This presentation was made at the Entrepreneur Organization's 2014 Conference in Toronto, Ontario on June 12th, by Behavioral Change Expert, Heather Hilliard. It demonstrates the different stages of development every business goes through - from infancy to adulthood - and shows the types of challenges that entrepreneur's face during each challenge.
From Red to Green: Enhancing Decision-Making with Traffic Light Assessment
Stages of Organizational Growth in an Entrepreneurial Organization
1. Leadership systems that
create powerful companies
Stages of Organizational
Growth
Entrepreneurs Organization
June 5, 2014
Presented by: Heather Hilliard,
Developed by: Anne Dranitsaris, Ph.D.
Behavioral Change & Leadership Experts
2. What you will learn
Entrepreneurial personality
5 reasons entrepreneurs resist growth
Stages of authentic organizational growth
What stage your organization is at
Nurture or sell your business
7. Entrepreneurial Personality
Visionary/Future oriented
Thrive on chaos
Competitive
Confident, risk-takers
Externally focused, action oriented
Full of life, energy & optimism
Determination & can-do attitude
8. Entrepreneurial Personality
In perpetual growth mode (growth
for the sake of growth itself)
Need for constant stimulation
Quick fix problem solving
Inability to tolerate frustration
Don’t consider (or don’t care
about) the impact of their style on
employees or the chaos they
create
Low interpersonal needs
9. Entrepreneurial Personality
Driven to create and run a business in a way that meets
your needs
Often at the expense of the business and its growth
11. Entrepreneurial Mindset
Equate personal success &
competence with money
Self-esteem tied in with growth of
business
Become anxious, deflated when
they stop focusing on growth &
wealth creation
Don’t want to lead, coach or
mentor their people as it doesn’t
give them intrinsic satisfaction
#1
12. Inhibited by Self-Image
Self-image is one of success &
competence
Need to be recognized; to distinguish
themselves
See themselves as having everything they
need to be successful
Fail to develop business IQ
Don’t listen to what they are being told; fail
to accept aspects of reality if they conflict
with their vision or self-image
#2
13. Dislike of Hierarchy
Enjoy the camaraderie of the start up business; fail to put
in systems, structure or reporting relationships
Don’t like to impose their agenda on others
Believe everyone has similar need for autonomy & fail to
correct or tell employees how they want things done
Uncomfortable using their position power
Create chaos & disorder in the business & relationships
#3
14. Driven by Own Needs
Success = money = need for recognition met
Need for recognition keeps them growing the business
without a foundation
Fail to consider the needs of employees in the pursuit of
getting their needs net
Fail to empathize or care about employee experience
Competitive: their need to distinguish themselves & be
better than others stops them from making real
connections with people
#4
15. Low Tolerance for
Frustration
Impulse control not well developed
Impatience for success causes them
to move to market before they are
ready
Will fire people without helping them
be successful
Will leave their business when they
hit a crisis of growth
Become unsettled with anything that
slows them down
#5
17. Stages of Growth in an
Entrepreneurial Business
Businesses grow through stages with distinct needs
Entrepreneur & business need to grow & mature
through each stage
Passage from stage to
stage marked by crisis
points
Nature & characteristics of
the entrepreneurial
personality can get in the
way of growth of business
18. From Infancy to
Adolescence
Everything & everyone dependent on the Entrepreneur
Familial, informal environment with no hierarchy
Externally (sales & market) focused
Youthful feelings, anything is possible
All consuming state of complete
engagement with creating the
business
Want the feelings of this
stage to go on & on
Stage
1
19. From Infancy to
Adolescence
All activity focused on how to
get the product or service to
market
Entrepreneur is at the hub of
all activity
Freedom given to all
employees to self-manage
Build culture as the ideal place
they would like to work in
Stage
1
20. Crisis of Growth &
Stuck Point
Growth of the business leads to:
increase of internal chaos, acting out & dysfunctions
conflict due to lack of boundaries, role definitions or
organizational structures
increased employee turnover
no longer “high” on business
feel powerless in own business
Stage
1
21. Shall I Stay or Shall I Go?
GO
Many entrepreneurs keep their business at this stage for
many years
not prepared to change their own behavior
Fantasize about selling the business & moving on
decide to get the business ready
to sell
generally not enough of an
infrastructure to be saleable
Stage
1
22. Shall I Stay or Shall I Go?
STAY
Decide to be a leader, not just an
entrepreneur
Realize how your lack of business
IQ causes issues & get coaching,
training, etc
Prepare to share leadership &
decision making
Create some systems & processes
Stage
1
A body without bones
will flop…. So will a
business without a
sound structure.
