Destinos Patrimonio de la Humanidad en España (Inspiración Viajera) (Spanish Edition) 9798499356685, 8499356680, 9788499356686

Table of contents :
Copyright
Introduction
The Stages of Growth
Gates of Focus
Builder-Protector Ratio
Modality
Leadership Style Blend
Three Faces of a Leader
Non-Negotiable Rules
Classic Challenges
The Elements of an Exceptional Business
Transition Zones
Conclusion
Further Reading
About the ReWild Group

Citation preview

Copyright © 2021 The ReWild Group All rights reserved The characters and events portrayed in this book are fictitious. Any similarity to real persons, living or dead, is coincidental and not intended by the author. No part of this book may be reproduced, or stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission of the publisher. ISBN-13: 9798499356685 Cover design by: Tehra Allen Library of Congress Control Number: 2018675309 Printed in the United States of America

Contents Copyright Introduction The Stages of Growth Gates of Focus Builder-Protector Ratio Modality Leadership Style Blend Three Faces of a Leader Non-Negotiable Rules Classic Challenges The Elements of an Exceptional Business Transition Zones Conclusion Further Reading About the ReWild Group

Introduction This series of guidebooks is written for business owners, by business owners. The concepts that are explained and illustrated are based on a methodology that has been developed across 30 years by studying more than 1,300 small and midsize businesses. Organization ReWilding is powerful, and it works … which is why we’re excited that you have this book in your hands. If you’re looking for effective solutions to help you navigate business growth, you’ll find them here. In order to help you get the most out of the book in a short amount of time, here are some basic guidelines and explanations. The book does not have to be read in order, although we do recommend beginning with Chapter 1, “The Stages of Growth,” as it lays the foundation for the rest of the content. After the first chapter, you can read straight through or skip around; the order is not critical to the understanding. Chapters 2 through 10 identify and explain the different dimensions of a healthy business. It’s helpful to think of these chapters as illuminating various facets of a diamond. Each facet is one way of looking at the diamond, but no one facet provides the full picture. In the same way, healthy businesses exhibit similar characteristics that can be viewed from different angles. When taken together, they create a complete picture of what a successful business looks like. Nearly every dimension represents an ideal for businesses to follow. For that reason, after the definition of each dimension, you’ll find a section that illustrates what happens when a business is out of alignment with the ideal. This brief example serves to cement the concepts that have been discussed and bring each dimension down to a more tangible level. To help you put the information to use immediately, there is also an application section at the end of each chapter. You’ll find three or four questions to help you reflect on the material and apply it to your

business, as well as a tip that you can carry with you. Download a free copy of the Stage 5 Workbook to record your answers (www.ReWildGroup.com/Stage-5). Every business owner’s journey is different, but that doesn’t mean you have to forge a path on your own. Glean valuable resources from this book and visit us online for even more: www.ReWildGroup.com.

The Stages of Growth Overview The Stages of Growth is a business growth methodology that has been developed over 30 years of ongoing research and observation of more than 1,300 small and midsize businesses across dozens of industries. The focus of this research is on understanding and deciphering the patterns, behavior, and characteristics of growth these businesses experienced. What we were trying to understand, and continue to investigate, is why some businesses successfully navigate growth and others don’t. At the core of this methodology is the reality that businesses are human ecosystems, comprised of complex, interrelated, dynamic components and relationships. These human ecosystems have an optimal condition in which growth can be achieved. What the research found is that complexity in an organization stems from the number of employees; not the industry or the annual revenue, but simply the number of people employed by a business. It follows, then, that as a business adds employees, it grows in complexity. A 10-person organization is different than a 200-person organization. The focus, the types of structures that need to be in place, and the opportunities for growth all look very different for these two businesses. Furthermore, the research identified seven distinct Stages businesses traverse. Each Stage spans a specific number of employees, and within each of these Stages, there are rules and ideals that must be in alignment in order to create the optimal environment for business growth. When a business fails to follow the rules of growth, it often gets stuck or regresses.

Without a clear model for understanding the growth of a company, most entrepreneurs don’t have the level of predictability necessary to survive over the long haul. There are simply too many doors to choose from to select the right ones at a high enough rate to keep the business advancing. At each new level of complexity, the changing rules make it more likely that the business will hit a wall or a dead end. The Stages of Growth provides a roadmap for the business leader. Organized by the key dimensions of a business, it offers clear guidance on the rules of growth for each Stage. Business owners benefit from the Stages of Growth by learning to diagnose where their business currently is, understanding what needs to be done to get the business where they want to go, and even predicting and proactively preparing for what comes next as the business grows. The power of the Stages of Growth is multiplied within an organization when it becomes a shared framework for the leadership and management team to communicate about growth. As team members begin communicating about key issues using the same language and understanding, the organization functions more smoothly. Following is a brief description of the characteristics of a company at each Stage of Growth. Stage 1: 1-10 Employees In Stage 1, a business is in the Start-Up stage, where things are small and agile. Making sure there is enough profitable revenue is

the name of the game, followed closely by finding the right people for the tight-knit group. Stage 2: 11-19 Employees In the Ramp-Up phase, processes become more important, and more structure needs to be introduced. Just as with Stage 1, the main focus is still on having enough profitable revenue to keep the lights on. Stage 2 is the last of the owner-centric Stages. Stage 3: 20-34 Employees As the first enterprise-centric Stage, delegation is crucial. Stage 3 represents the hardest transition for the owner due to the dramatic shift in their relationship with the business. Investing in the beginnings of an early-stage management team is critical to set up the business for future growth. Stage 4: 35-57 Employees In Stage 4, that early-stage management team needs to be professionalized, and that’s the name of this Stage – Professional. Whether an organization trains existing managers to the next level or hires outside professionals, this is a building block that cannot be missed for successful growth into further Stages. One of the most important things the professional management team does in Stage 4 is to work on the processes and systems of the organization. Leveraging their functional expertise, managers build the infrastructure that supports future growth. Stage 5: 58-95 Employees Stage 5 is all about Integration. The focused work the professionalized managers did in their respective departments in Stage 4 can often create silos. Stage 5 is where you bring those units together into an integrated management team. The management team begins to handle the heavy lifting of running the business—still with a great deal of oversight and guidance by the CEO. But this training ground is where the CEO will begin to develop their leadership team that will be needed in Stages 6 and 7. Stage 6: 96-160 Employees Stage 6 is Strategic. A business can often grow successfully up to Stage 5 with a strong team and effective operational processes, but Stage 6 requires a different level of strategic planning and thinking. The leadership team is handling more of the operational side of the business, with the CEO being less hands-on in those

areas. Maintaining company culture is critical in this stage, so a big focus is on people in Stage 6. Stage 7: 161-350 Employees Stage 7 is the Visionary stage. A visionary leader is needed throughout all the Stages of Growth, but Stage 7 is characterized by the need to recapture the innovation the company had in earlier stages to avoid becoming stagnant, stuck, or irrelevant in the marketplace. The leadership team that has been groomed and grown over the last stages is now contributing significantly to the strategic vision of the company. Each Stage of Growth has its own characteristics and priorities. Keeping in sync with each Stage’s ideals helps organizations sustainably grow and avoid becoming stuck. If an organization has missed prior Stage requirements, it must play catchup to reach the maturity of its current Stage. Failure to bring the organization into alignment with the rules of growth eventually causes an organization to stagnate, stall, or decline.

Stage 5 Stage 5 refers to an organization with between 58-95 employees. There are typically 11 to 16 managers and four to five executives at this phase. As the Integration Stage, a Stage 5 company is at a point where siloed departments need to be brought together by strong managers to form a cohesive, high-functioning organization. Profit is a big focus for a Stage 5 company because the number of employees increases greatly and require a significant amount of resources. The leader should be identifying and mentoring key managers who will eventually form the Leadership Team. Stage 5 Anthem I am the leader of a Stage 5 company. We are in the Integration Stage, where I must bring together the departments and teams that ran independently in Stage 4. In this stage, I need to grow key contributors of the Management Team into an interdependent, execution focused Leadership Team. Implementing a shared project management process is crucial to ensuring the organization can successfully initiate and manage change. We can’t lose focus on profit, which can suffer with a growing number of employees. Revamping the company Business Model and creating an integrated annual budget is a priority for the Leadership Team and me. I need to secure a

plan to keep the company production capacity utilization between 70% and 80% to maintain profitability. This can be helped with the revitalization of KPIs throughout the company and cross-functional teams revamping Master Processes. I should set aside capital to invest in growing and training my staff. My business needs me to be a leader that guides through collaboration, inspires the team with a grand vision, and builds loyalty through comradery. Stage 5 Application Before going any further, be sure to download the Stage 5 Workbook, a companion guide to this book. The workbook organizes your notes and answers to the application questions, helping to maximize what you get out of the book. Key Questions: Are you empowering your managers to take leadership of their departments and collaborate with the rest of the Management Team? As the leader of a Stage 5 business, do you know how many employees you would like to eventually have? How are you planning for that growth in employees? Which lines from the Stage 5 Anthem can you relate to the most? The least? Tip: Continue to invest in your managers and cast a strong vision for the company. ➢

To keep both the energy and the ability to move forward, your company needs you to lay out the direction and prepare future leaders.

Gates of Focus Overview All activity in an organization falls into three fundamental areas: People, Profit, and Process. Think of each of these as a door or gate behind which lies opportunities for the organization to grow.

At any given Stage of Growth, the patterns observed in growing businesses suggest that there is an ideal order of prioritization of these three Gates. Said another way, one of these three holds the greatest opportunity for growth in your organization, based on your Stage of Growth. People The People gate covers everything that affects the human resources of an organization. When you prioritize the People Gate of Focus, energy goes to the development and well-being of your employees. If you are improperly focused on People—meaning you are focused on People when your organization needs you to be focused on Profit or Process—you may find that your organization lacks the revenue or profit to grow, or you may find that your processes are not as mature as they need to be to handle existing or future volumes of business. Key question: When you’re faced with a decision, your first thought might be, “How will this affect my employees?” Profit The Profit Gate covers everything that affects the organization’s revenue and profitability. When you prioritize the Profit Gate of Focus, your energy focuses on activities that generate revenue and increase profits. If you are improperly focused on Profit, you may have disengaged employees and poor quality due to lack of process.

