The Transition to Stage Two
1. First Stage Thinking
The focus and effort of an organization in Stage One or “startup mode” can change dramatically as it moves to Stage Two. Startups often hire “Stage One” people without thinking about whether they will succeed as the company grows. These people are often good at getting the business “out of the gate” but often are not well suited to take the organization to the next level. We witness these people being mavericks or individualists who are very capable carrying the ball by themselves.
However, there’s a point in in time when the company should hire the next set of major players who know how to scale up.
Unfortunately there’s a lot of resistance to do so. The CEO handpicked his Stage One roster to get the organization off the ground and often these people are extremely loyal, good friends or even family. Their blood, sweat and tears were instrumental to get things going. If the business is now in Stage Two then their efforts in Stage One of the business were successful.
Companies moving to Stage Two need more structure, focus and accountability from the CEO down. Its as if you wake up one morning and you’re no longer the sexy start up but you aren’t a grown up business either. Systems that used to work begin to “get in the way”. Stage Two requires the business to develop discipline and repeatable processes. There needs to be a whole shift in mindset and activities by the CEO. First up will be creating a leadership team that can move the business through the next stage.
2. The Transition
Building out a new executive team is critical to move to the next stage. This means that the CEO needs to make some difficult decisions if the executive team requires new faces and the departure of some old ones. By instituting some useful processes this effort can be managed more effectively.
One step is a purposeful review system for leadership. It should measure five areas:
- On-the-job performance [Your typical quantitative goals]
- Peer group relationships [How well do they play with the other members of the team]
- Management/Leadership [How well they develop the people around them]
- Vision & Values [How well they model/activate these ideas across their team and the whole organization]
- Best Practices/Innovation. [How well they integrate best practices and how well they inspire, support and foster new ideas]
Once the CEO starts a rhythm using this new review process some members of the Stage One team may soon feel out of place. The CEO needs to make bold and tough calls to ensure the members of the leadership team are the right people for the next evolution of the business.
3. Coaching the Stage Two Team
John Wooden was one of the most successful basketball coaches of all time. 10 NCAA Championships, a 620-147 record in 27 seasons with UCLA including 4 undefeated seasons.
Coach Wooden was famous for starting each season with his new team by beginning with the basics. Coach Wooden wouldn’t start with layups or defense, he started with shoelaces! He started with fundamentals and worked up from there. His team had no blisters, or sprained ankles that could cause a player to miss a game or two.
He also gave them each a sheet of paper called The Pyramid of Success. Just ask Kareem Abdul-Jabbar or Bill Walton, two of Wooden’s pupils, [and two of the finest players to ever have played the game], if this approach worked for them.
The truth is that the best leaders are the best learners. The key to coaching a new team is to ensure they all have the fundamentals. Simple stuff, such as how to run a meeting or how to identify the right priorities and goals to help the organization mature. These are fundamental skills.
We also learn from coaches like John Wooden that being super smart isn’t the only criterion for getting a spot on the team; you have to play well with others. This is a critical and often overlooked ingredient for an executive team to take the company to the next level. Those leaders who engage more frequently with their colleagues in activities that build trust score higher on The Five Practices of Exemplary Leadership (our evidence-based model of effective leadership) than do those who engage less frequently in these activities.
4. Team Cohesion
The Stage One team has fewer problems working together. One reason is that this team is anchored to a common objective…to launch the business. Since there is less structure at the beginning there are fewer barriers. The team tends to deploy tremendous energy in the exploration of many opportunities that presents itself with less “boundaries”.
This changes as the company matures – there needs to be more process, and desire to work within some peripheries. In Stage Two we tend to see rise of “internal politics” and political problems on the executive team that are a prelude to failure.
If two executives are unable to work through their differences then the CEO needs to take bold action. With support and coaching executives can make decisions together despite their sometimes radically different perspectives. There are specific processes that help executives work out their issues privately, then come together as a united front behind the best choice.
This is NOT consensus building. No one is selling out. Executives have just been taught the art of decision-making where you express your dissent, lobby each other, hear everyone out, and then get to a decision.
Organizations can deploy team effectiveness sessions to ensure that everyone is open, honest and capable of providing each other with the straight talk necessary to identify each other’s behaviours that add to the strength of the team and behaviours that can derail the team.
Feedback is too often viewed through a frame of evaluation and judgment: good and bad. Right and wrong. Top ten-percent. Bottom quartile. These frames raise resistance. But when you frame feedback as an essential part of learning, it becomes less about your deficiencies and more about your opportunities.
In Stage Two the company has clearly defined its vision and big goals. If it wants to build the energy and trust to carry it forward through this stage towards stages three and four [where momentum takes hold and things really move] then, this is the stage the executive needs to develop discipline, focus and accountability and something called “togetherness”.
The word “together” is a powerful social cue to the brain. In and of itself, it seems to serve as a kind of relatedness reward, signaling that you belong, that you are connected, and that there are people you can trust working with you toward the same goal.
Human beings are profoundly social. We are hardwired to connect to one another and to want to work together. Frankly, we would never have survived as a species without our instinctive desire to live and work in groups, because physically we are just not strong or scary enough.
The feeling of working together has indeed been shown to predict greater motivation, particularly intrinsic motivation, that magical elixir of interest, enjoyment, and engagement that brings with it the very best performance.
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Article by Scott Aberg
Images from Wikimedia
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