Dr. Earl R. Smith II

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

A common weakness of almost all management theories is that they are an essentially static conception of a dynamic process. As such they cultivate ignorance rather than enlightenment and promote failure rather than success.

A couple of years ago I began a coaching engagement with a CEO of an emerging company. As with all similar efforts it began with a search for one or two starting points – tactical issues – that we could initially focus on. But, it quickly became apparent that there was a large elephant in the room – one issue which seemed to overshadow all the others.

“I don’t know what it takes to lead. And I don’t know if I have the experience and wisdom to lead the team that we are forming. My company is growing faster than I am. I feel like I’m being left behind – becoming less and less relevant.”

This person had assembled a team and built a small but growing business. Their annual revenues had finally moved above a million dollars. That alone would seem an indication of the team’s success and a validation of the company’s value proposition. The business was moving out of the garage stage. Their client base was expanding. Things had finally started to look better after a long hard slog. But growing pains were emerging everywhere. And some of them were precursors of potentially very destructive problems.

The early stages of the company’s growth were dominated by a group of people who were heavily involved in the technology that was at the root of the company’s value proposition. But now the founders found themselves increasingly consumed by the problems of running and resourcing a business and out of touch with the latest technology developments. The expansion of the management team was producing cliques.

Original team members were increasingly coming up against problems that they lacked the skill set for and had no experience solving. New team members seemed to be expecting a more professional corporate culture than they found once on board and had little passion for the sense of family that had defined the earlier stages. The business development team looked more like an afterthought – an add-on – and seemed, in some ways, to be a whole other organization.

In the early days it was enough that the founder had a good idea and was passionate about the business, was a good salesman, great at making contacts and reliably getting business through the front door. It also helped that he could roll up his sleeves and deliver quality work to a satisfied client. But the first rush of growth was now in the past and things had started to deteriorate. The role the CEO had historically played left huge patches uncovered. Critical needs in the management area were taking time away from keeping current on the latest technology developments. The CEO was no longer the top technology ace in the stable.

There were challenges in these new areas that seemed intractable. Problems could no longer easily be diagnosed and solutions were much more difficult to devise and implement. Resourcing was a much more complicated matter and ‘getting it wrong’ was much more expensive. Simply said, there wasn’t a process in place, any structure, any management, any data, and often insufficient records to allow him and his team to deal with them.

Taken together these growing pains and new challenges threatened to limit or block the company’s growth. And the CEO, at first frustrated, was now becoming frightened that it was all going to fall apart despite his best efforts.

“I have assembled all these very talented people but I cannot seem to get them to work as a team and execute our corporate vision.”

I had reservations about starting with such a complex set of issues. This is pretty heavy lifting for a first focus of a coaching engagement. The CEO’s apparently simple statement rested on top of a complex and interrelated set of problems. Here are just some of the issues that came to mind. The first was, of course, “What does it mean to lead?” The second was, “How does the process of evolving and promulgating a corporate vision have to change as a company grows?” The third focused on the question “How do you integrate increasingly diverse backgrounds and expectations into a rapidly growing team?” Another set of questions revolved around “What do I as a CEO have to become to effectively manage this new team?” And those were just some of the big issues! I suggested that we start with a more manageable focus. But the CEO was insistent that we start where his pain was the strongest. And so we headed for the mountain!

Over the following months I introduced a number of concepts that we eventually integrated into a holistic response to the core questions. The CEO undertook a heroic, and I say with some pride a successful, effort at changing his own behavior, ideas about leadership and understanding of how teams grow and work effectively. I am convinced that, without this work, the company would have languished and then declined – eventually going out of business. But the actual story is far brighter and the success far sweeter because of the concerted efforts that went into making the telling differences. The chronicles of our journey would fill a book. Here are just two examples of what we came up with:[1]

Re-envision yourself and your company: In some very important ways your company is like your child – and children grow up and, in the process, change. As much as you might, during nostalgic moments, like your teenager to have the needs and responses that they had when they were a five year old, treating them like a five year old is a sure recipe for disaster. At sixteen they need different things from you and, as a good parent, you need to make sure that they get them. It is much the same with your company.

In the early stages it needed you, as a founder, to be an invincible jack of all trades – a worker among a team of other workers who were laboring in support of its future – in many ways a leader among a group of relative contemporaries. Like the three year old it needed a god that is omnipotent – one that is always looking out for its interest and protecting it from the bad guys. As its father or mother you set the rules and made all the major (and sometimes minor) decisions. The company’s needs were modest and you could provide them out of your own understanding, knowledge and emotional resources.