Key question: When you’re faced with a decision, your first thought might be, “How will this affect the company’s profitability?” Process The Process Gate covers everything that affects the manual and automated processes and systems used by the organization. When you prioritize the Process Gate of Focus, your energy goes to developing, refining, and testing processes and systems. If Process is an improper focus, you may find that your organization lacks the revenue or profit to grow, or your people may feel overlooked. Key Question: When you’re faced with a decision, your first thought might be, “How will this affect the day-to-day processes and the scalability of my business?” Prioritizing the Gates of Focus Each of these areas is important all the time. However, their ideal priority changes based on your Stage of Growth. The Gates of Focus can be likened to having multiple children. All are important, but your focus changes based on the child’s age and needs. Just because a newborn needs a lot of attention does not mean the older children are not valued. A teenager may require more energy than a 10-year-old. All the children are equally important, but there are times where one child requires more attention and focus. Similarly, all the Gates of Focus are important, but the optimal priority changes as your business grows. Keep in mind that most business leaders have a natural focus—a personal preference for one of the Gates. This area may be the one that comes easiest to the leader or is based on fundamental beliefs of how a good business is operated. While some leaders have been gifted with a talent for operations, others are skilled at engaging their people; others find prospecting and winning work to be second nature for them. As the business leader, it’s important to recognize the need to adjust personal preferences toward People, Profit, or Process based on what the organization needs for its current Stage of Growth. Businesses that fail to adhere to the Gates of Focus eventually experience the ramifications—plateauing, receding from prior heights, or oscillating between Stages. Sustainable growth is achieved when your organization stays aligned with each Stage’s Gates of Focus.

Gates of Focus in a Stage 5 Company

Stage 5’s Gates of Focus are Profit, People, and Process. In Stage 5, the attention must now return to Profit to ensure that enough capital is generated to sustain a larger organization. A leader can successfully focus on Profit in two key ways: 1) ensuring business development has a synergistic strategy across marketing, sales, and customer service to generate consistent and growing revenue; and 2) tasking departments to lower costs. People increases to second priority in a Stage 5 business after being the third priority in Stage 4. The increase in priority ensures that leaders are spending sufficient energy to integrate key contributors of the management team into an interdependent, execution-focused leadership team. The added focus on People is also needed because a significant number of new employees are added throughout Stage 5. The heavy investment in Process in Stage 4 allows this Gate to fall to third priority in Stage 5. It’s worth noting that if an organization didn’t take care of Process in Stage 4, they may be faced with playing catch-up in that area during Stage 5. If Process has been given sufficient attention, the company should be able to rely on the processes and systems infused during the prior Stage to handle the increase in volume and people. With Profit as the top priority, 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 of a company that designs and manufactures cell phone accessories has a natural tendency to focus on his employees. As someone who values his team, he has always made it a point to recognize and reward individual contributions. Part of his strategy to attract and retain top talent has been to offer great benefits and an exceptional work environment. As the company has grown, he wants to make sure that the new employees feel like they’re part of the family. He decides to invest in new office space as a way to celebrate a successful year, to reward the current employees, and to welcome the new ones. With the help of a professional designer, he creates a modern and vibrant workspace that thrills the entire team. As he continues to grow the company and add new team members, he sees a dip in profitability. The total number of employees has reached 74 and he is concerned about being able to

maintain the same level of benefits and salary structures for any additional hires. When an opportunity arises to start production on a new product, he seizes on it as a way to increase revenue. However, it requires the purchase of expensive new machinery. With so much money invested in the office space, he simply doesn’t have the capital to pursue it. This CEO has put People as his first priority, and while his motives were good, he now finds himself in a position where he cannot afford any additional staff. He doesn’t have the funds needed to pursue new business opportunities that would ultimately lead to the expansion of the staff and benefit the entire team in the long run. If he had pushed through and maintained the old office space until profitability had improved, he would have more freedom to invest in the kinds of amenities that are popular with the team and raise morale. Gates of Focus Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: Of the three Gates, which are you most naturally inclined to focus on? How is your business currently prioritizing the three Gates? Has misalignment impacted your business? If so, how? Tip: Focusing on Profit in Stage 5 positions the company for sustainable growth. ➢ While it’s important to offer competitive pay and benefits to your employees, it must be balanced with maintaining Profit during this Stage, which is critical to the long-term health of the organization.

Builder-Protector Ratio Overview The Builder-Protector Ratio measures the overall organizational mindset as it relates to the levels of confidence and caution within the company. It is captured as a mathematical expression—a ratio— of the relative confidence and caution the organization feels as a whole. Why is knowing an organization’s builder-protector ratio important? Because it provides valuable insight into a company’s health by: Measuring the company’s ability to meet and overcome its challenges Communicating the company’s willingness to perceive and take advantage of opportunities Gauging the strength of the company’s immune defense system, which acts as a barrier against low morale and poor performance Assessing the company’s willingness to embrace change Telegraphing the belief in the company’s future Conveying the company’s trust in its leaders

Builders tend to share certain characteristics. In general, builders: Are confident Say “yes” to new opportunities Are risk-tolerant and supportive of growth Like to improve the way things are done Function as the gas pedal of the organization

A Sales team often has a high concentration of Builders— individuals who quickly adapt to change and embrace growth.

In the same way, Protectors also tend to share certain characteristics. In general, Protectors: Are cautious Must be persuaded to say “yes” to new opportunities Are risk-averse and highly suspicious of growth Like to keep things the way they have always been done Function as a brake pedal and prefer to slow down the pace of change An Accounting Department may have a high concentration of Protectors—individuals who like having stable rules to follow and who double-check every action. Which mindset is better? Both the Builder and Protector mindsets have certain advantages and disadvantages. It’s useful to be aware of what those are and the possible ramifications of having too many of one or the other at any given time. If you have too many Builders, they will drive the company off the cliff with their foot still pressing the accelerator. An overly confident organization is constantly changing, moving, or chasing the next best thing. It fails to take the necessary time in critical thinking and focusing before jumping straight to execution. The organization’s offerings to the market can become unclear since they are constantly fluctuating. When an organization has too many Builders, it can sometimes grow itself out of business. If you have too many Protectors, they will eventually suffocate the company with their foot slamming the brake. An overly cautious

organization fails to adapt, evolve, and grow. The organization might miss opportunities because they are too hesitant to act. Its offerings to the market can become stale. When an organization has too many Protectors, it often stops growing and begins to retreat. Both extremes kill an organization. To thrive, an organization needs to properly balance the two mindsets at the appropriate ratios for an organization’s Stage of Growth. Determining the Builder-Protector Ratio of an Organization Developing an internal radar for the organization’s BuilderProtector ratio is important to keep the organization on the right track. One way to determine an organization’s Builder-Protector Ratio is to think about the organization’s overall mindset. A very confident organization will have a Builder-Protector Ratio of 4:1—four times the confidence as caution. An organization that has equal levels of confidence and caution will have a Builder-Protector Ratio of 1:1. A second way to determine an organization’s Builder-Protector Ratio is to look at the people in the organization. Consider how many have a Builder mindset and how many have a Protector mindset. An organization with 15 Builders and 5 Protectors converts to a 3:1 ratio—a confident organization. Another organization with 20 Builders and 10 Protectors would have a 2:1 ratio—a slightly confident organization. Individuals typically have a natural leaning towards being a Builder or a Protector. Despite having such an inclination, people are not stuck as a Builder or Protector. The leadership of the organization can help individuals adapt to what the organization needs by painting a clear picture of where the organization is going and explaining why additional confidence or caution is needed. The Builder-Protector Ratio Across the Stages of Growth It’s worth noting that, across the seven Stages, there is no time where the ideal ratio is dominated by caution—where Protectors outnumber Builders. In all but one Stage, organizations need higher levels of confidence than caution. Builders embrace change and improvement—two positive traits. But sometimes Builders don’t recognize the cost their confidence has on the organization. Their willingness to push change onto the company can create trauma that doesn’t benefit the business.

On the other side, Protectors look to protect current structures and advocate for using tried-and-true methods, which help to safeguard the company from unforeseen risks. But sometimes, Protectors don’t recognize the cost their caution has on the organization. Their reluctance to support new initiatives or embrace novel approaches can sap the strength of the organization, causing crucial market opportunities to be missed. Although different in many ways, Builders and Protectors share a desire for themselves and the company to be successful. By showing an individual how their level of confidence or caution contributes to that end goal, individuals can better align their mindset—helping the business to become better aligned with the Builder-Protector Ratio. Both Builders and Protectors can be encouraged to be more confident or more cautious through increased structure, clear language, and a shared vision. These things allow both Builders and Protectors to see the negative impact their over-confidence or overcautiousness has on the organization. If the organization has too much confidence for its Stage of Growth, increased structure, clear language, and a shared vision will slow things down and temper the confidence in the organization. For example, helping the Sales team focus on the company’s core services that already exist instead of pursuing new types of opportunities is a way to increase structure. The result is less change being forced on the organization. If the organization is overly cautious for its Stage of Growth, greater structure, clear language, and a shared vision for Protectors helps them feel assured about the company’s future. For example, providing a clear picture of what the future looks like helps Protectors at least lift their foot off the brake, allowing your organization greater forward momentum. An organization needs both Builders and Protectors. Each brings an important dynamic to the company. The objective is to have the right ratio of Builders and Protectors—the right blend of confidence and caution. Aligning your organization to the ideal Builder-Protector Ratio for your Stage creates the optimal environment for your organization to successfully navigate beyond the current Stage. Misalignment results in one of two suboptimal conditions: an organization allowing more change than it can absorb, or an organization with insufficient momentum to propel it forward.

