How old is your organisation? I don’t mean ‘how long has it been in existence’, but ‘how old does it act?’ Strange question, maybe, but think about it and you will recognise the signs.
Does it lurch from excitement and joy to upset and crisis? Is it very high maintenance, needing all your time and attention? If you turn your back on it for a minute, does it get into trouble? It’s a toddler!
Or does it manage itself for increasing periods of time? You can go away for a few days without a disaster happening, and even get back to find the place in good order. It’s a young adult, learning responsibility even when you’re not there to watch it like a hawk.
Or maybe you now spend most of your time looking for new ideas, new funding, new acquisition opportunities, knowing that your company will barely notice your absence. It’s now a mature adult, and you know that it won’t go off the rails if you leave it to its own devices even for quite a long time.
This might seem like an odd way of looking at your organisation’s development, but this viewpoint gives some insights as to the style of leadership and management your organisation needs at any given stage.
The Toddler stage
This stage is when you can really indulge your inner control freak. This isn’t a problem for quite a few entrepreneurial owner-managers (it gets to be more of a problem later, so enjoy it while you still can).
At this stage, you genuinely do need to keep an eye on everything and get your sleeves rolled up and get stuck in. Things move very fast; you need to ship product or services out as fast as you can, and keep a tight rein on the money coming in.
Now is not the time to be easy-going or tolerant with your clients and suppliers – you need the money in on time, or the business won’t survive. And you don’t have the luxury of being able to hire enough people to cover all the business’s needs. It’s an exciting time, full of adrenalin, victories and celebration – but it’s all hands to the pump, including yours.
The Young Adult stage
This is a period when you need to trust that you have instilled the right values during the ‘growing up’ stage, and start to let people work out their own ways of doing things. Once you get used to it, this can be a relief – you don’t have to be the one who has all the answers. You can hire people who think differently from you – lot younger, or trained and educated in different ways. Given some freedom within a framework of your company values, they can potentially come up with better solutions than you.
The emphasis now is on consolidation – finding and sticking to structured ways of doing things, so that the business is less dependent on any one individual – including you. You are creating a sustainable entity which could survive and continue to be successful beyond your involvement.
There’s a balance to strike, though. One of the commonest mistakes business leaders make at this stage is to assume that the easiest way to provide the structure the business needs is to ‘buy in’ the systems, processes and expertise of much larger businesses.
The problem is that these systems and processes are highly engineered, usually very expensive, and need to be operated by highly trained specialists. Your young adult business not only doesn’t have the money to throw at these things, but just having emerged from the highly flexible and entrepreneurial first stage, you will feel they over-engineer and overload the business.
What you need is simple home-grown systems and processes – capturing best practice from the people already working in the business – and providing just enough structure to enable the business to run smoothly.
The Mature Adult stage
After a period of consolidating and building longer term sustainability, some organisations will find they are ready to move to a third stage.
Failing to grow beyond consolidation can mean that efficiency becomes more important than innovation, doing things by the book and following procedures become more important than your mission, and you are left behind as customers find more responsive suppliers.
The solution is a long-term vision with emphasis on growth and development, and a working culture in which staff exercise greater autonomy in making decisions and solving problems.
Whatever the motivation, the aim of this stage is high performance, and the key is shared ownership. The best large organisations are highly participative and collaborative, giving employees decision-making and problem-solving authority. Their focus is on serving the customer, and the organisation’s mission, rather than rules and policies, guides their day-to-day decision-making.
The best grown up organisations have a strong culture derived from a clear set of values modelled by their leaders, and developing people is a primary management task.
Learning from the life path
Many business owner-managers find it almost impossible to let the organisation ‘grow up’, sometimes because they feel more secure when they feel fully in control, but more often because they don’t know how to let go and allow their organisation to start to find its own way.
They lurch from micro-managing their staff, to handing over all control in the name of ‘delegation’, when an appropriate level of control at first is to provide firm boundaries, with a light level of structure and observation, until you are completely sure that people are fully competent.
Another block to moving through the stages is assuming that ‘consolidation’ means ‘corporate’. You may have moved out of a corporate organisation because you hoped starting your own business would provide you with freedom to do things your own way, and now you equate structure and process with burdensome bureaucracy.
But if you want to create a high-performance organisation you must go through the stage of implementing the processes that ensure stability as well.
It’s all a matter of choice. And it is a choice. Some small organisations remain in the exciting, warm and cohesive first stage for most if not all of their lives – from choice. And many of the more than 95% of all businesses in the EU which are SMEs will choose to remain as middle-sized (young adult) organisations for their entire lifespan.
The important thing is that you do make the choice, and don’t end up trapped at one stage or another because you think it’s the ‘right’ place to be, or because you lack the courage or skills to move on – or back – to a more fulfilling or more comfortable stage.