23. From Adolescence to
Adulthood
2 tiered leadership model
Entrepreneur grows the business
Business manager or team for
people, financial & systems
Try to keep hierarchy flat
Top down planning
Some infrastructure
Stage
2
Entrepreneur
Business Manager
Employees
24. From Adolescence to
Adulthood
Time freed up to continue growing
the business
Permissive with employees, say
yes without thinking of
consequences
May have two sets of rules: one
for you and the other for everyone
else
Increase in wealth creates image
driven spending
Stage
2
25. Crisis of Growth &
Stuck Point
Growth of the business leads to:
bottlenecks in the decision making
process
us & them mentality; power
struggles; high turnover
employees feel stifled,
disempowered
unpredictably, chaos, confusion
feel like the “bad guy” instead of the
“hero” in your own business
Stage
2
26. Shall I Stay or Shall I Go?
GO
Entrepreneur wants out of the business
hiring a manager has not solved the problem
not willing to delegate more authority
upset with employees
Seeks professional help to audit business
Gets business ready for sale
Already looking for other
opportunities
Stage
2
27. Shall I Stay or Shall I Go?
STAY
Revisit business hierarchy:
delegate authority
Separate own from business
identity
Recognize the importance of the
employee experience to the
growth of the business
Seek professional help to build a
professional organization
Stage
2
Behavior, systems &
processes must be
aligned to a single
identity to move
ahead.
Business
Identity
28. Adulthood
Business entity defined
Entrepreneur has clearly defined role
Hierarchy, standards, processes & reporting
Authority distributed throughout hierarchy
Stage
3
29. Adulthood
Entrepreneur looks for opportunities to expand, innovate,
acquire & grow
Not involved in day-to-day business management
Leadership team in place
Defined systems throughout the organization
Stage
3
30. Crisis of Growth &
Stuck Point
Growth of the business leads to:
chaos due to fast growth without considering the
impact on people or readying the business
inexperienced managers making decisions
autonomously
confusion of employees as to who is in charge
lack of communication systems lead to silos
Stage
3
31. Shall I Stay or Shall I Go?
GO
Entrepreneur satisfied with how far the business has
come
trusts leadership team to run the business
not enough challenge
excited about another venture
Hires person to take his place
Establishes Board of Directors
Stage
3
32. Shall I Stay or Shall I Go?
STAY
Invest in employees, the business
& yourself
Conduct leadership audit & gap
analysis
Create a change plan for
strengthening your business: align
people, behavior & practices
Build relationships & trust with
employees
Stage
3
You know the value of
investing in your
business to increase
bottom line results
33. Maturity
Effective meetings, communications, & issue resolution
Use of informal social networks amongst employees
Clear expectations lead to increased productivity &
financial results
Energy put into the employee experience increases
engagement
Leaders spending more time leading
and less time doing
Stage
4
34. Maturity
Low employee turnover with a committed workforce
Top talent attracted to business because of reputation
Employees are in roles that meet their needs and match
their strengths and interests
Alignment of energy & focus on collective vision
Success factors identified, managed & achieved
Stage
4
36. Navigating the Stages…
Identify what stage you business is at
Examine whether you want to stay or go
Determine what you need to do to get to the next stage
Make investments, as you would into assets
Get the support and expertise you need
37. Navigating the Stages…
Greatest challenges for the entrepreneur
Waking up to what you business actually needs
Not bailing as soon as it gets too uncomfortable
Stop blaming and complaining
Using true experts despite how they make you feel
Acknowledging your own role in any dysfunction
Invest – both money and your own time
38. Questions?
For more information, contact us:
Heather Hilliard
hhilliard@caliberleadership.com
416.406.3939
www.CaliberLeadershipSystems.com
www.StrivingStyles.com
Notes de l'éditeur
Characteristics, behaviors and needs of the entrepreneurial personality that cause the business to grow or stall
The stages of authentic organizational growth
5 key reasons entrepreneurs unconsciously resist moving their business to the next stage
What stage your organization is at - identifying where your business is stuck
Nurture or sell your business: Building the infrastructure and authentic growth process for taking your business to the next stage
Predetermined to be an entrepreneur based on our brain style
Our
Our
Visionary/Future oriented - anticipate future trends; identify & exploit elements of the business environment that lead to profitable & sustainable business
Thrive on chaos - fast-paced, quick-minded; don’t need to be ready to start
Competitive - orientation to being the best; seek to be ahead of the pack, not in or with it
Confident, risk-takers; believe in their abilities & vision; tolerate uncertainty & ambiguity;
Full of life, energy & optimism
fun, playful, charismatic
inspire & enthuse others
Determination & can-do attitude
energy & focus needed to bring a business into existence
do what they love & love what they do
Entrepreneurial leaders tend to go for the quick fix so they don’t have to slow down from the pace of growth they like driving toward which further gets in the way of finding how to organically and authentically move beyond where they are stuck. They try to find one thing or person that is the cause of the problem instead of reflecting on the organic growth needs of the business. As their personality is not naturally oriented to inward reflection, they don’t reflect on the authentic needs of the business. Instead, they look outside to best practices and impose what other companies do on their own. Most importantly, they can fail to look at the impact of their entrepreneurial leadership style, the negative experiences their employees may be having as a result, and the amount of chaos and lack of alignment of goals, productivity, behavior and values.
In perpetual growth mode (growth for the sake of growth itself)
difficulty with slow growth
inner drive to keep moving ahead
Need for constant stimulation
over-commit and overpromise
create chaotic work environment
Quick fix problem solving
try to find one thing or person that is the cause of the problem
don’t reflect on the organic growth needs of the business
Externally focused, action oriented
not naturally oriented to inward reflection
look to what other companies do to fix problems
Don’t consider (or don’t care about) the impact of their style on employees or the chaos they create
Enjoy the camaraderie of the start up business
Don’t like to impose their agenda on others
Believe everyone has similar need for autonomy & fail
Fail to delegate authority
Expect others to know what to do without defining it
Expect others to know what they want without
Passage from stage to stage marked by crisis points – the discomfort of reaching the stage-related ceiling of expansion
Limitations of entrepreneur cause business to get stuck in this place for long periods
Spend most of their time reacting to problems in the business
Frustrated and resentful of the time employees demand
In the evolution of a company, from small to mid-sized and beyond, the needs of its people and the organization change as it goes through the natural stages that growth brings. We believe that businesses, like humans, have a predictable pattern of development over their life span. And, like humans, they have different needs during each stage of growth. Each of the stages is sequential, and the business needs to pass through each one in order to sustain their growth. The passage from stage to stage is marked by crisis points – the discomfort of reaching the stage-related ceiling of expansion. Often, organizations get stuck in this place for long periods, becoming increasingly reactive in their approach, as a result. Just when it looks like they have fixed one issue, something happens to put them right back into reactive mode again. Leaders keep doing what they have done to problem solve in the past, thinking that this should get them to where they want to grow. This is because they don’t know how to move organically and authentically beyond where they are stuck.
In the evolution of a company, from small to mid-sized and beyond, the needs of its people and the organization change as it goes through the natural stages that growth brings. We believe that businesses, like humans, have a predictable pattern of development over their life span. And, like humans, they have different needs during each stage of growth. Each of the stages is sequential, and the business needs to pass through each one in order to sustain their growth. The passage from stage to stage is marked by crisis points – the discomfort of reaching the stage-related ceiling of expansion. Often, organizations get stuck in this place for long periods, becoming increasingly reactive in their approach, as a result. Just when it looks like they have fixed one issue, something happens to put them right back into reactive mode again. Leaders keep doing what they have done to problem solve in the past, thinking that this should get them to where they want to grow. This is because they don’t know how to move organically and authentically beyond where they are stuck.
