Category Archives: Peer Group

Scaling and Sustaining

If you haven’t thought deeply about scaling your company, you’re not alone. Out of more than 5.6 million companies in America with one or more employees on the payroll, only 1.7% scale to more than 100 employees, and .3% to 500 plus. Far fewer manage to sustain their size for long. Many cycle up and down the growth curve until the company finally dies.

This can make a small company feel fragile and for good reason. This census bureau statistic tells us that learning how to scale and sustain is probably on the top of each owner’s mind. But, how do you learn to do this?

We can start by facing the facts. Statistics show that some owners know how to scale, but most don’t. So what do some owners know that others don’t?

Cohesiveness is the first step in scaling.

According to Wikipedia, cohesion is when a group has a tendency to be in unity while working toward a goal or to satisfy the emotional needs of its members. A senior team can best achieve cohesion when they share a broadly understood future that meets the emotional needs of each member. When cohesion is absent, coercion is present. An ancient Proverb said this well, “Without a vision the people perish.”

A business unit leader recently shared his 360 review with his company peers. He scored a very low 65 on vision and strategy, which caught everyone’s interest. These are the evaluation question on his review:

  • Can clearly explain the reason your company is in business
  • Has the ability to anticipate the future needs of the company
  • Has the ability to set a clear course of direction
  • Can effectively translate vision into a realistic, achievable strategy
  • Has demonstrated a willingness to take reasonable risks

Our follow-up conversation revealed that the owners and senior team did not hold a common picture of the future. Without this, it would be nearly impossible for a business unit leader to improve his score substantially. Until the owners and senior team achieve cohesiveness, this business unit remains at risk. They also risk losing top performers who won’t hang around if they don’t know where you are going.

What would your score be for vision and strategy? Any score below 90 means you’re missing a great opportunity. Would you like to know? I’d love to know your thoughts.


Faith or Fear

Every choice we make contains either faith or fear and the outcome of every decision produces more. The power of choice, with all its creative, material, and spiritual implications, is the essence of the human experience.

When we choose the leadership role, we burden ourselves with the responsibility for managing the choices we make, especially in the eyes of our followers. This makes us think about the limited number of choices that fall within the domain of a business owner vs. a manager or executive. What are these limitations? How are these limits respected or violated?

I know an owner who recently violated the domain of the company president and chief operating officer by terminating a leader who reported to them, against their will. She chose to sponsor fear and erode trust. Without owning this mistake, she will find it hard to build trust and engagement again.

Followers don’t expect perfection but they do expect you to reveal the reason for your choices – if you don’t, you will lose their trust and engagement. Not sharing is a sure sign you have violated a boundary, an ethic, or a core value.

Choosing not to share is coming from a place of fear. When any leader violates the domain of another leader, without sound reason, fear floods the place that trust once filled.

With each choice, a leader is either building or depleting trust. A president or chief operating officer who works for an honorable owner won’t be allowed to make many poor choices. But the owner occupies a precarious place. Who will hold an owner accountable for making poor choices and how will they regain trust?

At a recent monthly session with a management team, the majority owner announced he had reversed course on a prior decision because he realized his ego had overwhelmed the facts. His poor choice created fear while the recovery created faith and this owner accrued net trust.

Out of 5.6 million companies with one or more employees on the payroll, only 10% make it to more than 20 employees, 1.7% to more than 100 employees, and .3% to five hundred plus employees. Fewer manage to sustain their size for long.

The owner’s choices drive the company and reflect the owner’s character over time. By managing your choices, being accountable to your leadership team, and your peer group you can break the patterns that have held you back. Life is too short to keep repeating the limiting behaviors and patterns that prevent you from scaling your company. Would you like some help?


Leadership Mind

After working for a larger business, Dave launched his company and 12 years later became the largest privately owned company of his type in his market – an American success story by any measure.

Sustaining this success and scaling beyond was clearly testing Dave. On the inside, Dave seemed increasingly fragmented. Launching initiatives that didn’t seem aligned was costing him. His mind was over functioning but he didn’t realize it. If you think Dave’s case is unusual take a step back and listen to what I have to say.

Out of the 5.6 million companies with one or more employees on the payroll, only 10% make it to more than 20 employees, 1.7% to 100 or more employees, and .3% to 500 plus employees. The numbers of companies that expand, contract, stagnate, or die is shocking. Most companies fail to scale. Despite the owner’s best effort, they hit a wall and never move through.

It’s been said that the brain processes around 60,000 thoughts each day regardless of who you are or what you do. If that is true, why do some leaders seem quietly present, thoughtful, aware, and helpful, while others seem overly creative, intense, distracted, impatient, and difficult to follow?

Evagrius, the fourth century author, urges his reader to, “Be like an astute business man: make stillness your criterion for testing the value of everything; and choose always what contributes to it.” This principle led Evagrius to advise us to be calculating in every relational encounter, “testing the value of interactions with other people based on their effect on our pursuit of stillness.”

