The Strategic Stage: 96-160 Employees: Organizational ReWilding® Rules for Business Growth (Organizational ReWilding® Rules for Business Growth: The 60-Minute Guide to Growth for Every Stage) 9798766306214

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Copyright © 2021 The ReWild Group All rights reserved The characters and events portrayed in this book are fictitious. Any similarity to real persons, living or dead, is coincidental and not intended by the author. No part of this book may be reproduced, or stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission of the publisher. ISBN-13: 9798766306214 Cover design by: Tehra Allen Library of Congress Control Number: 2018675309 Printed in the United States of America

Contents Copyright Introduction The Stages of Growth Gates of Focus Builder-Protector Ratio Modality Leadership Style Blend Three Faces of a Leader Non-Negotiable Rules Classic Challenges The Elements of an Exceptional Business Transition Zones Conclusion Further Reading About the ReWild Group

Introduction This series of guidebooks is written for business owners, by business owners. The concepts that are explained and illustrated are based on a methodology that has been developed across 30 years by studying more than 1,300 small and midsize businesses. Organization ReWilding is powerful, and it works … which is why we’re excited that you have this book in your hands. If you’re looking for effective solutions to help you navigate business growth, you’ll find them here. In order to help you get the most out of the book in a short amount of time, here are some basic guidelines and explanations. The book does not have to be read in order, although we do recommend beginning with Chapter 1, “The Stages of Growth,” as it lays the foundation for the rest of the content. After the first chapter, you can read straight through or skip around; the order is not critical to the understanding. Chapters 2 through 10 identify and explain the different dimensions of a healthy business. It’s helpful to think of these chapters as illuminating various facets of a diamond. Each facet is one way of looking at the diamond, but no one facet provides the full picture. In the same way, healthy businesses exhibit similar characteristics that can be viewed from different angles. When taken together, they create a complete picture of what a successful business looks like. Nearly every dimension represents an ideal for businesses to follow. For that reason, after the definition of each dimension, you’ll find a section that illustrates what happens when a business is out of alignment with the ideal. This brief example serves to cement the concepts that have been discussed and bring each dimension down to a more tangible level. To help you put the information to use immediately, there is also an application section at the end of each chapter. You’ll find three or four questions to help you reflect on the material and apply it to your

business, as well as a tip that you can carry with you. Download a free copy of the Stage 6 Workbook to record your answers (www.ReWildGroup.com/Stage-6). Every business owner’s journey is different, but that doesn’t mean you have to forge a path on your own. Glean valuable resources from this book and visit us online for even more: www.ReWildGroup.com.

The Stages of Growth Overview The Stages of Growth is a business growth methodology that has been developed over 30 years of ongoing research and observation of more than 1,300 small and midsize businesses across dozens of industries. The focus of this research is on understanding and deciphering the patterns, behavior, and characteristics of growth these businesses experienced. What we were trying to understand, and continue to investigate, is why some businesses successfully navigate growth and others don’t. At the core of this methodology is the reality that businesses are human ecosystems, comprised of complex, interrelated, dynamic components and relationships. These human ecosystems have an optimal condition in which growth can be achieved. What the research found is that complexity in an organization stems from the number of employees; not the industry or the annual revenue, but simply the number of people employed by a business. It follows, then, that as a business adds employees, it grows in complexity. A 10-person organization is different than a 200-person organization. The focus, the types of structures that need to be in place, and the opportunities for growth all look very different for these two businesses. Furthermore, the research identified seven distinct Stages businesses traverse. Each Stage spans a specific number of employees, and within each of these Stages, there are rules and ideals that must be in alignment in order to create the optimal environment for business growth. When a business fails to follow the rules of growth, it often gets stuck or regresses.

Without a clear model for understanding the growth of a company, most entrepreneurs don’t have the level of predictability necessary to survive over the long haul. There are simply too many doors to choose from to select the right ones at a high enough rate to keep the business advancing. At each new level of complexity, the changing rules make it more likely that the business will hit a wall or a dead end. The Stages of Growth provides a roadmap for the business leader. Organized by the key dimensions of a business, it offers clear guidance on the rules of growth for each Stage. Business owners benefit from the Stages of Growth by learning to diagnose where their business currently is, understanding what needs to be done to get the business where they want to go, and even predicting and proactively preparing for what comes next as the business grows. The power of the Stages of Growth is multiplied within an organization when it becomes a shared framework for the leadership and management team to communicate about growth. As team members begin communicating about key issues using the same language and understanding, the organization functions more smoothly. Following is a brief description of the characteristics of a company at each Stage of Growth. Stage 1: 1-10 Employees In Stage 1, a business is in the Start-Up stage, where things are small and agile. Making sure there is enough profitable revenue is