Want the feelings of this stage to go on
optimism, excitement, high energy
power, potency & infallibility
Breathing Life into the Business Everything & everyone dependent on the Entrepreneur
youthful excitement
exciting, fun, pregnant with possibilities
Familial
few people, personal connections
informal
Absence of defined structures, systems, reporting, roles, etc.
everyone does what needs to be done
Externally focused
focus on market awareness, growth & survival of the business
building rather than leading the business
Focus on survival of the business
Lack of branding or consistent identity internally and externally
Leaders and employees on auto pilot
Unconscious competent
Don’t know what they don’t know
Rise to the level of their incompetence
Absence of business systems and processes
Lack of planning, reactive to needs in the moment
Lack of performance management/ accountability
Lack of hiring practices
Focus on survival of the business
Lack of branding or consistent identity internally and externally
Leaders and employees on auto pilot
Unconscious competent
Don’t know what they don’t know
Rise to the level of their incompetence
Organizational silos or closed systems
Communication up and down, not connecting to other silos
Individuals, teams operate without recognizing the impact on others
Absence of business systems and processes
Lack of planning, reactive to needs in the moment
Lack of performance management/ accountability
Lack of hiring practices
Breathing Life into the Business Everything & everyone dependent on the Entrepreneur
youthful excitement
All activity is focused on the product or service and how to get it to market
Entrepreneur is at the hub of all activity
Freedom given to all employees to self-manage
Object to traditional hierarchy: build the culture as the ideal place they would like to belong to & work in
exciting, fun, pregnant with possibilities
Familial
few people, personal connections
informal
Absence of defined structures, systems, reporting, roles, etc.
everyone does what needs to be done
Externally focused
focus on market awareness, growth & survival of the business
building rather than leading the business
Focus on survival of the business
Lack of branding or consistent identity internally and externally
Leaders and employees on auto pilot
Unconscious competent
Don’t know what they don’t know
Rise to the level of their incompetence
Absence of business systems and processes
Lack of planning, reactive to needs in the moment
Lack of performance management/ accountability
Lack of hiring practices
Focus on survival of the business
Lack of branding or consistent identity internally and externally
Leaders and employees on auto pilot
Unconscious competent
Don’t know what they don’t know
Rise to the level of their incompetence
Organizational silos or closed systems
Communication up and down, not connecting to other silos
Individuals, teams operate without recognizing the impact on others
Absence of business systems and processes
Lack of planning, reactive to needs in the moment
Lack of performance management/ accountability
Lack of hiring practices
Crisis occurs when they aren’t feeling “high” on their business any more
Increase of internal chaos
working long & hard
overpromising or commitments to secure sales leads to disgruntled employees
Little role definition or organizational structures
can’t distinguish between important/unimportant issues
emotionally driven behaviors; acting out
Entrepreneurs dependent on employees
tolerate poor performance
hiring practices are subjective, based on need
energy spent dealing with issues
Focus on building market awareness leads to internal chaos as the business grows
Little definition or structure
can’t distinguish between important/unimportant issues
emotionally driven behaviors; acting out
Unconscious self-destructive behaviors emerge
Avoid issues
Fail to honour commitments
Change mind/direction
Get involved with another venture
Leaders become emotional when things don’t get done
Employees are dependent on being told what to do
Conflict and dissatisfaction go underground
Tolerate poor performance
Hire like minded people; hiring practices are subjective
Employees thrown in where needed without training
Energy spent fixing problems caused by failures in communication
Opportunities fall through cracks
Whether you want to be around for the long haul or just build it enough to increase its market value to sell it you need to:
To get to Stage 2, you need to:
become aware of the changing needs of the business and employees
recognize that way you lead & behave contributes to issues
prepare to give form to your business with systems & processes
be prepared to slow down
realize you can’t grow the business without attending to it’s needs
Whether you want to be around for the long haul or just build it enough to increase its market value to sell it you need to:
To get to Stage 2, you need to:
become aware of the changing needs of the business and employees
recognize that way you lead & behave contributes to issues
prepare to give form to your business with systems & processes
be prepared to slow down
realize you can’t grow the business without attending to it’s needs
2 tiered leadership hierarchy
entrepreneur delegates management of business to manager(s)
delegation of tasks without authority
everyone reports in to same people
decisions made without consultation
Building of the business model & infrastructure
Introduction of systems to stabilize growth
systems for communicating, reporting
processes and systems in some areas but not in others
objectivity in hiring practices
Planning without accountability
goal setting without system for follow through
strategic planning without planning system (sits on shelf)
Leaders recognize inconsistent or fractured identity – employee and stakeholder experiences vary
Growing awareness of business, leadership and people needs