Builder-Protector Ratio in a Stage 5 Company In Stage 5, the ideal Builder-Protector Ratio is 2:1, which means there is twice the level of confidence as caution in the organization.

This graphic shows that in Stage 5 the bar for Builders continues its growth trend, even though it is not quite as tall as in Stages 1 and 2. The organization’s confidence has strengthened again from Stage 4. This increasing level of confidence is required to support a continued march towards the focused, intentional change the organization will need during Stage 5. It’s during this Stage that the management team matures, and the organization begins to install a Leadership Team that will eventually be responsible for the daily operations of the business. The 2:1 ratio in Stage 5 reflects an organization that is readily embracing intentional change. The foot is back on the gas pedal to ensure the company has the momentum to grow. While the organization still needs a good number of Protectors, they are outnumbered by Builders. With the increase in confidence, the organization with a 2:1 Builder-Protector Ratio is solidly confident and able to mature proportionately across all functional areas. This represents a continued pattern of incremental increase in confidence from Stages 3 and 4. The organization needs to safeguard itself from individual Protectors in key positions exerting too much influence and halting the advance of the organization. Continued focus on the necessary structural elements and rules of growth will help ensure that the growing staff remains confident. Improved meeting structures and planning methods will allow the

organization to initiate and complete improvements to the organization. A maturing management team will need to work in an integrated fashion to ensure company-wide goals are understood and prioritized. One common misalignment scenario in Stage 5 is an organization that never took its foot off the gas pedal in Stage 3 or 4. In this situation, the organization has continued to embrace constant change. When such an organization reaches Stage 5, it is often battered and worn out from the exhausting pace of change. It is critical that this organization becomes focused in Stage 5 to catch up with the infrastructure that will be needed to support the company’s future growth and limit change to only what is necessary. A second scenario may arise from the near doubling of employees during this Stage. This influx of new hires can cause a dramatic increase in organizational caution, creating a misalignment from the 2:1 ideal ratio. Continued focus of energy on creating clear structures and improving processes and systems is critical to help ensure the organization maintains its confidence. This structure begins with a new hire onboarding process that instills the company’s values, which are critical in unifying an organization with so many people. Builder-Protector Ratio Misalignment The CEO of a music production company has built the business from the ground up. With 72 employees and three solid revenue groups, the company is well positioned to add more work volume and continue growing with minimal disruption. However, the CEO has an interest in helping a lifelong friend who is an up-and-coming music artist. She is undeniably talented, and the company has the studio space and recording equipment, but everything else involved with launching a new artist would be completely new to them. Nobody on the team has a background in promotion or any agency contacts who could help. Despite the pressure from the leadership team to say no, the CEO insists on pressing ahead with the new project. His company has grown, but he feels confident that it’s still capable of turning on a dime, just like when it was starting out and finding its place in the music business. Many of the newer employees are uneasy about the sudden changes and are questioning the direction of the company. This CEO never learned how to apply the brake pedal to his organization. While his confidence was a huge advantage in the early stages of the business, it has now become a liability. Rather

than taking off in an entirely new direction, he should be focusing on growth that lies within the structure that has already been built. While it’s possible he could have successfully launched a music artist when the company was small, at this point it’s far too disruptive to turn in a new direction and redirect resources to experimental pursuits. Builder-Protector Ratio Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: What is the Builder-Protector Ratio in your organization? Which mindset comes more naturally to you, Builder or Protector? Are any of the common misalignments of BuilderProtector Ratio affecting your business today? Tip: Don’t be too quick to change directions at this Stage. Confidently build on what you already have in place. ➢ You’ve invested time, money, and effort into bringing your company to the place where it is today. While new pursuits may seem enticing, consider the voices of caution within your team.

Modality Overview The term modality is defined as “a particular mode in which something is experienced or expressed.” For example, humans have five senses and each one (touch, taste, sound, smell, and sight) represents a modality of sensation. In the Stages of Growth, Modality refers to the role that each layer of the organization plays with respect to the overall organization. While the organization is a single unit, it contains different modalities that express its full function. The three Modalities, or roles, each organizational layer can play are Dominant, Supportive, and Facilitative. For a given Stage of Growth, each layer assumes an ideal modality for the organization. Dominant means the primary influencer. The layer that employs the Dominant role is the leading force of momentum in the organization to achieve the company’s goals. It is the key layer that must buy into what the organization is doing. Supportive means to help accomplish. The layer that employs the Supportive role acts as a helper towards the other layers. Facilitative means to make easier. The layer that employs the Facilitative role makes it easier for the other layers of the organization to accomplish the company’s goals. Let’s say you visit a doctor’s office. You meet three people during your visit. The receptionist checks you in and takes payment when you are done. The nurse guides you to the room, takes your vitals and initial information, and helps wrap up the visit. The doctor meets with you to review your symptoms, discuss options, and provide you a prescription. In this scenario, the doctor plays the Dominant mode and is the leading force and primary influencer of the other layers in the medical office. The Nurse represents the Supportive mode. The nurse helps the doctor and supports that layer of the organization. Finally, the receptionist is serving in the Facilitative role. This position helps makes things easier for the other layers of the organization by taking care of administrative functions. A second characteristic of the Modality dimension is that it applies to three layers of the organization: Executive, Manager, and

Staff. The Executive layer is the top layer of the organization and traditionally includes any C-level, Vice President, or Director levels. The Manager layer is the middle layer of the organization that oversees the bulk of the employees. The Staff layer makes up the remaining employees in the company, often accounting for 80% of the company’s people. Like the other Stages of Growth dimensions, there is an ideal Modality for each Stage. The rules for this dimension identify which Modality each organizational layer needs to embrace. One unique aspect of Modality is that it is the only dimension that does not change between every Stage—essentially, it is an organizational characteristic that is less dynamic than other dimensions. While it is important for an organization to be aligned with all three modalities, it is especially critical that the Dominant Modality be embraced by the appropriate layer. As the most impactful of the three modes, the Dominant Modality has the potential to cause the most drastic consequences if taken on by the wrong layer. Misalignment with the ideal Modality can dramatically impact an organization’s ability to sustain growth. If an organization is stuck, Modality is a good place to look for misalignment.

Modality in a Stage 5 Company In Stage 5, the ideal mode for the Executive layer is Facilitative, for the Manager layer the ideal is Dominant, and for the Staff layer the ideal is Supportive.

The Manager layer remains the primary organizational influence as it integrates into a cohesive, interdependent, execution-focused Leadership Team. In this Stage, there are ideally 11 to 16 managers. The Executive layer continues in a Facilitative role that encourages and makes things easier for the other layers. The Staff’s Modality continues to be Supportive, as they help the rest of the organization accomplish their roles. As in Stage 4, ensuring that the Manager layer has the skills and mindset necessary to step up to the Dominant role is critical for success in Stage 5. Organizations that have failed to develop a strong management team that can mature into the primary influencer for the organization will eventually hit a wall, causing growth to stall, or even causing the company to retreat to an earlier Stage. Modality Misalignment A large plumbing company that services both residential and commercial clients has grown to 80 employees. A plumber by trade, the CEO has a deep knowledge of the industry and has intentionally brought the company to its current place through steady growth. He has been careful to put capable managers in place over the company’s main departments: Sales, Commercial Operations, Residential Operations, and Administrative Services. One of the ongoing challenges the company faces is the competition over resources between Commercial and Residential Operations. When jobs are bid, they don’t always know the timeline very far in advance, which means inventory can change significantly

from one week to the next. During weekly meetings with department managers, the CEO’s first priority is to get status updates on all of the projects that are underway and any bids that are under review. Based on that information, he dictates to the managers which projects take priority and which get first pass on available resources. Accustomed to taking orders, the department managers are hesitant to make any judgment calls without first consulting with the CEO. As a result, they’re becoming more passive and missing out on time-sensitive opportunities that arise during the week. Rather than risk making a decision that may contradict the CEO’s, they wait until weekly meetings to address them. Instead of dictating to his managers, the CEO should be empowering them to work together and make decisions in a collaborative manner. By providing feedback and direction, he can help the managers to take ownership over their departments. As the ones who are closer to the action, they have a better grip on the details and ramifications of activities within each department and are therefore in a better position to make strategic decisions in collaboration with other departments. As long as the CEO holds on to the Dominant modality layer, however, the managers will be unable to fully perform their duties and the company as a whole will miss growth opportunities. Modality Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: In your organization, is it obvious who plays the Dominant role? Do the managers have the necessary authority and support they need to lead their departments? Are you surprised to know that sometimes the Executive layer is not Dominant? Tip: Mentor your managers and empower them to lead. ➢ The knowledge that you’ve gained in your role as the head of the company needs to be shared with executives and managers in order to have the most impact on your growing organization.

Leadership Style Blend Overview Leadership Style is a way of categorizing the various approaches of how the leader interacts with individuals in the organization. Organizational ReWilding Stages of Growth draws its Leadership Styles from research by Daniel Goleman, as documented in his book Primal Leadership. The six Leadership Styles are Affiliative, Coaching, Commanding, Democratic, Pacesetting, and Visionary.

The Principles of Leadership Style Before getting into detail about the six styles, it’s important for business leaders to understand that there are three fundamental principles of Leadership Style. 1.

2.

3.

First, every leader has a specific Leadership Style blend that is innate to them—it comes naturally. This blend is comprised of a leader’s top three styles and is known as the natural leadership style blend. Knowing your natural leadership blend provides insight into your strengths and weaknesses, which helps you to be a more effective leader. Second, there is not a single, “right” style of leadership. In fact, the ideal Leadership Style changes as a business grows. The size and complexity of the company demands a specific kind of leader for the organization’s optimal performance. Finally, leaders often struggle to adapt their natural style to meet the needs of the organization because they are unaware of the specific styles needed. Once they understand the ideal, most leaders are able to adjust how they lead to enable the organization to reach greater success.