the name of the game, followed closely by finding the right people for the tight-knit group. Stage 2: 11-19 Employees In the Ramp-Up phase, processes become more important, and more structure needs to be introduced. Just as with Stage 1, the main focus is still on having enough profitable revenue to keep the lights on. Stage 2 is the last of the owner-centric Stages. Stage 3: 20-34 Employees As the first enterprise-centric Stage, delegation is crucial. Stage 3 represents the hardest transition for the owner due to the dramatic shift in their relationship with the business. Investing in the beginnings of an early-stage management team is critical to set up the business for future growth. Stage 4: 35-57 Employees In Stage 4, that early-stage management team needs to be professionalized, and that’s the name of this Stage – Professional. Whether an organization trains existing managers to the next level or hires outside professionals, this is a building block that cannot be missed for successful growth into further Stages. One of the most important things the professional management team does in Stage 4 is to work on the processes and systems of the organization. Leveraging their functional expertise, managers build the infrastructure that supports future growth. Stage 5: 58-95 Employees Stage 5 is all about Integration. The focused work the professionalized managers did in their respective departments in Stage 4 can often create silos. Stage 5 is where you bring those units together into an integrated management team. The management team begins to handle the heavy lifting of running the business—still with a great deal of oversight and guidance by the CEO. But this training ground is where the CEO will begin to develop their leadership team that will be needed in Stages 6 and 7. Stage 6: 96-160 Employees Stage 6 is Strategic. A business can often grow successfully up to Stage 5 with a strong team and effective operational processes, but Stage 6 requires a different level of strategic planning and thinking. The leadership team is handling more of the operational side of the business, with the CEO being less hands-on in those

areas. Maintaining company culture is critical in this stage, so a big focus is on people in Stage 6. Stage 7: 161-350 Employees Stage 7 is the Visionary stage. A visionary leader is needed throughout all the Stages of Growth, but Stage 7 is characterized by the need to recapture the innovation the company had in earlier stages to avoid becoming stagnant, stuck, or irrelevant in the marketplace. The leadership team that has been groomed and grown over the last stages is now contributing significantly to the strategic vision of the company. Each Stage of Growth has its own characteristics and priorities. Keeping in sync with each Stage’s ideals helps organizations sustainably grow and avoid becoming stuck. If an organization has missed prior Stage requirements, it must play catchup to reach the maturity of its current Stage. Failure to bring the organization into alignment with the rules of growth eventually causes an organization to stagnate, stall, or decline.

Stage 6 Stage 6 refers to an organization with between 96-160 employees. There are typically 17-26 managers and six to eight executives at this phase. As the Strategic Stage, a Stage 6 company must shift to a proactive, forward-thinking mindset. It needs to establish long-term plans in order to compete with its larger competitors and not be outpaced by its smaller competitors. People are a big focus for a Stage 6 company due to the increasingly large number of employees. Without buy-in from the staff, momentum will stall. The leader should be managing the Leadership Team and casting a strong vision to unite the company and move it forward. Stage 6 Anthem I am the leader of a Stage 6 company. We are in the Strategic Stage, where I need to be conducting a comprehensive overhaul of the company’s Business Model with the Leadership Team and creating a 5-year Strategic Plan, a 2-year Operational Plan, and a 2-year forecast by Revenue Group and Customer Segment. The Leadership Team runs the day-to-day operations of the company and is the organization’s driving force. People are once again top priority. To maintain a healthy company culture, we need to have the Leadership Team exemplify the Core Values, conduct an annual organizational health survey,

have a well-developed orientation program for new employees to become assimilated, and hold at least one company-wide unifying event a year. I need to challenge Operations teams to lower costs through the identification, acquisition, and implementation of advanced processes and systems. Business Development (Marketing, Sales, and Customer Service) needs to have an integrated system and synergistic strategy for generating revenue. Finance needs to implement a financial system that will support the company into the future. My business needs me to be a leader that sets the bar for success, fosters connectedness in the team, and instills pride in the organization. Stage 6 Application Before going any further, be sure to download the Stage 6 Workbook, a companion guide to this book. The workbook organizes your notes and answers to the application questions, helping to maximize what you get out of the book. Key Questions: Is your Leadership Team fully in charge of the day-to-day operations of the company? As the leader of a Stage 6 business, do you know how many employees you would like to eventually have? How are you planning for that growth in employees? Which lines from the Stage 6 Anthem can you relate to the most? The least? Tip: Celebrate the company’s wins at least once a year with an employee-wide event. ➢

Unity is a driving force that will carry your company forward. Make it a priority to bring the entire company together annually for a purposeful, unifying event.

Gates of Focus Overview All activity in an organization falls into three fundamental areas: People, Profit, and Process. Think of each of these as a door or gate behind which lies opportunities for the organization to grow.