But as the company grew it needed you to become more and more a manager who can bring in all sorts of talent and resources – and organize and manage them effectively. There is a reversal of the ‘provider’ roles. Your company is well on its way to becoming a better generator of economic benefits to a wider range of people than you could ever be. Much like a teenager develops their own taste in clothing and music, your company develops a culture that is different, and often radically different, than the one you tried to give it at birth.

Maybe another ‘family’ parable will help you see what I’m getting at. When you were single you got to determine pretty much everything about your life. Once you got married or into a ‘significant other’ relationship, things got a bit more complicated. Once you had two or three children and they started to grow into teenagers, things got completely out of hand. Your family took on a character that was neither you nor the sum of its members. It became a thing unto itself with its own characteristics, quirks and appetites.

So the challenge of growing a company into its teens is really a double one. Much like the parent relating to a child, you need to see to your own development while supporting the growth of your company. The two are connected in a vital way and, should they get out of phase, dysfunction is almost guaranteed.

Your first step is learning to be an effective parent of a teenager who is eager to become a young adult – then an adult in their own right. If you are going to be the person that facilitates this perilous journey, you must see to your own intellectual and emotional growth. Central to this process is developing a new understanding of what your company has become and is becoming. It is not the five year old that you had become comfortable with. There is rebelliousness about it and an urge for growth and exploration that was completely alien to the youngster. There is a drive for dominance and an aversion to being dominated. You must come to see it as it is – not as you wish it to be. You can no longer tell it was it is – you must let it tell you what it wants to become. You can no longer tell it what it needs – you must let it tell you what it needs.

Beyond that you must develop the skills and understandings necessary to play an increasingly supporting role effectively. Your role as ‘god of the tribe’ is coming to an end. You need to come to see your company, its value proposition and needs, in an entirely new way. You must pay attention to what your teenager is becoming on the way to adulthood. And if you don’t give it what it needs … well ever had a frustrated teenager in the house?

Your company must traverse the storms and shoals of adolescence on the way to adulthood. As it does you will need to become less a father and more an advisor – you will have to become less a setter of the rules and more subject to them. There will be team members who know far better than you what is appropriate and effective in a particular situation. You need to give them the lead and follow that lead with the rest.

A company on a steep growth curve – like a teenager in the midst of full hormonal flush – needs parenting that has matured and adapted. As a CEO you cannot tolerate poor performance – either from yourself or from others. You need to raise your standards and expectations. You can no longer accept performance at prior levels.

The company is becoming potent in its own right and, as a result, can do more significant damage if it responds without discipline and careful training. Set the standards for performance and you will get what you accept. I saw a company die overnight because it lost its major source of business principally because the CEO could not bring herself to insist on a higher level of proposal development and review. The client, expecting a more professional proposal, was disappointed and went elsewhere. The company lost its base and reduced staff by 80% within the course of two months. It is no longer in business.

You must also redefine the corporate culture’s standards for measuring success. As the old saw goes, ‘amateurs practice until they get it right, professionals practice until they can’t get it wrong.’ You must professionalize your corporate culture and drive out the amateurish tendencies.

The good old days when good enough was acceptable are gone. You need to replace nostalgia for the good old days with professionalism and anticipation for the bright new future. In the past success may have meant winning a small purchase order – but now the chunks of business need to be larger and small purchase orders are a net loss for the company. Maybe in the past the Lone Ranger was the norm but now increasingly concerted and well coordinated group action is required. The town now has a school, a couple of churches, two or three banks – and the whore houses have been driven beyond the city limits. The Lone Ranger has become a liability.

Your company must cultivate, and put a premium on, open communication and pluralism. More than one perspective will be involved in most major decisions. People have to know that they not only have the right but the responsibility to contribute to debates that effect the company’s (and by derivation, theirs and your) future. I know of one company that rewards an employee for ‘saving our butts on that one’. As you company grows more and more decisions will have the potential of causing greater and greater losses if made incorrectly. A critical part of your role is to set the conditions so that all relevant voices are heard and considered.

I often tell clients that, as their company grows, they have to avoid avoidance. Companies fail every year because the founders have an aversion to talking about, let alone resolving, a particular set of issues. One of the most common is a founder who continually talks about taking the company to a hundred million but is really very comfortable with a run rate in the high teens. I call these ‘life style companies’. It is easy to recognize this person. They are usually high on one or another or the latest management theories, actively involved in one or another ‘CEO groups’ and busy moving the flatware around on the table. But over time you notice that nothing much is happening and the company seems to be languishing in a zone. So what are the names of the twin elephants in the room that the founder is so carefully avoiding? Most often they are ‘can’t delegate’ and ‘must control’. If you look carefully, the founder is acting as if the title CEO means chief of everything. The organization structure (no matter how hierarchical it looks on the org chart) is very flat. Look in the mirror. If this is you then you need to address rather than avoid.