Leadership Style is a unique dimension within the Stages of Growth framework because it deals with human connections. These connections between the leader and the people within the

organization can add or detract value; they can be a catalyst for growth or a source of stress. That’s why it’s so important for leaders to become aware of the ideal Leadership Style for their company’s Stage, and to adapt accordingly. The Stages of Growth identifies the ideal Leadership Style Blend for the organization’s top executive. This ideal does not apply to every leader or manager in the organization—just the top executive or leader of the company. Even though the ideal Leadership Style does not apply to leaders at every level, it’s still valuable for all business leaders to know their own natural Leadership Style to boost self-awareness. Having a common language across the organization provides managers with a framework to interact with their colleagues. Furthermore, if the organization needs a particular Leadership Style that is outside the top executive’s strengths, an option to close this gap is by leaning on another leader who has the needed style as a natural strength. In each Stage of Growth, there is an ideal blend of three leadership styles. This blend includes a primary, secondary, and tertiary leadership style that is optimal for that Stage. The Primary style is used most frequently; it is the prominent style for that stage. The Secondary style supports the Primary style; it is used routinely but is not as prominent. The Tertiary style is used occasionally in specific situations. The styles that are not identified in a Stage should be generally minimized by the leader during that time, as they are not the ones that the organization needs from the leader at that point of growth.

For example, in Stage 1, the organization needs a leader with a Leadership Style Blend that exhibits Visionary as primary, Coaching as secondary, and Commanding as tertiary. The blends can change dramatically from one Stage to another; as a result, leaders’ natural styles may work well in one stage but be ineffective in other Stages. The Six Leadership Styles Affiliative “People come first.” Affiliative leaders focus on creating harmony and building emotional bonds with the team. They recognize employees as people, putting less emphasis on accomplishing tasks and goals, which builds tremendous loyalty and strengthens connectedness. Affiliative leaders openly share emotions and value people and their feelings. When driving a team to reach its goals, Affiliative is right behind Visionary and Coaching as the most effective. Used to heighten team harmony, improve communication, and repair broken trust, this style is described as collaborative competence in action. As with every style, the Affiliative style has some disadvantages. It can be difficult to drive performance because of the emphasis on feelings versus tasks. It can allow poor performance to go uncorrected, and promote the perception that mediocrity is tolerated. With little feedback from an Affiliative leader, employees are left to grow and improve on their own. Coaching “Try it this way.”

Coaching leaders develop people for the future by communicating a belief in people’s potentials and an expectation they can do their best. They give feedback and instruction regularly and are willing to put up with short-term failure if it encourages long-term learning. Coaches help people identify their strengths and weaknesses, while helping align work with their career goals. By linking people’s daily work to long-term goals, coaches keep people motivated. Coaches are good at delegating—giving employees challenging assignments that stretch them versus just giving them tasks. This style works best with employees who show initiative and are looking for professional development. However, the Coaching style isn’t the right style to use if employees lack motivation or require excessive personal direction and feedback. Commanding “Do what I tell you.” The Commanding style is best used to bring a company out of crisis, to kickstart a turn-around, or to deal with problematic employees. A fire in the building would bring out the Commanding Style. Leaders who are naturally strong in this style excel at influence, achievement, and initiative. Sometimes called the coercive approach, Commanding leaders tend to demand compliance and don’t bother explaining the reason behind their actions or decisions. A Commanding leader exerts forceful direction to get better results and seizes opportunities in an unhesitatingly commanding tone. As for disadvantages, Commanding leaders tend to provide feedback by focusing on what went wrong. The Commanding Style should be used sparingly due to its tendency to erode people’s spirits, pride, and the satisfaction they gain from their work. Democratic “What do you think?” Democratic leaders forge consensus through participation. This style is most effective when used to build buy-in or to get input from valuable employees. Listening is a key strength of a Democratic leader. They sincerely convey that they want to hear an employee’s thoughts. As true collaborators who work as team members rather than top-down leaders, Democratic leaders know how to quell

conflict and create a sense of harmony. They are good at building trust and respect. This style works best when the leader is uncertain about what direction to take and needs ideas from capable employees. Even if a leader has a strong vision, the Democratic style works well to surface ideas about how to implement the vision. Over-reliance on the Democratic style can create endless meetings, where consensus remains elusive, and decision-making is frequently delayed. Overuse of this style can create a sense of confusion and a lack of direction, leaving people feeling leaderless and frustrated. Pacesetting “Do as I do.” Pacesetting leaders hold and exemplify high standards for performance. The Pacesetting style is effective when working with hard-charging sales teams, in technical arenas, and among highly skilled professionals. In these situations, the people require little direction, are highly motivated, and highly competent. Pacesetting leaders focus on how well something is done because of their need to continually find ways to improve. They set the bar for success and focus on exemplifying high standards in the organization. When the Pacesetting style is used with individuals who require more direction, it can come across as micromanaging and highpressure, leading to an erosion of confidence. The Pacesetting leader can constrict innovative thinking, which is why it should be used sparingly and with the right team. Visionary “Come with me.” Visionary leaders focus on mobilizing their people toward a vision. Vibrant enthusiasm is a hallmark of this style; it can strongly drive the emotional climate and transform the spirit of the organization. The Visionary style articulates where the company is going but doesn’t tell them how they will get there, allowing people the opportunity to innovate, think, and apply their own ideas. Through shared goals, people’s commitment to the organization grows.

People understand that what they do matters when the collective task is framed in terms of a grander vision. Visionary leaders are good at retaining talented people. They focus on igniting the spirit of innovation and instilling pride in the organization. They understand that distributing knowledge is the secret to the company’s success. The Visionary style is not effective, however, in situations where the team may be more experienced than the leader. It is also not effective when the organization needs to focus on the work being done, rather than heavily focusing on the vision for the future.

Leadership Style in a Stage 5 Company The ideal leadership blend for Stage 5 is Democratic, Visionary, and Affiliative.

A Stage 5 leader guides through collaboration, inspires the team with a grand vision, and builds loyalty through comradery. Primary Leadership Style: Democratic Democratic leaders focus on promoting harmony in the organization while building a relationship of trust and respect with employees. A Stage 5 organization has spent the last several Stages developing its management team. Stage 5 is the Integration stage, where that management team begins to integrate with other departments and creates a cross-functional leadership team. The Democratic leader builds buy-in and forges consensus while encouraging collaboration among the team. Secondary Leadership Style: Visionary

The Visionary leader guides the team and the company with a strong vision. This vision becomes especially important as the leader works to create an integrated management team. Ensuring that the key members of the organization understand a common vision and are committed to driving their departments towards that vision are what propels success. The Visionary leader ignites the spirit of innovation and instills pride in the organization. Tertiary Leadership Style: Affiliative Affiliative leaders build tremendous loyalty and strengthen connectedness by recognizing employees as people. The Affiliative style is needed in a Stage 5 organization to create an emotional connection to the organization and the management team. Creating a harmonious environment where employees feel valued is critical as the organization continues to grow. The most common misalignment in Stage 5 is a leader who is overly reliant on the Commanding style. While useful in earlier Stages, when a business reaches Stage 5 (with between 58-95 employees), a Commanding style can creative a negative culture. This heavy-handed, top-down approach is not effective with this larger number of employees. Instead, Stage 5 requires a shift away from Commanding and towards styles that develop emerging leaders —Democratic and Affiliative. The second most common misalignment is the continued reliance on the Coaching style at the expense of emphasizing Democratic and Affiliative. Coaching is the primary leadership style needed in the prior three Stages, so it is common that leaders have learned to emphasize that approach in how they oversee the organization. However, this size of organization needs the leader to lead primarily with the Democratic style that is supported by Affiliative. The Coaching should be handled by the leadership and management teams at this Stage. Leadership Style Blend Misalignment The CEO of a commercial metal fabrication and welding company is naturally a Coaching and Pacesetting leader. She has high standards for excellence and likes to meet people where they’re at, developing them to a place of competence and high performance. She has built a strong leadership team that has been loyal to her for years. Thanks to winning a couple of key contracts, the company has grown rapidly over the past year and is now up to 68 employees.

Her focus is currently on the leadership in Business Development (primarily Sales and Marketing). She is mentoring leaders from those departments, working closely with them to continue to earn more business and grow the company. She considers it a great success when they close on a huge new contract —that is, until the Operations Manager confronts her over it. He tells her that his team is not equipped to handle the new client, who is in an industry they’ve never worked with before. He and his team have been focusing on breaking into smaller teams and specializing. Now, thanks to the new contract, they must switch gears completely and take on a steep learning curve in order to service the new client. The CEO has been focusing on coaching her managers individually rather than gathering them together as a unified team, listening to their concerns, and consistently instilling a vision for the company that they pursue together. As a result, the departments are siloed; they’re pursuing projects and making decisions without thinking about how they will impact the company as a whole. Instead of working together as a cohesive leadership team that is based on consensus, the leaders are competing against one another for resources. It is up to the CEO to provide a democratic environment where ideas are shared, and a sense of unity is constructed. Leadership Style Blend Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: What is your natural Leadership Style Blend? How does the ideal Leadership Style Blend for a Stage 5 business benefit your team? If your natural style does not align with the ideal style for a Stage 5 business, are you willing to adapt? If so, how? Tip: Make the long-term health of the company your first priority. ➢

Although your natural leadership style may not match the ideal for a Stage 5 business, keep in mind that the needs of the company will change as it grows, and your ability to adapt will play a big part in ensuring its success.

Three Faces of a Leader Overview The Three Faces of a Leader measures the proportion of time and energy a leader spends embodying the three primary leadership roles, or faces, within an organization. The Three Faces are Visionary, Manager, and Specialist.

