone qualified to do the work (meaning that there is no one in the candidate pool who has the right skills), to hiring someone who turns out to be unqualified after the fact. If a new hire is unable to do the work, there’s a good chance that the requirements for the position were unclear.
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 is struggling to hire quality candidates, there are three elements that should be implemented in order to address the challenge.
Establishing a clear promise to the market through Brand & Core Values will hep the company stand out in the labor market.
Working on Master Processes, which include interviewing and onboarding, will create more structure and consistency in the hiring process.
Establishing clear roles and responsibilities through Organizational Structure will ensure the company knows the type of candidate that is needed.
Why this Challenge Must be Resolved
Every business needs people with the right skill set, in the right positions, in order to function at a high level. Not only is this important for the success of a business at its current Stage, but also if the business is going to grow into the next Stage. Getting quality people in well-defined positions is critical to the success of a Stage 2 business.
To get help with implementing the three Elements recommended in this article, contact The ReWild Group or check out our Element Guidebook Series. Not sure what Stage of Growth your business is in? Use the Stage Calculator to find out!
Stage 2: Ready to Ramp Up?
When a company has grown to 11 – 19 employees, survival mode is quickly replaced with growth as the top priority. This is called Stage 2, or Ramp Up.
Ready to Ramp Up?
When a company has grown to 11 – 19 employees, survival mode is quickly replaced with growth as the top priority. This is called Stage 2, or Ramp Up. This is a critical stage for the business owner who is starting to worry about the management of their growing staff and many other issues that can arise as a company begins to ramp up.
The CEO of a Stage 2 company is still the center of the business. All decisions run past the leader and this aspect doesn’t change until Stage 3. But what does change is that growth now becomes critical. The company needs to support higher sales levels and must start to generate consistent positive cash flow. The key objectives at the Ramp Up stage include:
Setting Key Performance Indicators to keep informed about how the company is performing
Organize and refine three revenue groups and customer segments
Preparing to transition to an enterprise-centric as the company approaches Stage 3
Focus first on Profit, then Process, and lastly People
Organize, Diversify, and Ramp
In the chaos of rapid growth, it’s easy for a leader to ignore key indicators of how the company is doing. Cash flow, for example, can get very thin quickly and without much warning.
As a Stage 2 company, the leader is going to find his or her range of capability and influence being pushed to the edge. This is a time where leaders can really get burned out. It’s at this time when the proper delegation of responsibility and authority can advance the company into the next stage of growth. However, failing to delegate appropriately will surely prevent advancement into the next stage.
As a Stage 2 company, we also start seeing the beginning of diversification within the organization and infrastructure. In contrast with Stage 1 where everyone was wearing all the hats and could do everything, in Stage 2 people begin to differentiate their tasks and start to specialize.
The Rules
Some of the Non-Negotiable Rules of Stage 2 are:
Organize Business Development (Marketing, Sales, and Customer Service) around the company's 3 Customer Segments.
Expand to a basic daily, weekly, and monthly KPI Flash Sheet.
Ensure employees know how the company makes and keeps money.
Clarify positions and roles in all departments.
Develop 3 employee supervisors to be responsible, accountable, and proactive.
Set in place an effective Team Mindset throughout the company supported by clear Core Values.
How do you lead a rapidly growing company?
If Stage 1 was about surviving the chaos, Stage 2 is all about corralling the chaos. The ability to take the initiative, develop your employees, and have a positive influence on them are critical competencies of a Stage 2 Leader. A “head coach” leadership style is required as you begin to hire quality people and continue to improve sales.
In Stage 2, your business needs you to be a leader that coaches the team, exemplifies a standard of high performance, and exerts influence to achieve success.
A Stage 2 leader is still spending significant energy as a Specialist (40%) and Visionary (40%) , but their Manager time is increasing from 10% in Stage 1, to 20% in Stage 2. Because the leader must start delegating authority and responsibility, this is a perilous stage for most entrepreneurs. Many leaders will try to hold onto all the control, continuing to make all the decisions, but this is a mistake. This is the stage where entrepreneurs begin to feel stretched too thin, frustrated that people aren’t doing their jobs and worried that things are getting out of control.
A leader who is open-minded, willing to look at themselves first when things go wrong, and who is constantly in ‘learning mode’, can take their company through Stage 2 and have the all the pieces in place to begin Stage 3.
Once you’ve made it through Stage 2, Ramp Up, you’ll head into Stage 3, Delegation. In Stage 3 the CEO starts to delegate decision making and if they aren’t a self-aware leader, danger lurks just around the corner.