But even if you evolve in the way your company needs you to, there are some things that you will never be able to give it.

Bring in Mentors: The great mythologist Joseph Campbell was fond of saying that “a father cannot be a mentor to his own son because they are both interested in the same woman.” Of course, Sophocles had a bit of a jump on him and that Greek playwright gleaned that bit of human wisdom from myths that were centuries old when he wrote Oedipus, Rex.[2] But the lesson applies to your relationship to your company as well. There are some things that you can’t do for your company and team. But those things need to be done – and you need to make sure that the right kinds of people are doing them.

Here, maybe a short story would help. Several years back I organized an annual all-hands retreat for a company. We took the entire crew on a three day Bahamas cruise.[3] We had over three hundred people in the group. Two of the days were at sea and the employees, management and board participated in a full schedule of meetings. The third day was on a private island. One of the organized events was a volleyball tournament. Teams were formed. I suggested to the CEO that he should not participate – let the rest of the group enjoy the event – but he couldn’t. The result was predictable – his team won and the employees got an experience that was closer to the work environment than a fun day of casual competition. Sometimes you have to step out of the picture and let the cruise director organize things for the rest of the team!

One lesson here is that your senior team will benefit from chances to work together to meet your standards better if they don’t have to beat you in the process. But a second, and far more important, lesson is that you can help your people succeed beyond their wildest dreams if you arrange for mentors – senior and very experienced resources – which they can connect with and learn from. This process begins with the very important realization that you are not the repository of all senior knowledge in the world and that others can mentor your people better. Once you are over that limiting delusion thinks can really begin to change for the better.

I build advisory boards as business development engines.[4] Their principal purpose is to allow a company to access decision makers at a much higher level and to pursue and win lucrative business in much larger chunks. But, early on, I noticed a side benefit of the boards. They were made up of five to a dozen very experienced and well connected individuals whose careers had spanned the entire range of challenges. During the early meetings of the board and as the members came into contact with the management team, mentoring relationships often began to develop almost at once. A CEO who was struggling with the problem of establishing a brand for his company was able to learn from an adviser who had build a very large and successful company from scratch. An SVP of business development learned about how his potential clients were really making their decisions from one who had been an insider for over a decade. A COO learned about best practices from someone who had spent decades perfecting them rather than a hired consultant who had a theory about how they should work. Over the years I have seen these kinds of things happen over and over again. Almost as if something that is lacking in our society at large is supplied by these mentors with astounding results. Here is the long and short of it: each of your senior people is going to benefit from a mentor in their field.

The experiences from this one coaching engagement could fill a book. One day perhaps they will. Over the three years that it lasted, we were able to restructure the company twice, significantly professionalize its corporate culture and massively improve its resourcing. The lessons learned – such as the ones described above – have been used over and over in subsequent engagements. I hope that they will prove useful to you.

© Dr. Earl R. Smith II

Related Articles:

• Balancing Work and Life
• Decisions, Decisions
• Yes You Can
• Extending Your Reach
• Making a Difference
• A Question of Identity

Dr. Smith is Managing Partner of The Federal Circle. The Federal Circle partners with teams and existing companies. We help them up their game and win big in the Federal space. We also arrange funding for acquisitions and expansion by acquisition. Our model is based on the belief that, if you select the very best and work with them in a highly professional and focused manner, the results will be truly amazing. He is the author of Amazing Pace: Turbo-charged Business Development – a book that shows how Advisory Boards can dramatically increase revenue. Dr. Smith is also the author of Dream Walk: Parables for the Living – a book of Raven Tales and exploration.

[1] This particular client was a strong family man. He and his wife had raised three kids who were in their mid-teens. Using his family experience helped him understand the complex challenges that his company was facing. Hence the heavy use of ‘family metaphors’ in what follows.
[2] By the way, before some of you get riled up about sexism, the same rule applies to the relationship between a daughter and her mother – only, in that case, they are interested in the same man!
[3] Now, don’t knock it until you’ve tried it. I have been putting groups on cruise ships for over a decade – everything from board meetings, to strategic planning sessions and annual all-hands retreats. It is higher impact, much easier to organize, far less expensive and by far easily the best way to organize these events. If you don’t believe me, send me an e-mail and I’ll prove it to you.
[4] There are several articles on this topic in the archive

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