Research tells us that for each Stage of Growth, there is an ideal allocation of energy between these three faces. Said another way, at each Stage of Growth, the organization needs the leader to spend different portions of time wearing the Visionary Face, the Manager Face, and the Specialist Face. The Visionary Face The Visionary Face understands the importance of providing a compelling vision for the organization. When leaders put on the Visionary Face, they are guiding the organization toward a vision of the future. This begins with spending time in critical thinking to intentionally architect the business. The resulting business design then informs the vision of the company—a vision the leader must spend time clearly communicating to the organization. By helping the staff see how the daily work contributes to the bigger picture, the leader ensures the organization will generate the momentum needed to make the vision a reality. In early Stages, the leader communicates the vision directly with the staff. In later Stages, the leader must impart the vision to the Leadership and Management Teams, who are responsible for connecting the staff’s daily work to the long-term vision. In general, the larger a company gets, the greater proportion of time needs to be spent wearing the Visionary Face. In these later

Stages, the leader is no longer doing the work but leading the team with a vision that is connected to the organization’s activities. The Manager Face The Manager Face understands the importance of managing the people and the work. When leaders wear the Manager Face, they are involved in the supervision of the work or the people overseeing the work. The Manager Face includes time and energy spent coaching individuals toward greater levels of effectiveness. In early Stages—with few people and less organizational complexity—this face requires less of a leader’s time. As the organization grows, the leader needs to spend considerable time wearing the Manager Face. The allocation of time to the Manager Face is especially important during Stages 3 through 6 as the leader expends energy in growing the Management Team and eventually a Leadership Team. The Specialist Face The Specialist Face understands the value of being actively involved in the work of the company. When leaders wear the Specialist Face, they are creating products and delivering services to customers. They apply their personal expertise in development of the company’s offerings to the market or play an important part in business development. The Specialist Face also encompasses the time spent formalizing, improving, and refining the processes and systems that facilitate the company’s work. In early Stages, leaders focus a great deal of time on wearing the Specialist face—they are contributing significantly to the overall output of the organization. As the organization grows, the leader spends less and less time wearing the Specialist Face as newer team members take on that role. Yet, in every Stage, it is important that the leader maintains some time wearing the Specialist Face to benefit the organization from his or her expertise and stay in touch with the day-to-day realities of the organization. Examples of the Three Faces The Restaurant – First, let’s see how the Three Faces look for the leader of a restaurant. She wears the Visionary Face when she inspires the team to achieve extraordinary customer service by painting a clear picture of what true hospitality looks like. She has clearly set the vision for the organization and communicates it regularly.

That same leader is wearing the Manager Face when she is training the front-of-house staff on how to greet guests, take customer orders, and deliver plated dishes. Here, she’s not doing the work, but is training, directing, and leveraging this work to others in her organization. Finally, this restaurant leader is wearing the Specialist Face when she is the head chef in the kitchen on a Friday night, preparing dishes and running the kitchen. As the restaurant grows, the proportion of time this leader spends wearing each of these faces should change to be in alignment with the ideals for the restaurant’s Stage of Growth. The Manufacturing Company – Next, we’ll consider the CEO of a manufacturing company. When he sets the company on a path of continuous improvement, the CEO is wearing the Visionary Face. This is a vision he ties to the day-to-day work of every level in the organization. Wearing the Manager Face, the CEO interacts daily with his direct reports about the projects in each of their departments to ensure they have sufficient direction and resources to meet agreedupon goals. The CEO wears the Specialist Face when he rolls up his sleeves and gets involved in fixing the malfunctioning equipment on the shop floor to ensure they stay on schedule with customer orders. As with the example of the restaurant leader, the CEO can expect to wear the faces differently over time as his company grows. For many leaders, misaligned allocation of time is caused by a tendency to emphasize the faces they are most comfortable wearing. When a leader aligns their energy to the ideal Three Faces of a Leader allocation, their organization is better positioned for growth.

Three Faces of a Leader in a Stage 5 Company In Stage 5, the leader ideally spends 30 percent of their time and energy wearing the Visionary Face, 60 percent wearing the Manager Face, and 10 percent wearing the Specialist Face.

Stage 5 is characterized by a strong management team that is the organization’s driving force. It also marks the return of a significant focus on the Visionary Face. With a strong management team in place, the leader is now tasked with presenting a clear, compelling vision that engages these managers, so they can in turn guide the staff with a clear vision and common language. In Stage 5, the leader is responsible for painting the picture of the future but should be empowering the management team to get the organization to that destination. The leader is still spending the majority of his or her time wearing the Manager Face. As in Stage 4, the leader is no longer managing the staff and the work, but rather managing the managers. One specific priority in this Stage is integrating the strong, siloed departments that were created in Stage 4. A united management team in Stage 5 is well-positioned to grow into a strong leadership team in Stages 6 and 7. Amidst these priorities, the leader must still find time to be involved in the operations of the business. Many businesses still have work left to do from Stage 4 in implementing and advancing the organization’s processes and systems. It is critical that these foundational components of the business leverage the expertise of the leader. While the Three Faces allocation in Stage 5 is similar to Stage 4, the biggest change is with the Visionary Face, which increases from 10% to 30%. The most common misalignments come from this change. Leaders can find they lack the confidence to provide a compelling vision for this large of an organization. They were fine with setting the vision for 20 or 40 people, but now the organization

can have 70 to 90 people. Many leaders instead turn their energy to the Specialist or Manager Face. Over time, this leads to a stale vision and stagnant strategies, as the energy that should be directed to working on the business is absent. The 30% allocation of time to the Visionary Face is crucial in setting up the organization to advance into Stage 6 and beyond. Three Faces of a Leader Misalignment The CEO of an office supply company is the primary source of new business. He spends much of his time pursuing leads, closing on big clients, and interfacing on important projects. As his company enters Stage 5, he stays focused on sales to continue to bring in new business. He’s pursuing large commercial clients in particular, which is a new direction for the company, and he’s excited about the potential increase in revenue. The company doesn’t have a well-developed leadership team. There are managers, but despite the increase in overall employees, no director-level or executive positions have been filled. As a result, most of the managers are overwhelmed by the combination of a high volume of work and a lack of direction from the CEO. Being a salesheavy company, there is a Senior Sales Manager who oversees two Sales Managers and is successful at both bringing in work and providing direction and guidance to the sales team. The Senior Sales Manager is growing increasingly frustrated, however. She has no room for advancement due to the lack of organizational structure, and her ability to earn commission is severely limited by the CEO’s heavy involvement in sales. Just as the CEO launches his commercial client campaign, the Senior Sales Manager resigns, stating that she’s leaving to join a competitor. Not only will she get the title she deserves (director as opposed to manager), but she’ll also have more opportunity to earn commission. After she leaves, it becomes readily apparent that she has left a big gap to fill. The sales team feels completely disconnected from the CEO without her to serve as a bridge, and chaos soon follows, with more people leaving and the ones who remain unsure about their roles. The CEO is heavily over-weighted in wearing the Specialist Face, leaving the Manager and Visionary face to lack needed attention. By failing to invest time into his top talent, he has lost the opportunity to delegate responsibility. As a result, he can’t grow the company in the way that he knows best—through sales—and doesn’t have people in place who are equipped to take on that responsibility.

He has also failed to cast a larger vision for the company, which results in a loss of enthusiasm and cohesion from the staff. Three Faces of a Leader Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: Which of the Three Faces do you naturally wear most often? How does that align with the needs of a Stage 5 business? Are you investing in your management team to prepare them for growing the business into Stage 6, and for them to grow into a leadership team? Tip: Talk to your team. ➢ If you’re not sure which of the Three Faces you wear most often, ask your team. Have individual conversations with your direct reports to find out their perspective on the amount of energy you are spending on each of the faces, and how misalignment with the ideal allocation is impacting them.

Non-Negotiable Rules Overview The Non-Negotiable Rules are a powerful dimension within the Stages of Growth. They define the laws that a business must follow in order to be successful. The fact is that every natural system, whether it is a forest or a commercial business, succeeds by aligning itself to fundamental natural laws that establish order and balance. The Non-Negotiable Rules cover six foundational areas of a business: Business Development Business Model & Plan Finance Leadership Operations Workplace Community The rules are spread across these six areas because a business needs to be growing proportionally across them. Often, a business will focus more energy on some of these areas, causing an unbalanced ecosystem. Eventually, the rules ignored create pockets of weakness that can cause the business to lose momentum or retreat. Unlike the other dimensions, the Non-Negotiable Rules dimension exhibits a cumulative effect. This means that your organization needs to pay attention to not only rules for your current Stage, but also prior Stage rules. In a sense, Non-Negotiable Rules serve as graduation requirements to successfully move from one Stage to the next. To sustain growth, an organization needs to be at least 80% complete with the rules that are relevant to your current Stage. Now, this doesn’t mean that it is impossible for an organization to grow past a Stage if the necessary rules haven’t been completed. Rather, if you don’t complete rules before moving on to the next stage, they stick around to haunt you. They weigh on the organization, creating a stronger and stronger headwind for the company. After all, they are “non-negotiable.” Adhere to the rules that are active for your Stage—which includes the current Stage’s rules and prior Stage rules that have not been superseded—or pay the price in the form of low productivity,

poor financial performance, and the possible demise of the organization. There are two ways to meet the guideline of 80% completion. The first is to complete 80% or more of the rule. For example, a rule in Stage 2 is that the leader must “develop three supervisors to be responsible, accountable, and proactive.” This can be evaluated as to whether the leader has achieved at least 80% of what this rule requires. The second way is to evaluate by frequency. For example, another Stage 2 rule is to communicate all directions in writing. The progress on this rule can be evaluated by frequency—is the leader communicating directions to the team in writing 80% or more of the time? The Non-Negotiable Rules are like gravity—they exist whether or not you acknowledge them. Failure to address these rules will negatively impact your business. Being aware of the rules required in your Stage of Growth and taking action to address them is necessary to sustain growth. For many organizations that stall or retreat from their heights of success, the loss of forward momentum can be traced directly to the failure to take care of these graduation requirements. This dimension, as mentioned earlier, is unique in that the rules accumulate across Stages. One implication of this is that organizations that are caught up on the rules for the current Stage can proactively begin to work on future Stage rules. Getting ahead of the game on Non-Negotiable Rules allows organizations to transition more gracefully into the next Stage.