At any given Stage of Growth, the patterns observed in growing businesses suggest that there is an ideal order of prioritization of these three Gates. Said another way, one of these three holds the greatest opportunity for growth in your organization, based on your Stage of Growth. People The People gate covers everything that affects the human resources of an organization. When you prioritize the People Gate of Focus, energy goes to the development and well-being of your employees. If you are improperly focused on People—meaning you are focused on People when your organization needs you to be focused on Profit or Process—you may find that your organization lacks the revenue or profit to grow, or you may find that your processes are not as mature as they need to be to handle existing or future volumes of business. Key question: When you’re faced with a decision, your first thought might be, “How will this affect my employees?” Profit The Profit Gate covers everything that affects the organization’s revenue and profitability. When you prioritize the Profit Gate of Focus, your energy focuses on activities that generate revenue and increase profits. If you are improperly focused on Profit, you may have disengaged employees and poor quality due to lack of process.

Key question: When you’re faced with a decision, your first thought might be, “How will this affect the company’s profitability?” Process The Process Gate covers everything that affects the manual and automated processes and systems used by the organization. When you prioritize the Process Gate of Focus, your energy goes to developing, refining, and testing processes and systems. If Process is an improper focus, you may find that your organization lacks the revenue or profit to grow, or your people may feel overlooked. Key Question: When you’re faced with a decision, your first thought might be, “How will this affect the day-to-day processes and the scalability of my business?” Prioritizing the Gates of Focus Each of these areas is important all the time. However, their ideal priority changes based on your Stage of Growth. The Gates of Focus can be likened to having multiple children. All are important, but your focus changes based on the child’s age and needs. Just because a newborn needs a lot of attention does not mean the older children are not valued. A teenager may require more energy than a 10-year-old. All the children are equally important, but there are times where one child requires more attention and focus. Similarly, all the Gates of Focus are important, but the optimal priority changes as your business grows. Keep in mind that most business leaders have a natural focus—a personal preference for one of the Gates. This area may be the one that comes easiest to the leader or is based on fundamental beliefs of how a good business is operated. While some leaders have been gifted with a talent for operations, others are skilled at engaging their people; others find prospecting and winning work to be second nature for them. As the business leader, it’s important to recognize the need to adjust personal preferences toward People, Profit, or Process based on what the organization needs for its current Stage of Growth. Businesses that fail to adhere to the Gates of Focus eventually experience the ramifications—plateauing, receding from prior heights, or oscillating between Stages. Sustainable growth is achieved when your organization stays aligned with each Stage’s Gates of Focus.

Gates of Focus in a Stage 6 Company

Stage 6’s gates of focus are People, Profit, and Process. Maintaining a healthy company culture is important with the number of people between 96 to 160, making People the top priority. A big part of an organization’s success of this size is the ability to successfully assimilate new people so they are engaged and effective at their assigned roles. By this stage, the company must be growing a Leadership Team that can take over responsibility of the day-today activities of the business from the CEO. The gap between the CEO and incoming employees has never been wider, which is why it’s so important for the layers of leadership to be acting together as a cohesive unit. Profit is second priority to ensure the company continues to produce the high levels of profitability required at this new level of complexity. The ability to generate profitable revenue should be less difficult than in prior Stages, since it is built upon a Business Development engine that is running like a well-oiled machine. While Process cannot be ignored, it remains third priority for this Stage. Process was the primary Gate in Stage 4; if an organization neglected to invest in Process at that time, it can face severe scalability issues in Stage 6. Business leaders embracing these Gates of Focus should be constantly thinking about how decisions will impact employees. Their energy should be focused on the development and well-being of their team. Gates of Focus Misalignment An engineering firm that is led by a very Process-focused CEO has grown to Stage 6. A civil engineer by trade, the CEO excels at his craft and has successfully built a business but tends not to focus much on his employees. Currently, his primary focus is on Profit. In order to meet the demand for the company’s services while keeping costs low, he decides to hire offshore engineers. By doing so, the company saves money on labor as well as overhead expenses such as office space. Working remotely, the new team members are not introduced to the company culture in a systematic way. The engineers in the office notice a difference in the quality standards of the new team members. Work is not being completed in a way that supports their premium brand. An “us versus them” mentality begins to develop between the on-site employees and the offshore workers. Concerned that their jobs are at stake, the engineers in the home office start

hoarding information, contributing to a further decline in overall quality. The CEO has failed to calculate the true costs involved with hiring offshore engineers. The arrangement works well on paper and initially supports the company’s bottom line, but the toll taken in terms of employee morale, culture, and quality of work will undermine the company’s long-term success. In order for the company to continue to offer the same quality of work in support of a strong, cohesive brand, the new employees must be trained and incentivized in a consistent manner across the board. Gates of Focus Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: Of the three Gates, which are you most naturally inclined to focus on? How is your business currently prioritizing the three Gates? Has misalignment impacted your business? If so, how? Tip: Focusing on People in Stage 6 ensures consistent, sustainable growth. ➢

The significant increase in employees during this period raises the potential for a company to lose its core identity.