A cascade of reactions, judgments, and second-guessing clouded Dave’s access to stillness and clarity. So how can he access stillness and clarity in the midst of this struggle? By returning to wholeness and leaving fragmentation.

First, Dave needs to tell himself the truth about himself with the help of trusted peers. Unless Dave can look into the clutter, he will not return to wholeness.

Second, Dave needs to get present with people. Dave engages with the stream of drama that lives in his head. To be present with people he needs to be open and inquiring, allowing thoughts and judgments to pass through without attachment.

Last and most important, Dave needs to quit protecting and pleasing people. This includes employees, children, his wife, and himself. When Dave judges himself as being responsible for another person’s unhappiness, he begins to over function. He will lead best when he can live from a place of stillness.

Dave will experience a growing sense of inner spaciousness when he makes these changes. Becoming more receptive and less reactive will allow Dave to shift from a place of fear to living from faith.

This spaciousness is inherently still, poised and watchful. Scaling a company and a family is full of rich struggles and you either respond or react. In all of these struggles, stillness is your friend and to be still you need help being firmly grounded in reality.

The reason we fail to scale is simple and deep. It’s us. Would you like some help?


Ailment and Antidote

Only 10% of all companies grow to more than 20 employees, 1.7% to more than 100 employees, and .3% to 500 plus employees. Even less manage to sustain that size. The census bureau says there are 5,684,224 companies in the US with one or more employees on the payroll, so do the math.

If the statistics above are accurate, 99% of the leaders reading this blog realize that as their company expands, contracts, or dies the impact to their net worth, succession plan, retirement, lifestyle, and the college education of their children or grandchildren, and possibly their health is anything but predictable. While at the macro level, a company’s life cycle in America is very predictable. On the personal level, it can feel like raw unnerving chaos. The men and women who build small businesses are a unique American treasure.

As I work with these amazing people, I notice different versions of one question operating in their minds, “How do I personally grow my leadership capacity fast enough to lead my people and customers through these cycles successfully?” Leader effectiveness is the one thing that determines success or failure at the ownership, CEO, executive, and manager levels of a company. Are you ahead or behind in this unnerving race?

Profitability is a lagging indicator while leader effectiveness is right now. Improving and sustaining leader effectiveness will always improve future profitability but high or low levels of current profitability are never a reliable measure of leader effectiveness today.

I have found one effective antidote for this ailment. I help leaders understand how effective they are and where they can specifically take simple steps to improve by deploying a web based 360-review tool.

Leaders make themselves vulnerable through this anonymous process and while this is certainly unnerving, it creates the facts to help them know where they stand. This experience sets in motion a virtuous cycle of self-improvement that ultimately cascades throughout the company with astounding results.

The condition of a company mostly reflects the condition of the owners.

The owners are the foundation that the executives and managers stand upon. Knowing where you stand today puts solid ground under your feet while not knowing is like standing on shaky ground.

What’s your Leadership Baseline? The mean average is 73 – are you better than this? As the census bureau statistics shout, average is a dangerous place to stay – but how would you even know?

Its not what we choose that matters, it’s the reason behind the choice that people follow. When a leader makes a choice to assess how well they lead, their reason becomes apparent to everyone. Conversely, when they choose to stay in the dark, they open the door to confusion.

Would you like to know your leadership baseline? I’d love to know your thoughts.  Jim


Your Move

Several years ago, a friend suggested I take Gallup’s Strength Finder test. I discovered my strengths; according to the author, but it didn’t help me in any material way. I’ve also noted after taking most others tests that these generally have a natural bias toward how the taker thinks he or she needs to become to gain acceptance within their group.

Culture has strong norms and tries to conform us to its desires. Unless we are clear about who we are, what gift we bring to our work, and authentically claim the ground we are meant to stand on, chances are that some degree of uncertainty will mitigate our leadership contribution. Today I use a very different process to help leaders get clear on who they are.

In my line of work, being clear on who I am and where I stand is essential. I hope you might say that I am different and to some I may seem polarizing. Leaders are different; leading often means departing from the normal path and can be polarizing.

My Australian friends call this the “tall poppy syndrome.” It describes a social phenomenon in which people of genuine merit are resented, attacked, cut down, or criticized by their peers because their talents or achievements distinguish them from others.

In athletic events, “breaking out of the pack” is a term used for the person who dares to take the lead. Taking the lead with your gifts is risky and the pack usually doesn’t support this initial move.

Being who you are may mean that you need to change where you are or that you need to risk breaking out of the pack. I’ve made these moves and neither is easy, but life is too short not to try.

I know a gifted CEO facing this awkward position now. He built a company and successfully repaid his investors but now he needs to reclaim the shares he sold to them because they are unwilling to pay him the salary he deserves. They have become greedy. Will he break out of the pack and get this done?

Over the years, I’ve helped a gifted young executive develop to the point that he now runs a complex business. This allows the owners to be relatively inactive, but they haven’t offered him shares. Will he break out of the pack to get this done or move to another ball game?