The Non-Negotiable Rules at a Stage 5 Company The Non-Negotiable Rules that are relevant for Stage 5 are organized by the six areas of business. Remember, an organization should be at least 80% complete with the rules to be prepared to graduate to Stage 6. Business Development Ensure strong managers lead Marketing, Sales, and Customer Service and are part of the Management Team. Encourage collaboration between Business Development functions through a shared process.

In the area of Business Development, a Stage 5 business should have identified Brand Values that define the promise to the market. These, in addition to Customer Segments, guide Business Development strategy, and inform the structures in this area of the organization. In Stage 5, managers should be leading the Marketing, Sales, and Customer Service functions. Collaboration between these functions should be encouraged with a shared process that defines how a lead converts into a long-term customer. When designing the shared Business Development process, be sure to concentrate on the handoff points to establish where one function ends, and another begins. Business Model & Plan Involve Leadership Team in revamping the company’s Business Model. Leadership and Management Team use the 1-Year Operational Plan to conduct interdepartmental planning quarterly. In the area of Business Model and Plan, a Stage 5 organization should be reviewing margins every quarter by Revenue Groups and Customer Segments. The organization should have an established 3Year Strategic Plan and 1-Year Operational Plan in place. In Stage 5, the leadership team should be involved in revamping the company’s Business Model. Additionally, the Leadership and Management Teams should conduct quarterly interdepartmental planning with the 1-Year Operational Plan. This ensures the leadership of the organization is involved in operational planning. A company’s Business Model is never complete; it requires constant energy, critical thinking, and revision. In Stage 5, it is time for the Leadership Team to be involved in revamping the Business Model and overseeing quarterly interdepartmental reviews of the Operational Plan. Finance Have departments come together to establish a fully integrated annual budget. Revitalize KPIs throughout the organization. In the area of Finance, a Stage 5 organization should have completed prior rules to make sure every employee contributes to a

KPI and knows how the company makes and keeps money. A Stage 5 financial system should be in place—this is a structure that supports the organization’s financial data and reporting until the organization grows to 95 employees. As the organization grows a strong Management Team, the department heads should develop and account for an annual department budget. In Stage 5, the individual department budgets are integrated into an annual company budget. This ensures that departments function interdependently, rather than as silos. Additionally, KPIs should be revitalized to reflect the growth that has been occurring in the organization. Stage 5 is the Integration Stage, where independent departments begin to operate as an integrated whole. Part of this occurs with an integration of department budgets. Leadership Integrate key contributors of the Management Team into an interdependent, execution-focused Leadership Team. In the area of Leadership, a Stage 5 organization continues expending energy on the development of a strong Management Team. This team should have been hired or trained up in earlier stages. An important attribute of professional managers is the ability to provide clear and consistent communication to all employees. In Stage 5, top performers from the Management Team start to form an interdependent, execution-focused Leadership Team. Distinguishing between the Leadership and Management Team is valuable once the candidates have been identified. The Leadership Team will be groomed over subsequent Stages to eventually run the day-to-day operations of the company. Operations Secure a plan to keep the company production capacity utilization between 70-80% to maintain profitability. Encourage cross-functional teams to identify improvements to Master Processes. In the area of Operations, the Organizational Structure should have been revamped and all employees should understand their positions and roles. Master Processes need to be designed to be effective (trainable, repeatable, and scalable), and implemented by the Management Team. To support these efforts, 5-10% of gross

revenue should be allocated to identify, acquire, and implement new processes and systems. The organization should also ensure Operations is organized around the company’s three Revenue Groups. In Stage 5, the organization needs to secure a plan to keep company production capacity utilization between 70 and 80 percent, which maintains profitability. Additionally, cross-functional teams should be encouraged to identify improvements to Master Processes. Companies that failed to implement scalable processes and systems in Stage 4 will find themselves behind in Stage 5, with the results of lower profitability and unnecessary organizational trauma. Workplace Community Make sure a common Project Management process is used throughout the organization. Allocate up to 3% of gross revenue to invest in employee development. Finally, Workplace Community in Stage 5 relies on Core Values that were established in earlier stages. These Core Values should be incorporated in a company-wide program that expects, supports, and rewards the demonstration of these values. An onboarding program that immerses new hires into company culture and processes should be established. To keep the staff engaged as the company grows, the organization must ensure all supervisory positions are regularly conducting One-to-One Meetings with their direct reports. This is an important structure from the CEO all the way down to supervisors. In Stage 5, a common project management process needs to be used throughout the organization to encourage collaboration and create consistency. A project management process that is common across the organization is important to enable the increasing number of initiatives that span multiple departments. With the larger number of employees, three percent of gross revenue should be invested in their development. Non-Negotiable Rules Misalignment A software company that has developed an AI-based system for optimizing trucking routes for delivery companies has grown rapidly. With 82 employees, the CEO and leadership team is increasingly confident in the product and its ability to provide tremendous cost-savings and revenue optimization to its customers. As awareness of the software grows in the marketplace and its return

on investment proves out, the sales department finds that their jobs are getting easier. They are getting more conversations and closing deals at a faster pace than ever before. While sales are strong, retention begins to wane. A customer survey reveals that many clients are dissatisfied with the level of service they receive after purchasing the software. The CEO applies pressure to the sales team to respond to customers after a deal has closed, but finds they are reluctant to comply. Commission is where they make the majority of their income, and there is no commission to be earned once a client has been signed. As the number of clients increases, the issue quickly escalates and threatens the reputation of the company. The company has failed to clearly delineate the differences between Marketing, Sales, and Customer Service, all three of which make up Business Development. When the company was smaller, and fewer leads were coming in, the Sales team was more willing and able to respond to customer questions and resolve any issues with the product. Now that there is a higher level of interest, they need more time to sort through leads, and so are no longer motivated to also handle customer inquiries. The CEO needs to establish a Customer Service team with compensation that aligns with their responsibilities and value to the company. (The Customer Service role within Business Development is to keep revenue coming.) A formal Marketing team should be made responsible for bringing in quality leads. He also needs to establish definitive handoff points so that everyone is crystal clear as to when a prospect moves from Marketing to Sales to Customer Service, ensuring that no one is lost in the transition points. Non-Negotiable Rules Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: Are you at least 80% complete with all Stage 5 NonNegotiable Rules? Are there any rules that you’ve completely neglected? What can you do in the next 3-6 months to make progress in all six foundational areas of business? Do you think your business is being held back because you missed some of the rules of a previous Stage?

Tip: Don’t worry about perfecting any one rule at the expense of making progress on other rules. ➢ Keep in mind that you need to be at least 80% proficient in all six areas before moving to Stage 6 to ensure a smooth transition and avoid the headwinds created by incomplete rules.

Classic Challenges Overview Classic Challenges are the top five challenges businesses typically face in each Stage of Growth. The research has identified 24 unique Classic Challenges, some of which appear during more than one Stage.

Awareness of the Classic Challenges doesn’t mean that the business can avoid them altogether; many are an inevitable factor of growth. There are several advantages, however, to knowing what they are and when to expect them. Advantages to Being Aware of the Classic Challenges 1. 2. 3. 4.

When the challenges are more quickly recognizable, they can be dealt with more efficiently. A common language and understanding of the challenges facilitate alignment within the leadership and management teams. Future challenges can be prepared for in advance rather than reacted to in the moment. It’s better to face an enemy you know than one you don’t. Simply placing a name on the challenge goes a long way toward knowing the enemy.

Unlike other dimensions, the Classic Challenges dimension does not reflect an ideal but rather lists the challenges most frequently experienced during a specific Stage. As such, the organization is not

expected to align itself with the challenges listed for a Stage but can reasonably expect to face them. Classic Challenges and the Elements The Classic Challenges often represent surface symptoms of deeper, underlying issues. Recognizing the challenges is an important first step to determining which of the Elements need to be infused into an organization to facilitate growth. For example, say your team is struggling with employee retention, which they identify as the Classic Challenge of Employee Turnover. The Stages of Growth methodology links this challenge to the underlying Elements that most commonly resolve it, which are: clear Brand & Core Values, intentional Organizational Structure, a consistent One-to-One Process, and a Strong Management Team. With the link between Classic Challenges and Elements, the team can take specific actions to resolve the challenge in such a way that addresses the underlying issue, achieving greater long-term health for the organization.

Classic Challenges in a Stage 5 Business In Stage 5, businesses are typically struggling with these five Classic Challenges: Cost of Lost Expertise Difficulty Forecasting Problems Inadequate Sales Poor Staff Training Weak Business Model In this section, we’ll look at each of these challenges in more detail. Cost of Lost Expertise An organization that suffers the cost of lost expertise typically shows these symptoms: the company scrambles when there’s turnover, “hit by the bus” syndrome runs rampant, or the lack of organizational knowledge is impacting operational quality. A Stage 5 business has reached a level of complexity where key individuals may possess important skills and knowledge about the

operations of the company. Losing these individuals can have a significant impact to the running of the business if their knowledge is not captured in written processes and imparted throughout the team via cross-training. To help mitigate the impact of lost expertise, a Stage 5 business should look at these key business elements: Identifying and documenting Master Processes so that the processes are well understood by the team and not dependent on any individual. Establishing Organizational Structure that organizes the work and responsibilities independently of the individual people. Difficulty Forecasting Problems An organization that has difficulty forecasting problems typically shows these symptoms: it is blindsided by issues, problems arise when volume is added to existing processes, or self-inflicted chaos is common. In Stage 5, the complexity of operations has grown to the level where the organization must be able to begin anticipating problems that will arise as volume increases. To help mitigate the difficulty in forecasting problems, a Stage 5 business should look at these key business elements: Understanding a Business Growth Framework helps the management team anticipate changes to the rules of growth before they occur, allowing for proactive planning. Establishing Key Performance Indicators for the major functions of the company helps the organization measure and evaluate problems that may be occurring or likely will occur. Developing a Strong Management Team that can anticipate and oversee the changes needed for their departments to expand. Inadequate Sales An organization that is struggling with inadequate sales typically shows these symptoms:

revenue is flat or below projections, the sales team is ineffective, too few new leads, or there is a weak sales pipeline. In Stage 5, generating sales that covers growing organizational expenses is a top focus. The company can no longer expect to keep growing through word-of-mouth and must establish Business Development strategies and structures that are repeatable and can scale with the organization. To help mitigate the impact inadequate sales has on the organization, a Stage 5 business should look at these key business elements: Differentiating the company’s offerings by establishing a clear promise to the market through Brand & Core Values. Infusing Business Development Structure to create consistent, repeatable, and growing revenue. Critically thinking about the company’s Business Model to provide clarity around what the company does, for whom, and why. This clarity will improve the effectiveness of Business Development efforts. Establishing Key Performance Indicators for the three business development functions to measure the work and evaluate the outcomes of initiatives. Poor Staff Training An organization that struggles with poor staff training typically shows these symptoms: persistent quality issues, employees who are stagnant and not developing, or a lack of cross-training. A Stage 5 organization has significantly more people than it did just a couple of Stages earlier. To be effective, the staff needs to be consistently and properly trained. To help mitigate poor staff training, a Stage 5 business should look at these key business elements: Establishing a promise to the team through Brand & Core Values that sets clear expectations for staff and management. Identifying the Master Processes related to staff training and then implementing processes and systems to support

the team. Employing Meeting Structures for training and onboarding team members. Establishing Organizational Structure that provides clear roles and responsibilities, so employees know what is expected in their positions. Developing a Strong Management Team that demonstrates the ability to provide effective training for their departments. Weak Business Model An organization that struggles with a weak business model typically shows these symptoms: it’s unclear who the target customer is, low profitability, or disorganized Operations as a result of unclear Revenue Groups. The leader of a Stage 5 business needs to reassess the company’s Business Model to ensure it reflects market realities. Collaborating on this refresh with the Leadership and Management Teams results in a stronger business model that has greater buy-in from the organization. To help mitigate a weak Business Model, a Stage 5 business should look at these key business elements: Involving the Leadership and Management Teams in critically thinking about the company’s Business Model will help create a more resilient organization. Using the Business Model review as an opportunity to develop a Strong Management Team that leads with a shared vision and common language. Connecting the classic challenges and their surface symptoms to a root cause helps a business leader be less reactive and instead be proactive at addressing the source of the challenges. As a company looks at the challenges that are impacting their organization, it’s important to understand that a single business element can help mitigate several challenges. Key Performance Indicators, for example, can mitigate two of the five classic challenges: Difficulty Forecasting Problems and Inadequate Sales.

Unlike other dimensions of the Stages of Growth, the Classic Challenges do not represent an ideal, but rather the challenges that are most typical for a company of that size. Businesses that have stayed at the same Stage for many years often have resolved the underlying causes of that Stage’s typical challenges. Therefore, they may experience challenges that are classically seen in later Stages. Other organizations find that their most impactful challenges are primarily from earlier Stages. This is indicative of an organization that has functions that have not kept pace as the organization grows overall. Classic Challenges Example A technology consulting firm that specializes in data analytics has grown slowly but surely over the past three decades. The two original founders of the company, who serve as the most senior data scientists, are nearing retirement age. One person has had to take a leave of absence due to medical issues, and the other is considering a fractional role as a transition to retirement. As the company drafts job descriptions and considers internal junior analysts for promotion, the CEO realizes that it’s not entirely clear what the roles and responsibilities are for the senior members. Since they were involved at the very beginning, they have deep skillsets and responsibilities that cross the usual departmental boundaries; the positions are in fact custom-made for each person. The person they hired to fill in for the co-founder on medical leave came highly qualified on paper but has been disappointing so far as an employee. The CEO foresees a rocky transition when the founders leave but assumes it’s just an unavoidable issue that goes with the territory when long-term specialists retire. The classic challenges facing this company are Cost of Lost Expertise and Poor Staff Training. While there’s no way for the CEO to avoid the loss of the senior team members, there is a lot he can do to mitigate the pain of their departure. If he were to focus on Master Processes (i.e., knowing what needs to happen, by whom, and when), he could take advantage of their presence and transfer some of their invaluable knowledge to paper, adapted in such a way as to be useful for all future employees. In the same way, Master Processes would also bring relief to the issue of Poor Staff Training. New hires would have a clear and better understanding of how the work is to be performed, allowing new team members to assimilate more quickly and become productive faster. Classic Challenges Application

The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: Are you facing any of the Classic Challenges of a Stage 5 business? If you were to implement it today, which of the 11 Elements would make the biggest impact on your organization? (For a full list of the 11 Elements, see Chapter 9.) Looking ahead, how can you prepare for the challenges that come with a Stage 6 business? Tip: Don’t be afraid that the challenges you are facing today as a business leader will simply multiply as your business grows. ➢

The Classic Challenges change according to the Stage of your business. Take heart in the fact that the ones you overcome today will not be twice as difficult in the next Stage.

The Elements of an Exceptional Business Overview Elements are the principles, methods, and tools that form key structures within an organization. Many organizations are either missing an Element or it’s not strong enough to support the organization’s current Stage or desired growth. As a result, these organizations experience a host of challenges and surface symptoms. Surprisingly, though, the connection between the surface symptoms and the missing element is not always obvious. Infusing Elements into a business’ ecosystem is the essence of ReWilding. Similar to the rewilding process in nature, whereby a missing element is reintroduced in order to restore balance to an ecosystem, Organizational ReWilding finds the missing elements in a business and infuses them. When an Element is infused into the organization, it sets off a ripple effect that begins to reduce or eliminate the challenges for which the Element addresses the root cause. The result is an organization that is more resilient, capable of navigating growth, and more exceptional.

The Elements are organized into four categories: Culture, Infrastructure, Leadership, and Strategy. Culture includes Elements that impact an organization’s values, behaviors, and relationships. Culture Elements: Brand & Core Values One-to-One Process Infrastructure includes Elements that create foundational structures throughout the organization.

enduring,

Infrastructure Elements: Business Development Structure Key Performance Indicators Master Processes Meeting Structure Organizational Structure Leadership includes Elements that focus on developing a cohesive Leadership and Management Team and creating an organization less dependent on the CEO. Leadership Elements: Interdepartmental Planning Strong Management Team Strategy includes Elements that facilitate the necessary critical thinking to consciously design a resilient organization and provide shared strategic language. Strategy Elements: Business Growth Framework Business Model Each of the elements supports a critical function of a growing organization. Brand & Core Values are about keeping promises to the market and the team. When an organization defines these sets of values, it’s positioned to consistently deliver on its promises.

Business Development Structure is how an organization generates consistent and growing revenue. The starting point is understanding that Business Development encompasses the three revenue generating functions—marketing (generates leads), sales (turns leads into revenue), and customer service (keeps the revenue coming). A Business Growth Framework unites a company’s management team with a comprehensive business growth methodology. Instead of a CEO carrying the burden of growth alone, the common framework allows the entire management team to work with the CEO on important business strategies and initiatives. A Business Model is the architecture of a resilient, profitable business. It includes the fundamental strategic areas of a business: value, customer, revenue/profit, and structure. It also provides a framework to periodically assess the business’s design and adjust to new realities as the business grows. A Strong Management Team is how an organization leads with a shared vision and common language. All too often, organizational growth is stunted because the team doesn’t know where they are headed. Strong leadership can unify team members and accelerate growth. Interdepartmental Planning is how an organization focuses resources beyond department silos. It consists of a structured method of categorizing priorities across all departments so that the organization is working together towards common goals, not competing internally for resources. Key Performance Indicators are how an organization measures and evaluates work outcomes. Identifying and tracking the right metrics is the difference between an organization knowing exactly where they are at and flying blind. Master Processes are the key processes and systems that make an organization more efficient and effective. Rather than relying on specific individuals to run, the organization creates processes that enhance quality by reducing variance. Meeting Structure achieves greater effectiveness in an organization’s meetings by identifying the different types of meetings that are held and applying the appropriate degree of structure. A One-to-One Process provides a regular feedback loop between a supervisor and employee that promotes proactive inquiry, creates

personal accountability, and builds a bond of trust. It is one of the foundational structures needed to create a high functioning company. Organizational Structure is how an organization builds resilience by employing a simple principle: organize the work before you organize the people doing the work. The lack of structure within a business is a major contributor to organizational chaos, disengaged employees, high turnover, and a culture that is resistant to change. The Elements and the Stages of Growth The importance and impact of each Element varies based on the Stage of Growth. Some Elements are important immediately, beginning in Stage 1, while others don’t become priorities until the organization reaches higher levels of complexity.

This image shows the Elements across the seven Stages of Growth. The importance of the Elements is depicted by dots and checkmarks. Green dots highlight Elements that are a Stage’s highest priority to get in place and be adopted by the organization. Yellow dots indicate the Element should be considered, but it is not the top priority at that Stage. The Red dot denotes Elements that are not necessary at a particular Stage because the organizational complexity is not enough to benefit from its implementation. Finally, a checkmark identifies Elements that should already be in place and fully integrated into the organization.