Builder-Protector Ratio Overview The Builder-Protector Ratio measures the overall organizational mindset as it relates to the levels of confidence and caution within the company. It is captured as a mathematical expression—a ratio— of the relative confidence and caution the organization feels as a whole. Why is knowing an organization’s builder-protector ratio important? Because it provides valuable insight into a company’s health by: Measuring the company’s ability to meet and overcome its challenges Communicating the company’s willingness to perceive and take advantage of opportunities Gauging the strength of the company’s immune defense system, which acts as a barrier against low morale and poor performance Assessing the company’s willingness to embrace change Telegraphing the belief in the company’s future Conveying the company’s trust in its leaders

Builders tend to share certain characteristics. In general, builders: Are confident Say “yes” to new opportunities Are risk-tolerant and supportive of growth Like to improve the way things are done Function as the gas pedal of the organization

A Sales team often has a high concentration of Builders— individuals who quickly adapt to change and embrace growth.

In the same way, Protectors also tend to share certain characteristics. In general, Protectors: Are cautious Must be persuaded to say “yes” to new opportunities Are risk-averse and highly suspicious of growth Like to keep things the way they have always been done Function as a brake pedal and prefer to slow down the pace of change An Accounting Department may have a high concentration of Protectors—individuals who like having stable rules to follow and who double-check every action. Which mindset is better? Both the Builder and Protector mindsets have certain advantages and disadvantages. It’s useful to be aware of what those are and the possible ramifications of having too many of one or the other at any given time. If you have too many Builders, they will drive the company off the cliff with their foot still pressing the accelerator. An overly confident organization is constantly changing, moving, or chasing the next best thing. It fails to take the necessary time in critical thinking and focusing before jumping straight to execution. The organization’s offerings to the market can become unclear since they are constantly fluctuating. When an organization has too many Builders, it can sometimes grow itself out of business. If you have too many Protectors, they will eventually suffocate the company with their foot slamming the brake. An overly cautious

organization fails to adapt, evolve, and grow. The organization might miss opportunities because they are too hesitant to act. Its offerings to the market can become stale. When an organization has too many Protectors, it often stops growing and begins to retreat. Both extremes kill an organization. To thrive, an organization needs to properly balance the two mindsets at the appropriate ratios for an organization’s Stage of Growth. Determining the Builder-Protector Ratio of an Organization Developing an internal radar for the organization’s BuilderProtector ratio is important to keep the organization on the right track. One way to determine an organization’s Builder-Protector Ratio is to think about the organization’s overall mindset. A very confident organization will have a Builder-Protector Ratio of 4:1—four times the confidence as caution. An organization that has equal levels of confidence and caution will have a Builder-Protector Ratio of 1:1. A second way to determine an organization’s Builder-Protector Ratio is to look at the people in the organization. Consider how many have a Builder mindset and how many have a Protector mindset. An organization with 15 Builders and 5 Protectors converts to a 3:1 ratio—a confident organization. Another organization with 20 Builders and 10 Protectors would have a 2:1 ratio—a slightly confident organization. Individuals typically have a natural leaning towards being a Builder or a Protector. Despite having such an inclination, people are not stuck as a Builder or Protector. The leadership of the organization can help individuals adapt to what the organization needs by painting a clear picture of where the organization is going and explaining why additional confidence or caution is needed. The Builder-Protector Ratio Across the Stages of Growth It’s worth noting that, across the seven Stages, there is no time where the ideal ratio is dominated by caution—where Protectors outnumber Builders. In all but one Stage, organizations need higher levels of confidence than caution. Builders embrace change and improvement—two positive traits. But sometimes Builders don’t recognize the cost their confidence has on the organization. Their willingness to push change onto the company can create trauma that doesn’t benefit the business.

On the other side, Protectors look to protect current structures and advocate for using tried-and-true methods, which help to safeguard the company from unforeseen risks. But sometimes, Protectors don’t recognize the cost their caution has on the organization. Their reluctance to support new initiatives or embrace novel approaches can sap the strength of the organization, causing crucial market opportunities to be missed. Although different in many ways, Builders and Protectors share a desire for themselves and the company to be successful. By showing an individual how their level of confidence or caution contributes to that end goal, individuals can better align their mindset—helping the business to become better aligned with the Builder-Protector Ratio. Both Builders and Protectors can be encouraged to be more confident or more cautious through increased structure, clear language, and a shared vision. These things allow both Builders and Protectors to see the negative impact their over-confidence or overcautiousness has on the organization. If the organization has too much confidence for its Stage of Growth, increased structure, clear language, and a shared vision will slow things down and temper the confidence in the organization. For example, helping the Sales team focus on the company’s core services that already exist instead of pursuing new types of opportunities is a way to increase structure. The result is less change being forced on the organization. If the organization is overly cautious for its Stage of Growth, greater structure, clear language, and a shared vision for Protectors helps them feel assured about the company’s future. For example, providing a clear picture of what the future looks like helps Protectors at least lift their foot off the brake, allowing your organization greater forward momentum. An organization needs both Builders and Protectors. Each brings an important dynamic to the company. The objective is to have the right ratio of Builders and Protectors—the right blend of confidence and caution. Aligning your organization to the ideal Builder-Protector Ratio for your Stage creates the optimal environment for your organization to successfully navigate beyond the current Stage. Misalignment results in one of two suboptimal conditions: an organization allowing more change than it can absorb, or an organization with insufficient momentum to propel it forward.

