Business Growth — Stage 4 — Experienced Managers Need To Manage The Complexity
Professional is Stage 4 in The Stages of Growth methodology and follows on from the Delegation stage. Companies are in this stage as they grow from 35–57 employees.
In a Stage 4 company, the changes are exponential and more impactful than anything the organization has experienced so far. Delegation now gives way to addressing the change as the top priority and the focus must be on getting processes and infrastructure in place to manage this stage of growth.
The key objectives of Stage 4 include:
- Hiring or training up a professional management team.
- Creating strong, performance-driven departments that compete between each other.
- Keeping a pulse on the company’s health by establishing a KPI Flash Sheet.
- Establishing a shared project management process.
- Focus first on Process, then Profit, and finally People.
Don’t Just Throw People At The Problem
What is common when companies reach this stage, is that activity levels increase ten-fold and the leader’s natural solution is to throw extra people at the problem. When they do this the irony is that they create a more complexity which in turn is more difficult to manage. By throwing more people at the problem, they end up in Stage 5 too quickly, and find they haven’t put the necessary systems in place to create a sustainable business environment to handle the additional levels of complexity.
Hiring experienced or professional managers is one of the primary ways to address this problem. The best place to start, is to hire professional managers who been there, seen it and done it, in the Sales and Operational areas. These managers should bring the necessary experience to put systems in place needed to manage this stage of growth. If the decision is made to rather promote managers from within your organization, then it is critical to provide them with structured education and training to help them be effective managers. Learn more about the Exceptional Manager Program which empowers management teams with the mindset, skills, and tools necessary to produce high-functioning teams.
One of the main goals in this stage, is to build strong internal departments — so work on making them individual fiefdoms and create friendly competition between them. The entire company becomes stronger by strengthening the internal structure, and improving the operational efficiency, of individual departments. Having strong managers, to define and implement the smaller department structures, will be key to successfully navigating through this stage.
Some of the Non-Negotiable Rules of Stage 4 are:
- Hire or train professional-level managers in every department who are responsible, accountable, proactive, and committed, and who set in place solid department infrastructure and processes.
- Create strong, performance-driven departments that compete with each other.
- Set in place an advanced daily, weekly, and monthly KPI Flash Sheet.
- Make sure Business Development has an effective marketing campaign management system, a repeatable sales process, and a systematic customer care program.
- Allocate 5–10% of gross revenue to identification, acquisition, and implementation of new systems and processes.
The biggest mistake a leader of a Stage 4 company can make, is to think by not spending money on good talent and putting proper systems in place, they can save money.
In this Professional Stage, the leader must set aside their ego and invest the time and money, to either hire or train strong professional managers. For the company to be successful in future, it is imperative to have a strong management team in place to help manage the company through this stage of complexity. Failing to grow and invest in this critical layer of the company, will cause the company to stall or potentially even implode.
In Stage 4, the business requires a leader that empowers the team, values the employees as people, and who continually finds ways to improve. In Stage 4, the leader now spends 70% of their time as a Manager, 20% as a Specialist and only 10% as a Visionary.
Coaching still remains the primary leadership style, which is blended with Affiliative and Pace-setting as secondary and tertiary styles.
Understanding the health of the company becomes even more important for the leader as the complexity of the organization increases. Having proper financial statements is really important, but they only supply periodic information and do not have much detail about the operational side of things. So, having a KPI Flash Sheet in place is vital at this stage. This tool collects key indicators which tell the daily, weekly and monthly story of what is going on in the company. Not using KPIs at this stage, means the leader and their team are flying blind, which forces the leader to go back to a trial and error mindset, centralizing authority and not utilizing the competency of the experienced management staff they have in place.
A well-intentioned leader is not as effective as a well-informed leader. So, understanding that they need to start hiring people that know more about certain aspects of the business than they do, is possibly the most successful step a leader can take in this Stage to ensure the future success of the company.
Classic challenges that are common in this Stage are weak project management, difficulty diagnosing problems, not getting systems in place, staff turnover, not keeping the organization informed about company growth and poor change management.
Mastering the Professional stage then leads into the Integration stage, where the independent managers need to work together as a synergistic team.
Here are links to the articles published on the other Stages: