Most entrepreneurs run their companies based on gut instinct. They are building their road map as they go along. Never knowing exactly what is around the corner, they address challenges as they arise and grow in a reactive instead of a proactive way. They simply don’t know what they don’t know. But that doesn’t have to be the case. There is a model for entrepreneurial growth that lays out exactly what issues a company will face and when. It’s called the Stages of Growth Model.
The Stages of Growth Model is a model for companies of 500 or fewer employees that was created based on the research of James Fischer. He studied 650 successful organizations over 6 years in order to uncover and define the patterns of growth that entrepreneurial businesses follow. Fischer has broken out enterprise growth into 7 different stages, each based on the number of employees a company has. Each stage requires a focus on different areas because each stage brings different challenges and has different rules that must be followed.
Based on his research, Fischer has defined 7 different areas of focus that change with each stage of growth. Those 7 areas are the Builder/Protector Ratio, the Three Gates of Focus, Leadership Modality, the Three Faces of a Leader, 27 Challenges, Leadership Styles, and the Non-Negotiable Rules. Each area of focus helps you show up as the right type of leader for your company in that specific stage of growth.
Let’s dive a little deeper into each of these areas.
Every Stage of Growth has an ideal ratio of Builders to Protectors. Builders are those that are focused on creating new ideas, taking on new initiatives, and finding new ways to expand revenue and profits. They challenge the way things are done and are very risk-tolerant. Protectors, on the other hand, are cautious, risk-averse, and may not feel confident in the company’s financial strength. Protectors are the ones that make sure the company has taken care of all the steps in one process before moving on to the next.
Some of you may be thinking: “Protectors sound horrible, we don’t want any of those.” They are extremely necessary. Without Protectors, Builders would run wild and the company would run out of money or resources before it even really had a chance to get off the ground. Protectors do just what their name suggests, they protect the company. From failing, from lawsuits, from bankruptcy. They check and double-check the numbers and the paperwork and all the minutia that Builders could care less about. But too many Protectors is also bad. The company would never move forward. It would stall out right where it is.
The key is finding the right ratio of Builders and Protectors for your company. You need to keep the company moving forward without being reckless about it. Have you been intentional about your Builder/Protector ratio? How could it benefit you and the company if you were?
Three Gates of Focus
The Three Gates of Focus, People, Process, and Profit, help you focus your attention on where the issue really resides, not just where you think it should be. This way you stop spinning your wheels trying to solve a problem by fixing the wrong thing. Actually finding and solving the root issue allows your business to move past that problem, and ensures that it never rears its ugly head again.
The hardest part of any problem that arises in the workplace is finding the root of the issue. It is incumbent upon you, as a leader, to find out where the true problem lies. Most managers jump straight to blaming people. However, if you’ve clearly communicated expectations, trained well, and hired properly, it’s usually not a People problem.
Take a few minutes to really think about your company’s most pressing issue. To which Gate does it belong? Are you sure? Could you see it belonging it one of the other two Gates?
Leadership Modality is all about presence. Understanding how your presence affects those around you is perhaps one of the more difficult aspects of being a CEO. However, it’s also a critical part of self-awareness and once understood, can tell you a lot about what might be creating obstacles to your company’s growth.
As the CEO, your presence within the company can either be Dominant, Facilitative, or Supportive. It’s the manner or modality in which you react to situations that can directly or indirectly affect and/or influence outcomes.
It’s important that you understand what presence you are bringing to the company, and recognize that your presence is a conscious decision that you assert, not only each and every day, but especially in times where your leadership is critical to the ongoing success of the company. What presence are you currently bringing to your company? How is that affecting those around you?
Three Faces of a Leader
As your company grows and evolves, so does your role as CEO. The Three Faces of a Leader maps out that transition showing you exactly what percentage of your time should be spent as a Visionary, a Manager, or a Specialist at each stage of growth. You may prefer to work within one of the three, but your company needs varying levels of each throughout its growth.
The Visionary is the strategist, the dreamer, the long-range thinker, the innovator, the leader who deals with the future and focuses on the theoretical foundations of the work. The Manager focuses on planning, order, and predictability. They are effective in organizing teams to get results and work to coach the staff to success. The Specialist is the doer, the technician who is driven to complete tasks and they excel with operations and the nuts and bolts of the enterprise. They are centered on results, not ideas.
Which Face are you using most often? Is that what your company needs from you right now?
Every company faces challenges as it grows. Some of these challenges are easily identified and some are not. Everyone has felt the same-problem-different-day déjà vu that comes with running a business. These same issues keep popping up because you aren’t solving the real, hidden challenges. Those issues that you can’t quite put a name to. These hidden challenges are the real issues that are keeping your company from growing in a healthy and sustainable way. The only way to move forward and continue to grow is to uncover these challenges. You’ve got to name them and claim them!
Fischer’s list of 27 Challenges condenses the hundreds of different issues that a company can come across into 27 easily defined challenges. You and your Senior Leadership Team can use this list to uncover the Top 5 Challenges that are plaguing your company. That way you can name them, claim them, and develop action steps to resolve them. You’ll be able to dig in and really understand the issues that are stalling your growth and solve them at the root.
Take a look at our 27 Challenges one sheet and see if you can pick out the Top 5 Challenges your company is facing right now. Which ones have you already conquered? Which ones do you think will arise in the next 12 to 18 months?
The Leadership Styles used in the Stages of Growth Model are the six Leadership Styles as defined by Daniel Goleman in his book “Primal Leadership”: Affiliative, Visionary, Pacesetting, Democratic, Commanding, and Coaching. It’s important to know the difference between these six styles because understanding that difference will help you determine when to use certain styles and when not to.
Some styles naturally bring people together and motivate a team, while others are more demanding and controlling. Each style has its pros and each has its cons, which is why it’s important to learn about each of the styles and understand where and when each style is most effective.
You can take our Leadership Styles self-assessment to determine what your go-to leadership style is. Then reflect on when that approach is most effective and when you might need to bring in another style.
For every Stage of Growth, there are 5 Non-Negotiable Rules. These rules are designed to help you focus on what is most important in each stage. As a company grows different areas need to be developed and nurtured at different times. These Rules draw attention to those areas at the right time. They help you realize where problems may arise and anticipate solutions to those problems. The Rules also give you a powerful language with which to discuss your issues and put a name to the growing pains that you and your company are feeling and change how you think about those issues. More importantly, though, they help you know how to react to those new issues. Each Rule lays out how to achieve success in that particular area, a list of action steps of sorts.
The title of “Non-Negotiable” may sound daunting, but they are just that, non-negotiable. These Rules cannot be ignored. They must be addressed for your company to efficiently move on to the next stage. What does not get taken care of in one stage does not simply go away once you move into the next. To create healthy, sustainable growth, you must attend to these Non-Negotiable Rules, or they will come back to haunt you.
The Stages of Growth Model is an invaluable tool for growing your company.
Not only does it lay out what a typical company faces throughout its lifetime, helping you know exactly what to expect around every corner, but the Stages of Growth X-Ray will show you exactly what specific issues your company is facing right now, You will create alignment within your leadership team of where you want to go and how to get there. Most importantly, you will learn how to grow your business efficiently and sustainably.