How many times a week do you find yourself giving orders to the team. Have you ever said something like; “I need this by tomorrow”? “We have to get this done by Friday!” Would you be surprised to hear that more mature organizations with stronger leaders almost never say things like that? When I tell owners this, some of them respond with an answer that sounds like this; “The business is highly responsive to customer needs. And often that means doing things on their schedule ASAP.” But the truth is, that once you get to Redbank Capability Maturity Level 3, where change is planned and managed, you, as CEO should almost never give orders, instructions or suggestions to the team that requires a course correction or reprioritization within a week. If you are doing that, you are exercising control over your organization rather than influence. And the need for Owner/CEO control is a classic discount item on the value of your business when you go to sell it. The buyer is always asking; “can we operate this without the owner?” And if the answer is; “No” then the buyer discounts the price they are willing to pay because they can’t be certain they can find an exact replacement for the owner. “I’m not going to sell” I can hear some of you saying. But the damage to the organization goes beyond just a nebulous future reduction in real options. It effects the organization to its foundations. Let’s unpack this.
But I Know Better
You probably do. At least while the organization is in level one, Ad-Hoc and level two, Defined. In the first level when a business is first launched and typically chaotic, even a customer proposal is an all-hands-on-deck emergency, and people need to be told what to do. The visionary holds all the cards… which is why they founded the business in the first place. In level two, the processes are now defined, everyone knows their role and processes are followed by all employees. Still when change is needed to improve the performance of the organization or even respond to outside pressures, change tends to throw the group back to level one while ramifications are ironed out and everyone adjusts their role. In a rapidly growing organization, this can be almost debilitating as the organization is constantly adjusting to new processes and the dust never settles. Depending on the industry, this lack of control over change limits growth. Clients stuck in this state seldom exceed a growth ceiling. They get new customers just to lose old ones.
In the Ad-Hoc and Defined stages, it takes an iron will to keep a rapidly growing organization “under control”. Slower growing organizations don’t have the same problems because the need for change is reduced. But in a rapidly growing organization, this takes high energy, some say an exhausting level of energy, to maintain growth AND control. Eventually, this will limit the organization because one person, no matter how great you are, can’t be as effective as a well oiled team with a plan and swim lanes.
Planning Is NOT A Luxury
Often leaders of rapidly growing organizations will say things like; “we don’t have the luxury of the time required to sit down and examine our navels while we plan out the next five years. I don’t even know what next month is going to look like. While I can’t advocate spending a lot of time on strategic planning, 1% of the organization’s time is certainly required to decide what the organization will be working on in order to improve the value and impact of the organization. This equates to 3.65 days per year across the entire organization and since the whole organization won’t be engaged, but just the leadership, this percentage is actually much lower.
In order to get to level three Proactive, where change is managed, strategic planning becomes a requirement. The reason for this is twofold. First, the organization will spend all of its time serving customers if it is allowed. Customers demand attention and the team wants to make them happy. Second, serving customers will not implement changes that are needed to improve how the organization works except for customer driven processes. If the organization is to advance its capabilities for its own sake, driving earnings, it must plan projects to develop its capabilities that are not daily operations driven. It must set aside time to work on itself. You have probably heard this referred to as time working ON the business rather than IN the business. And if you don’t plan the year in advance and hold people accountable to doing non-customer driven activities, it just won’t happen. The customers will be louder, more urgent and to all appearances, more important.
The Answer Is Strategic Planning And Execution
Strategic planning and execution are the things that set level three apart from level two organizations. The ability to lay in a plan by January 1 and then execute to that plan over the course of the year with a sustained level of effort across months is critical to growing the value of the organization without increase its dependence on the Owner/CEO. Clients that achieve this grow their value and impact faster. In fact, a less aggressive company with excellent planning and strategy chops can easily outpace a frenetically aggressive company driven by a manic CEO barking orders to be completed by Friday because the latter is seldom able to keep the whole organization moving and controlled.
Call To Action
Determine where the organization is on the Redbank Capability Maturity Model and see if strategic planning and execution are something than can drive it to the next level of growth and impact.
1. Conduct a Rapid Business Assessment
2. Discuss the results with the leadership team
3. Establish a plan to advance the organization’s key capabilities over the next five years
4. Establish a scorecard for day-to-day performance as well as progress against the plan
5. Hold Monthly and Quarterly Business Reviews to asses progress and course correct
I hope you found something to apply to your business in this MBR. Let me know either way.
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