Growing awareness of the issues that are systemic in the organization
Recognize that the business can’t sustain growth or survival without an infrastructure
Recognize that financial results do not equal business success
Concern for quality of working life and authentic work experiences
Ability to identify issues but don’t know how to resolve them
Off-the-shelf performance systems without training
Goal setting without system for follow through
Decisions made to resolve issues without consultation
Attempts to improve hiring practices (person focused)
Processes and systems in some areas but not in others
2 tiered leadership hierarchy
entrepreneur delegates management of business to manager(s)
delegation of tasks without authority
everyone reports in to same people
decisions made without consultation
Building of the business model & infrastructure
Introduction of systems to stabilize growth
systems for communicating, reporting
processes and systems in some areas but not in others
objectivity in hiring practices
Planning without accountability
goal setting without system for follow through
strategic planning without planning system (sits on shelf)
Leaders recognize inconsistent or fractured identity – employee and stakeholder experiences vary
Growing awareness of business, leadership and people needs
Growing awareness of the issues that are systemic in the organization
Recognize that the business can’t sustain growth or survival without an infrastructure
Recognize that financial results do not equal business success
Concern for quality of working life and authentic work experiences
Ability to identify issues but don’t know how to resolve them
Off-the-shelf performance systems without training
Goal setting without system for follow through
Decisions made to resolve issues without consultation
Attempts to improve hiring practices (person focused)
Processes and systems in some areas but not in others
Resist focusing on what the business and employees need (not fun)
No reward or intrinsic satisfaction (no high)
employees seem to complain about everything
Crisis occurs when there are too many demands for their time
Your manager is siding with your employees against you
Feel like the “bad guy” instead of the “hero” in your own business
Growth of the business leads to:
bottlenecks in the decision making process
us & them mentality; power struggles
reactive & independent decision making
entrepreneur fails to follow own systems
feeling overwhelmed
Increased energy spent on dealing with employee issues; firing weakest performer and hiring repeatedly
Employees are vocal about dissatisfaction; blame leaders and organization for issues
Chaotic and disorganized, lack of alignment
Absenteeism, presenteeism, employees “getting away” with not doing their work
Leaders unsure of how to manage performance; blame employees for problems
Leaders address performance issues and don’t follow up; no change
Lack of cooperation; competition amongst team members, departments, etc.
Employees offered some training; may or may not use new skills
Whether you want to be around for the long haul or just build it enough to increase its market value to sell it you need to:
To get to Stage 2, you need to:
become aware of the changing needs of the business and employees
recognize that way you lead & behave contributes to issues
prepare to give form to your business with systems & processes
be prepared to slow down
realize you can’t grow the business without attending to it’s needs
Consider the organization as a whole – what business and people need
Separate entrepreneur’s & business identity
Recognize the importance of the employee experience to the success of the business
Recognize to build a professional organization, need professional help
Stop putting band-aid solutions on issues
Start looking at the organization as a whole instead of individual problems
Get professional help: invest in building a professional organization poised for sustainable growth
Recognize the importance of the employee experience to the success of the business
Whether you want to be around for the long haul or just build it enough to increase its market value to sell it you need to:
To get to Stage 3, you need to:
stop putting band-aid solutions on issues
start looking at the organization as a whole instead of in silos
be prepared to get into the details of the organizational identity
be prepared to self-assess and engage in leadership development
focus their attention internally, investing in building the foundation for the organization
recognize the importance of the employee experience to the success of the business
reaLeadlize they can’t achieve the organizations potential or their own if they keep leading it they way they are
recognize this cannot be done without external expertise and support and hire experts (such as Caliber)
Business entity defined, including identity, cultural norms, values & ecosystem it operates in
Separate the entrepreneur from the business
Entrepreneur has clearly defined role
Create hierarchy to delegate authority throughout business
Create a model for the business identity, including cultural norms, employee experiences & image
Begin to look at the organization as an entity and not something with issues and problems to solve.
Increased consciousness of organizational and need to align business and people practices
Articulate the vision, identity, values, mission and purpose of the business; determine new branding aligned
Create an organizational Ecosystem with a map of the interdependence of people, teams, departments, processes, etc.
Clear definitions of each role, mandate, behaviors that align with and support with the overall identity of each part of the ecosystem (each employee, team, leader, processes, plans)
Business systems and practices identified to support the organizations dynamic web of interdependent teams, individuals, etc.