Builder-Protector Ratio in a Stage 6 Company In Stage 6, the ideal Builder-Protector Ratio is 3:1, which means there is three times the level of confidence as caution in the organization.

This graphic shows that in Stage 6 the portion of Builders has returned to the same level as in Stage 2, indicating a very confident organization that is able to mature proportionately across all functional areas. The expanding number of employees drives an ever-increasing level of complexity, which requires the parallel support of an increasing level of confidence. Not since Stage 2 has the organization been so optimistic about its future and confident in its leadership. The willingness to pursue new market opportunities has returned, as has the ability to absorb necessary change. The Leadership Team is continuing to mature and expand its operational responsibilities. It now oversees an organization with strong departments that manage integrated budgeting and planning methods. A refreshed business model informs the vision, strategy, and operational structures of the company. Leadership’s communication through effective meetings ensures the staff have clear expectations and understand where the company is headed. The recruiting and onboarding process becomes increasingly important as the number of people in the company grows by fifty percent. Organizations that reach Stage 6 without an integrated, professional Management Team and a maturing Leadership Team are challenged to reach the level of confidence needed to successfully navigate this Stage. The lack of a strong Management

Team results in an organization that is uncertain about the company’s future. Leadership also needs to communicate a clear and compelling vision for the company, or they will fail to gain enough buy-in from the staff to maintain high morale. New hires should be immersed in company values and should understand the company’s vision and plan, so they feel connected to the company’s success. With a dominant Builder mentality, the accelerator is firmly pressed. In order to maintain momentum, the organization needs to safeguard itself against individual Protectors in key positions exerting too much influence and halting progress. Builder-Protector Ratio Misalignment As a non-profit organization, a disaster relief company relies completely on donations and fundraising to finance its day-to-day operations. The company has grown to 142 employees when its long-standing CEO decides to retire. The new CEO is ambitious and unafraid of change. With the backing of the Board, she proposes a change to their annual fundraiser. This major event drives more than 80% of their annual funds, but donations have been stagnant for the past three years. In order to galvanize a new base of donors, the CEO wants to try live streaming the event and focusing on social media channels to advertise and promote it. Despite her energy and enthusiasm, the Leadership Team is reluctant to move ahead with the changes. The VP of Marketing is especially averse to the idea of taking such a radical departure from the way they’ve always done things. What if they fail to attract new donors and lose the loyal base they’ve had for years? A company poll shows that the majority of employees feel the same way. People are attached to the company’s traditions and the risk of doing things differently outweighs the possibility of new growth. The CEO is in a challenging situation. Not only does her Leadership Team hold a Protector mentality, but the majority of the staff do as well. This is common when a company enters Stage 6, because typically new employees are joining what they perceive to be a stable company that can provide them with adequate compensation for a fairly predictable job. Such a mindset does not readily embrace change and is reluctant to “rock the boat.” The organization’s financial challenges are real, however, and must be addressed if it’s going to continue to provide the same quality and scope of disaster-relief services to its community.

Builder-Protector Ratio Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: What is the Builder-Protector Ratio in your organization? Which mindset comes more naturally to you, Builder or Protector? If the organization is overly cautious, what actions can the CEO or leadership team take to increase the organization’s confidence in the future. Tip: Be prepared to encounter resistance to major changes at this Stage. ➢ While your organization may be feeling confident about its direction, it’s natural for new employees to be cautious about change. That doesn’t mean change is impossible, but it will require more energy than in earlier Stages.

Modality Overview The term modality is defined as “a particular mode in which something is experienced or expressed.” For example, humans have five senses and each one (touch, taste, sound, smell, and sight) represents a modality of sensation. In the Stages of Growth, Modality refers to the role that each layer of the organization plays with respect to the overall organization. While the organization is a single unit, it contains different modalities that express its full function. The three Modalities, or roles, each organizational layer can play are Dominant, Supportive, and Facilitative. For a given Stage of Growth, each layer assumes an ideal modality for the organization. Dominant means the primary influencer. The layer that employs the Dominant role is the leading force of momentum in the organization to achieve the company’s goals. It is the key layer that must buy into what the organization is doing. Supportive means to help accomplish. The layer that employs the Supportive role acts as a helper towards the other layers. Facilitative means to make easier. The layer that employs the Facilitative role makes it easier for the other layers of the organization to accomplish the company’s goals. Let’s say you visit a doctor’s office. You meet three people during your visit. The receptionist checks you in and takes payment when you are done. The nurse guides you to the room, takes your vitals and initial information, and helps wrap up the visit. The doctor meets with you to review your symptoms, discuss options, and provide you a prescription. In this scenario, the doctor plays the Dominant mode and is the leading force and primary influencer of the other layers in the medical office. The Nurse represents the Supportive mode. The nurse helps the doctor and supports that layer of the organization. Finally, the receptionist is serving in the Facilitative role. This position helps makes things easier for the other layers of the organization by taking care of administrative functions. A second characteristic of the Modality dimension is that it applies to three layers of the organization: Executive, Manager, and