I recently completed a 360 review for a gifted young woman who leads several managers and her evaluation was exceptional. Will her boss see her as a gem and help her become all that is possible or will insecurity place an unnecessary lid on her development?

Each person has a gift to offer the world but most never fully develop it, so his or her life never serves its intended purpose, and we all lose when this happens. Would you like to stand on firmer ground? I’d love to know your thoughts.


What Matters

Just the other day, I helped a senior management team evaluate the effectiveness of their published core values and I noticed something remarkable – the team was void of emotion.

A few years back, through consensus, this team involved employees and leaders and they designed core values for their company. Did these core values matter?

When something matters, it is not optional. By “designing” their core values these leaders were implying the values were aspirational and therefore living them was optional. Not one of these team members could describe more than two of the values. So were these truly core values?

The true test is asking, “Does it matter?”

The word conviction means “a firmly held belief or opinion” and this is the test. Core values are obvious because you see people living them. When something matters, it is visceral – it comes with strong emotion and conviction. In other words, when something is worth fighting for we clearly see what matters to someone. Conversely, when someone is absent of emotion there is a problem, unless nothing matters.

As leaders, each of us hopes that we matter but deep down we sometimes wonder. We often avoid the risk of finding out and we disguise our real values. This causes us to publish core values that are acceptable but powerless, instead of living the ones that are visceral and personal. Fair warning – hiding becomes contagious.

The real action is living core values.

I asked each member of this team to recall a recent time when they saw someone doing something that made them angry or made them want to celebrate and then each person shared their specific story with the team. Within ninety minutes, they discovered a small group of values that were visceral and core.

As I supported them in their conversation, they galvanized around simple important values that created emotion and life. I could see them reconnecting with “what mattered.” Freedom starts with the risk of being authentic. If you find yourself compromising your core values for being accepted, run!

Core values also need to be clear. Describing the specific behaviors that each value demands helps everyone understand. Explaining the behaviors makes it impossible to clearly recognize “A” players, encourage “B” players, and help “C” players find other opportunities.

Competency and behavior must be required.

Consider the last person you fired. Did you let them go because they were incompetent or because of their behavior? Most would answer behavior, which is another way of saying that the person consistently breached your core values.

Leading will always feel like herding cats until you make your core values and behaviors clear. Real core values are never optional, and once operationalize them you will experience freedom!

What matters to you determines who follows you and how far. Merely posting a list of values on a wall contributes to creative disintegration. I’ll say more about that in my next post.

As always, I’d like to know your thoughts.


Brutal Facts

The capacity to openly receive and process brutal facts is a trait that most leaders of the best companies demonstrate. Facing these facts isn’t easy. How these leaders cultivate this capacity is valuable and fascinating.

Steve owned 50% of a $40+m company and when I first met him, I observed that he was in love with the excitement of competing to win. The excitement of winning feels powerful. It can be addictive and when the competitive thrill drives us, its ugly cousin tags along – a strong inner resistance to brutal facts.

Winning means different things to each of us. For some, it is the absence of failure and for others it’s when they establish a place of status or prestige such as being the owner or CEO. For one CEO I know, winning is the experience of hanging out with an exclusive team of people, while another CEO feels he is winning when he’s in control.

Being a leader creates an opportunity to confront the brutal facts about ourselves but unfortunately, many owners and CEOs unknowingly keep this doorway locked. For many, walking through this door can feel like losing status, losing control, or allowing others to see a chink in our amour. The need to win, combined with the disguised fear of facing reality, is one reason why it’s so difficult to receive the brutal facts. Most of us simply don’t know how to process this information.

Let’s face it; many people want to share the brutal facts as they see them. In my work with senior management teams, CEOs, and owners, cultivating the capacity to receive and accurately process these facts is one part of a multi-year journey. After spending thousands of hours in 1:1 sessions and advisory board meetings, I’m sure of one thing. There is nothing standing in the way of growth and profitability other than ourselves and by simply accepting the facts, this first doorway to freedom opens to us.

Moving into a new arrangement requires receiving from others who bring wisdom and compassion.

As I helped Steve become aware of this obstacle, I watched him go through the same pattern as the others I have helped. Three steps forward and two steps back. We all want change to happen quickly but it never does and without successfully completing this one rite of passage, scaling your company is nearly impossible.

Last August Becky and I completed building our home and the last step to moving in was completing the landscaping. Alan, our landscaping contractor, shared that the first year the new plants would sleep, the second year they would creep, and the third year they would leap.

This natural process also applies to leadership development. In the first year of this journey, a leader marinates with peers on the same journey, in the second year a leader cautiously creeps forward and in the third year, they leap. There is no way to speed up this cycle but there are plenty of ways to prevent it from happening. Are you ready for this second door of freedom to open wide? I’d love to know your thoughts.

PS – Stay tuned for the next doorway in my next post.