Understand and communicate how important each employee is to the business
Begin to look at the organization as an entity
Separate the entrepreneur from the business
Recognition that the business can survive without you
selecting and developing systems, processes, etc. that are congruent and aligned with the organization’s identity and purpose
identifying employee needs
Focus on creating a model for which will ensure authentic experiences for employees
Employee survey to integrate needs of employees and the experiences they need to make them thrive
Identify areas of incongruence with Organizational Identity
Identify factors that create a lack of trust and inconsistent leadership
Identify potential resistance to implementation of the network
Begin to look at the organization as an entity and not something with issues and problems to solve.
Increased consciousness of organizational and need to align business and people practices
Articulate the vision, identity, values, mission and purpose of the business; determine new branding aligned
Create an organizational Ecosystem with a map of the interdependence of people, teams, departments, processes, etc.
Clear definitions of each role, mandate, behaviors that align with and support with the overall identity of each part of the ecosystem (each employee, team, leader, processes, plans)
Business systems and practices identified to support the organizations dynamic web of interdependent teams, individuals, etc.
Understand and communicate how important each employee is to the business
Begin to look at the organization as an entity
Separate the entrepreneur from the business
Recognition that the business can survive without you
selecting and developing systems, processes, etc. that are congruent and aligned with the organization’s identity and purpose
identifying employee needs
Focus on creating a model for which will ensure authentic experiences for employees
Employee survey to integrate needs of employees and the experiences they need to make them thrive
Identify areas of incongruence with Organizational Identity
Identify factors that create a lack of trust and inconsistent leadership
Identify potential resistance to implementation of the network
Consultants can help this transition first by facilitating the decision to loose the reins of control. This can be difficult for a senior team used to total power, but it can also be a relief not to be constantly pestered with requests for decisions where the senior team actually know less and less about what the right thing is and are increasingly likely to accept recommendations anyway.
Having given up much control, the senior team can now be coached more in strategic decision-making and managing in a way that encourages and trusts decisions from lower down the hierarchy. It is also a good idea here to spend time with the operational managers to help them feel and effectively handle their responsibilities.
Crisis of control
Perhaps unsurprisingly, the loosing of control leads a certain amount of chaos, particularly as junior managers grab their new authority and make varying decisions that may be at odds with one another and with the central strategy.
This may make senior managers regret their decision to delegate, but the cat is now out of the bag and, with the increasing size of the company, a return to them making all the decisions is impractical.
Whether you want to be around for the long haul or just build it enough to increase its market value to sell it you need to:
To get to Stage 2, you need to:
become aware of the changing needs of the business and employees
recognize that way you lead & behave contributes to issues
prepare to give form to your business with systems & processes
be prepared to slow down
realize you can’t grow the business without attending to it’s needs
Consider the organization as a whole – what business and people need
Separate entrepreneur’s & business identity
Recognize the importance of the employee experience to the success of the business
Recognize to build a professional organization, need professional help
Stop putting band-aid solutions on issues
Start looking at the organization as a whole instead of individual problems
Get professional help: invest in building a professional organization poised for sustainable growth
Recognize the importance of the employee experience to the success of the business
Whether you want to be around for the long haul or just build it enough to increase its market value to sell it you need to:
To get to Stage 3, you need to:
stop putting band-aid solutions on issues
start looking at the organization as a whole instead of in silos
be prepared to get into the details of the organizational identity
be prepared to self-assess and engage in leadership development
focus their attention internally, investing in building the foundation for the organization
recognize the importance of the employee experience to the success of the business
reaLeadlize they can’t achieve the organizations potential or their own if they keep leading it they way they are
recognize this cannot be done without external expertise and support and hire experts (such as Caliber)
Low employee turnover with a committed workforce
Alignment of energy & focus on collective vision
Employees are in roles that meet their needs and match their strengths and interests
Success factors are identified, including employee development, meeting deadlines and team improvement challenges as well as organizational performance targets
Critical success factors are the areas where you must do well in order to achieve the business objectives
Top talent is attracted to the authentic business because of the reputation
Each employee is aware of their importance in the organizational ecosystem and takes pride in ownership
Recognition of the behaviors that support the organizational identity, internally and externally