Staff. The Executive layer is the top layer of the organization and traditionally includes any C-level, Vice President, or Director levels. The Manager layer is the middle layer of the organization that oversees the bulk of the employees. The Staff layer makes up the remaining employees in the company, often accounting for 80% of the company’s people. Like the other Stages of Growth dimensions, there is an ideal Modality for each Stage. The rules for this dimension identify which Modality each organizational layer needs to embrace. One unique aspect of Modality is that it is the only dimension that does not change between every Stage—essentially, it is an organizational characteristic that is less dynamic than other dimensions. While it is important for an organization to be aligned with all three modalities, it is especially critical that the Dominant Modality be embraced by the appropriate layer. As the most impactful of the three modes, the Dominant Modality has the potential to cause the most drastic consequences if taken on by the wrong layer. Misalignment with the ideal Modality can dramatically impact an organization’s ability to sustain growth. If an organization is stuck, Modality is a good place to look for misalignment.

Modality in a Stage 6 Company In Stage 6, the ideal mode for the Executive layer is Dominant, for the Manager layer the ideal is Supportive, and for the Staff layer the ideal is Facilitative.

After several Stages with other layers providing the primary source of momentum or buy-in, the Executive Modality returns to the Dominant role. The difference now is that the Executive layer includes the Leadership Team, not only the top executive. This newly formalized layer serves as the driving force for the organization. The Manager layer returns to a Supportive Modality where it is helping the other layers accomplish the organization’s goals. In Stage 6, there are ideally 17 - 26 managers. Lastly, the Staff’s Modality is Facilitative, focused on making things easier for the other layers. The most common misalignment in this Stage is for the Manager layer to retain the Dominant modality. This typically occurs when the organization has failed to develop a Leadership Team that is comprised of key contributors from the Management Team. Creating a distinction between the Leadership Team and Management Team, while spending the required energy to develop these key individuals, is necessary for the Executive layer to re-establish itself in the Dominant mode and keep the organization growing with a shared vision. Modality Misalignment The CEO of a roofing company has always believed in keeping the organization flat. Even though the company now has almost 150 employees, it does not have a C-suite of executives. A Director of Operations and a Director of Finance serve in the top two positions; otherwise, the company is entirely organized around managers who head up a wide range of departments and teams. Though the company has been busier than ever, the CEO is surprised to review the financials and see that the increase in work is not translating to an increase in profit. As he digs deeper, he uncovers several projects and initiatives that have been stalled. When he questions the managers responsible, it becomes clear that there is a widespread lack of authority to make decisions. Whether it’s coming from other managers or the staff, decisions are constantly questioned and undermined. The managers complain that the CEO is inaccessible; as a smaller company, they used to be able to get his attention when needed, but now it’s almost impossible. The CEO is simply spread too thin. Feeling stuck, the managers have become more passive with the result that projects aren’t being completed at the same pace or to the same level of quality that they used to be.

Without a Dominant Executive layer, this organization has grown beyond the point of one person’s control. The CEO is no longer able to have daily touch points with key managers and important projects, leaving a vacuum in leadership. With no one trained to function in a clear leadership role, chaos and confusion dominate. Establishing a cohesive Leadership Team would help mitigate the bottleneck of work with the CEO and help managers have the support and direction they need to lead their teams and projects with confidence. Modality Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: In your organization, is it obvious who plays the Dominant role? Is there clear alignment between the CEO and the Leadership Team? How might you help the Manager layer embrace the Supportive Modality? Tip: Recognize that by delegating authority and working closely with your Leadership Team, you are expanding the capacity of your organization to comfortably grow. ➢ A clear hierarchy of authority empowers the leaders in the organization to make decisions and advance the company mission.

Leadership Style Blend Overview Leadership Style is a way of categorizing the various approaches of how the leader interacts with individuals in the organization. Organizational ReWilding Stages of Growth draws its Leadership Styles from research by Daniel Goleman, as documented in his book Primal Leadership. The six Leadership Styles are Affiliative, Coaching, Commanding, Democratic, Pacesetting, and Visionary.

The Principles of Leadership Style Before getting into detail about the six styles, it’s important for business leaders to understand that there are three fundamental principles of Leadership Style. 1.

2.

3.