The Elements in a Stage 5 Business

In Stage 5 there are five elements with a checkmark, indicating that these Elements should have already been adopted by the organization. Those elements include Brand & Core Values, One-toOne Process, Key Performance Indicators, Organizational Structure, and Business Growth Framework. If the company has not fully implemented these Elements, they become the highest priority (even more so than the Elements with green dots). There are six Elements with green dots, indicating top priority. These are Business Development Structure, Master Processes, Meeting Structure, Interdepartmental Planning, Strong Management Team, and Business Model. Missing Elements Example A wholesale distributor of auto parts relies heavily on accurate inventory to fulfill orders. The company primarily services dealerships with same-day deliveries and has established several new relationships over the past year, increasing their volume and requiring the addition of several new employees. The rapid growth caused some initial disruption, but after several weeks most of the issues have been resolved. Problems related to inventory still persist, however. Parts that appear to be in stock are not actually on the

shelves, and parts that show up in the system as being out of stock are available. The CEO and Leadership Team spend hours trying to pinpoint the source of the problem. The company has used the same inventory tracking software all along so that doesn’t appear to be the issue. New employees are being trained on how to use the system to process sales and manage inventory. Orders that arrive to the warehouse appear to be processed correctly. The team is on the brink of giving up when they discover an anomaly that leads to the answer. It turns out that some of the orders are inadvertently being entered twice, while others aren’t being tracked at all. The mistakes are being made due to a difference in how parts are categorized. Once identified, they are able to address the problem and move on. Master Processes refers to those processes that are critical to the core functions of a business. By Stage 5, Master Processes should be established for every major process that the company uses. In this case, the process of tracking inventory, which involves multiple steps, was not documented anywhere. While the effects of a broken process were obvious, the causes were not. Taking the time to create, document, test, and refine Master Processes would not only bring clarity to the inventory issues faced by this company but would also achieve significant time savings in the long run. The Elements Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: How well defined and developed are Master Processes in your organization? Have you captured them in writing, or are they dependent on individual knowledge? Meeting Structure is a high priority in Stage 5. Does your organization have clear structure and purpose for its meetings? Are meetings generally effective? Is your organization missing any Elements that should already be established by Stage 5? Tip: Your challenges help to identify the Elements missing in your organization. ➢

The Classic Challenges are symptoms that point to underlying issues related to the Elements. Start with the

symptoms and work backwards to identify the Elements that are missing (for more information on Classic Challenges, see Chapter 8).

Transition Zones Overview Transition zones are periods of change a business goes through as it exits one Stage of Growth and enters the next. Transition Zones happen to every business as they move from one Stage into another. During this period of change, businesses commonly experience a period of chaos where things feel disconcerting and overwhelming. Transition Zone are like rough waters. These periods can be especially perplexing because the organization is often experiencing positive advancement and growth right up to the point the transition begins. Flood Zones and Wind Tunnels There are two types of Transition Zones: Flood Zones and Wind Tunnels. In a Flood Zone the organization is flooded by work and the complexity suddenly becomes overwhelming. Often, the reaction of the leader is to throw more people at the problem. That is rarely the right answer, however, because adding more people just means adding more complexity. In a Wind Tunnel, the organization finds that what has worked up to this point—processes, methods, tools, structures, etc.—no longer works. Those past approaches need to be blown out and replaced with new approaches that fit the new Stage. This can be unsettling since it can require significant change for the organization. Think of a Wind Tunnel as a period of “Out with the old, in with the new.” Transition Zones often feel chaotic to an organization because it is a time of transformation, or growth, from one Stage to another. Knowing to expect them can help an organization get through without panicking or retreating. Transition Zones across the Stages of Growth

Each Transition Zone starts at the end of one Stage and continues through the beginning of the next. For example, in Stage 1, which is 1-10 employees, the organization will enter a Flood Zone around the time they reach eight employees. It will remain in a Flood Zone as the company transitions into Stage 2 until they reach around 12 employees. At around the 13th employee, the business will have completed the transition and will enter a Functional Zone. A Functional Zone is the period where a business is solidly within a Stage and can have its priorities dictated by the Gates of Focus. For example, in Stage 2 the Functional Zone is from 13 to 17 employees, which is the range of employees between the incoming and outgoing transitions. Leadership in a Transition Zone When in a Transition Zone, the organization needs the leader to emphasize Structure, Clarity, and Focus. These three things will help maintain the confidence of the organization through the inevitable turbulent times, allowing it to navigate the chaos as gracefully as possible. Picture a group white water rafting: when they encounter rapids, the rafting guide barks out warnings and gives clear directions on what everyone needs to do, all the way until calm waters are once again reached. A leader can provide Structure by ensuring the team understands their role, setting clear expectations, and demonstrating how to effectively accomplish the work. One way a leader can provide Clarity is to forewarn the organization of upcoming Transition Zones. Armed with this knowledge, the rough waters experienced by the organization will

not cause so much anxiety; the Transition Zone won’t feel as unexpected or shocking as it otherwise would. An example of how a leader can provide Focus is by narrowing responsibilities, reducing the number of new initiatives undertaken, and painting a clear picture of what success looks like for each team member.

Transition Zones in a Stage 5 Company As a Stage 5 company grows past 91 employees, they can expect to enter a Flood Zone. This period of feeling overwhelmed will last until they reach 96 employees (Stage 6). With more work than they can handle, it’s natural for business leaders to quickly hire additional people in order to manage the extra work. As the Stages of Growth methodology teaches, however, people are the primary driver of complexity. Adding a significant number of new staff to handle the flood of work will ultimately create more problems. This is not to say that it’s a mistake to hire more people as the volume of business increases. But leaders should be aware that they are entering a new Stage where systems and processes are beginning to be more important and new requirements will be placed on them as the leader. Employees alone will not solve the growth problem; they will simply change the nature of it. Transition Zones Example The new CEO of a fine art gallery switches the business from being a storefront to an online retailer. With a high-tech background, she wasn’t afraid of the technical challenges that such a move would bring, and only a few months after the transition, growth is skyrocketing. The gamble appears to be paying off. Their audience reach is now global, which means not only an increase in orders but also the need for new methods and procedures for accepting payment. Another issue that is becoming more challenging is the ability to mark things as sold at the right time, especially when there is competition across time zones. Seeing the problems and feeling the stress of the increase in volume, the CEO reasons that new employees are needed in order to address them. She hires more staff, bringing the total number of employees to 94. The additional help doesn’t seem to bring relief, however. Instead, the staff are burdened with training, on top of their other responsibilities, and rather than a dip in problems the company experiences an increase in chaos. The CEO decides that the company needs to stay below 90 employees in order to function at

its best and begins turning away new business in order to stay at that level. The CEO made a smart move by moving the gallery online, and she’s only just beginning to see the results. Although additional employees would eventually help to provide relief to the over-worked staff, bringing them on at this point is counterproductive. Her company is on the brink of moving into a new Stage, and the best thing she could do now is gather her core team together and lean on their expertise in order to assess and revise their current systems and processes. A few weeks spent working on the business at this critical juncture will do more to ease stress and prepare for future growth than hiring more people. Transition Zones Application The following questions will help you apply the information from this chapter to your company. Download the Stage 5 Workbook to record your answers. Key Questions: How would dealing with a Flood Zone challenge you personally as a leader? What initiatives can be delayed until after you exit the Transition Zone so the team can maintain focus? What are some concrete steps you can take today to help prepare for the next Transition Zone? Tip: Remember that the growth you experience during this time may feel overwhelming but there is no shortcut to building a solid team. ➢ If you are in a Transition Zone, post the words “Structure, Clarity, & Focus” in your office or write them on a white board as a reminder of what the team needs more of from you at this moment.

Conclusion Stage 5 is all about Integration. The focused work the professionalized managers did in their respective departments in Stage 4 can often create silos. Stage 5 is where you bring those units together into an integrated management team. Profit is a top priority to ensure that enough capital is generated to sustain a larger organization. The organization should exhibit twice as much confidence as caution in support of the focused change needed to install a Leadership Team and continue to pursue new opportunities. The leader needs to primarily guide through collaboration, inspire the team with a grand vision, and build loyalty through comradery. As with every Stage of Growth, there are Non-Negotiable Rules for the Stage 5 business to follow in six foundational areas (business development, business model and plan, finance, leadership, operations, and workplace community). Abiding by these rules can help the business avoid many of the Classic Challenges associated with a Stage 5 company. While there are 11 Elements to every exceptional business, a Stage 5 business should prioritize implementing Business Development Structure, Master Processes, Meeting Structure, Interdepartmental Planning, Strong Management Team, and Business Model. This assumes that Brand and Core Values, One-to-One Process, Key Performance Indicators, Organizational Structure, and Business Growth Framework have already been fully implemented. Lastly, a Stage 5 business can expect to a hit a transition zone as it reaches 91 employees. This Flood Zone is characterized by a failure of the existing systems, structures, and processes and a need to implement new ways of doing things. A leader who brings structure, clarity, and focus will help the organization navigate the transition zone and move into the calmer waters of the Functional Zone of a Stage 6 company. The Stages of Growth methodology serves as a roadmap for leaders of a Stage 5 company. Rather than react to every new change as it happens, leaders can proactively plan ahead and make adjustments based on the experiences of hundreds of other business owners who have dealt with many of the same challenges. Regardless of the industry, all Stage 5 companies share a great deal in common. Learning from one another is the most efficient and effective way to navigate growth.

Further Reading Burlingham, Bo: Small Giants Fischer, James: Navigating the Growth Curve Fritz, Robert: Corporate Tides Goleman, Daniel: Primal Leadership

About the ReWild Group Founded in 2017, the ReWild Group is based in Colorado at the foot of the Rocky Mountains. We are dedicated to furthering the research that was originally presented in the book, Navigating the Growth Curve (published in 2006). As we expand our network of Advisers, our goal is to deliver the benefits of this research into the hands of as many business owners and leaders as possible. Our Advisers are trained on delivering impactful engagements that bring the principles garnered from our research into practical, every-day solutions to common problems faced by businesses. We’re on a mission to multiply the number of exceptional businesses around the globe. We believe that work is a fundamental part of human existence. When a person is part of an exceptional workplace, they can apply their natural talents, grow as an individual, and develop new skills. This person returns to the home and society as the best version of themselves. As we grow exceptional businesses, the impact reverberates throughout our homes, our communities, and our nations. This is how we change the world. Join the movement. Whether you are a business adviser or a business owner, you’ll find resources to help you on your journey. www.ReWildGroup.com