First, every leader has a specific Leadership Style blend that is innate to them—it comes naturally. This blend is comprised of a leader’s top three styles and is known as the natural leadership style blend. Knowing your natural leadership blend provides insight into your strengths and weaknesses, which helps you to be a more effective leader. Second, there is not a single, “right” style of leadership. In fact, the ideal Leadership Style changes as a business grows. The size and complexity of the company demands a specific kind of leader for the organization’s optimal performance. Finally, leaders often struggle to adapt their natural style to meet the needs of the organization because they are unaware of the specific styles needed. Once they understand the ideal, most leaders are able to adjust how they lead to enable the organization to reach greater success.

Leadership Style is a unique dimension within the Stages of Growth framework because it deals with human connections. These connections between the leader and the people within the

organization can add or detract value; they can be a catalyst for growth or a source of stress. That’s why it’s so important for leaders to become aware of the ideal Leadership Style for their company’s Stage, and to adapt accordingly. The Stages of Growth identifies the ideal Leadership Style Blend for the organization’s top executive. This ideal does not apply to every leader or manager in the organization—just the top executive or leader of the company. Even though the ideal Leadership Style does not apply to leaders at every level, it’s still valuable for all business leaders to know their own natural Leadership Style to boost self-awareness. Having a common language across the organization provides managers with a framework to interact with their colleagues. Furthermore, if the organization needs a particular Leadership Style that is outside the top executive’s strengths, an option to close this gap is by leaning on another leader who has the needed style as a natural strength. In each Stage of Growth, there is an ideal blend of three leadership styles. This blend includes a primary, secondary, and tertiary leadership style that is optimal for that Stage. The Primary style is used most frequently; it is the prominent style for that stage. The Secondary style supports the Primary style; it is used routinely but is not as prominent. The Tertiary style is used occasionally in specific situations. The styles that are not identified in a Stage should be generally minimized by the leader during that time, as they are not the ones that the organization needs from the leader at that point of growth.

For example, in Stage 1, the organization needs a leader with a Leadership Style Blend that exhibits Visionary as primary, Coaching as secondary, and Commanding as tertiary. The blends can change dramatically from one Stage to another; as a result, leaders’ natural styles may work well in one stage but be ineffective in other Stages. The Six Leadership Styles Affiliative “People come first.” Affiliative leaders focus on creating harmony and building emotional bonds with the team. They recognize employees as people, putting less emphasis on accomplishing tasks and goals, which builds tremendous loyalty and strengthens connectedness. Affiliative leaders openly share emotions and value people and their feelings. When driving a team to reach its goals, Affiliative is right behind Visionary and Coaching as the most effective. Used to heighten team harmony, improve communication, and repair broken trust, this style is described as collaborative competence in action. As with every style, the Affiliative style has some disadvantages. It can be difficult to drive performance because of the emphasis on feelings versus tasks. It can allow poor performance to go uncorrected, and promote the perception that mediocrity is tolerated. With little feedback from an Affiliative leader, employees are left to grow and improve on their own. Coaching “Try it this way.”

Coaching leaders develop people for the future by communicating a belief in people’s potentials and an expectation they can do their best. They give feedback and instruction regularly and are willing to put up with short-term failure if it encourages long-term learning. Coaches help people identify their strengths and weaknesses, while helping align work with their career goals. By linking people’s daily work to long-term goals, coaches keep people motivated. Coaches are good at delegating—giving employees challenging assignments that stretch them versus just giving them tasks. This style works best with employees who show initiative and are looking for professional development. However, the Coaching style isn’t the right style to use if employees lack motivation or require excessive personal direction and feedback. Commanding “Do what I tell you.” The Commanding style is best used to bring a company out of crisis, to kickstart a turn-around, or to deal with problematic employees. A fire in the building would bring out the Commanding Style. Leaders who are naturally strong in this style excel at influence, achievement, and initiative. Sometimes called the coercive approach, Commanding leaders tend to demand compliance and don’t bother explaining the reason behind their actions or decisions. A Commanding leader exerts forceful direction to get better results and seizes opportunities in an unhesitatingly commanding tone. As for disadvantages, Commanding leaders tend to provide feedback by focusing on what went wrong. The Commanding Style should be used sparingly due to its tendency to erode people’s spirits, pride, and the satisfaction they gain from their work. Democratic “What do you think?” Democratic leaders forge consensus through participation. This style is most effective when used to build buy-in or to get input from valuable employees. Listening is a key strength of a Democratic leader. They sincerely convey that they want to hear an employee’s thoughts. As true collaborators who work as team members rather than top-down leaders, Democratic leaders know how to quell

conflict and create a sense of harmony. They are good at building trust and respect. This style works best when the leader is uncertain about what direction to take and needs ideas from capable employees. Even if a leader has a strong vision, the Democratic style works well to surface ideas about how to implement the vision. Over-reliance on the Democratic style can create endless meetings, where consensus remains elusive, and decision-making is frequently delayed. Overuse of this style can create a sense of confusion and a lack of direction, leaving people feeling leaderless and frustrated. Pacesetting “Do as I do.” Pacesetting leaders hold and exemplify high standards for performance. The Pacesetting style is effective when working with hard-charging sales teams, in technical arenas, and among highly skilled professionals. In these situations, the people require little direction, are highly motivated, and highly competent. Pacesetting leaders focus on how well something is done because of their need to continually find ways to improve. They set the bar for success and focus on exemplifying high standards in the organization. When the Pacesetting style is used with individuals who require more direction, it can come across as micromanaging and highpressure, leading to an erosion of confidence. The Pacesetting leader can constrict innovative thinking, which is why it should be used sparingly and with the right team. Visionary “Come with me.” Visionary leaders focus on mobilizing their people toward a vision. Vibrant enthusiasm is a hallmark of this style; it can strongly drive the emotional climate and transform the spirit of the organization. The Visionary style articulates where the company is going but doesn’t tell them how they will get there, allowing people the opportunity to innovate, think, and apply their own ideas. Through shared goals, people’s commitment to the organization grows.

People understand that what they do matters when the collective task is framed in terms of a grander vision. Visionary leaders are good at retaining talented people. They focus on igniting the spirit of innovation and instilling pride in the organization. They understand that distributing knowledge is the secret to the company’s success. The Visionary style is not effective, however, in situations where the team may be more experienced than the leader. It is also not effective when the organization needs to focus on the work being done, rather than heavily focusing on the vision for the future.

Leadership Style in a Stage 6 Company The ideal leadership blend for Stage 6 is Pacesetting, Affiliative, and Visionary.

A Stage 6 leader sets the bar for success, fosters connectedness in the team, and instills pride in the organization. Primary Leadership Style: Pacesetting Pacesetting leaders hold and exemplify high standards for performance. They set the bar for success for the Leadership Team

and staff. This clear example serves to motivate the Leadership Team to have high expectations that create momentum throughout the company. The company is too large for the CEO to impact everyone individually. Without the energy provided by a Pacesetter, the large number of employees in the organization can eventually become complacent, causing regression to earlier Stages. Secondary Leadership Style: Affiliative Affiliative leaders build tremendous loyalty and strengthen connectedness by recognizing employees as people. With the large number of employees in a Stage 6 company, it’s easy for employees to feel like “just a number.” That’s why it’s so important for the leader to find ways to connect emotionally with the staff. The Affiliative leadership style helps foster a strong bond of connection within the organization and helps secure staff buy-in for the company’s direction. Creating a harmonious environment where employees feel valued is critical as the organization continues growing. Tertiary Leadership Style: Visionary The Visionary leader guides the team and the company with a strong vision. It’s important to instill pride in the work that is accomplished through a shared vision. Ensuring the Leadership and Management Teams understand the vision and are committed to its fulfillment is what will make the Stage 6 organization successful. The most common misalignment in Stage 6 is a leader who does not adopt Pacesetting as their primary style. When Pacesetting is not part of the Stage 6 leader’s blend, the organization fails to keep forward momentum, which is becoming a larger challenge as the size of the organization grows. Flat revenue growth over a prolonged period is a sign that the organization has become stagnant and needs a Pacesetting leader to set the bar for success. The second most common misalignment is an under-emphasis of the Affiliative style. The growing organization creates an increasing challenge in creating a strong bond with employees. Individuals can feel lost in this size of company. A leader who emotionally connects with the staff will generate employee buy-in with the company’s future. This lack of Affiliative style can be created by an over-emphasis on the Commanding style, which is no longer effective once the

organization reaches Stage 6. Leadership Style Blend Misalignment A company that makes promotional materials with branding specific to the client has grown to 127 employees. The CEO has always been a big champion of getting consensus from his employees. The emphasis he puts on valuing people’s opinions and ensuring that everyone’s voice is heard has served him well over the years. His team is loyal and enthusiastic, and the office has an energetic atmosphere. The company is facing a decision as to whether it should expand to include a new product line. They have historically made apparel and personal-use items like pens and travel mugs but are considering branching out into outdoor banners and signs. The CEO insists that everyone vote on the initiative. Consensus is in favor of the new products, so they move ahead. After only a few months it’s clear that the decision was a mistake. The new line took a greater investment of time than expected and sales are dismal. Through a second poll, as well as conversations with many of his employees, the CEO realizes that many of the people who voted “yes” didn’t have the perspective and understanding they needed to make a well-informed decision. Instead, they just voted because they had to. Because he’s unwilling to give up the Democratic leadership style, the CEO has made a poor decision that negatively affects the company’s health. His intention in wanting to hear from everyone is a good one but fails to account for the significant growth his company has experienced. As more staff are coming onboard into areas of specialization, most do not have a broad enough perspective on the business for their input to have valuable consideration for strategic decisions. Leadership Style Blend Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: What is your natural Leadership Style Blend? How does the ideal Leadership Style Blend for a Stage 6 business benefit your team? If your natural style does not align with the ideal style for a Stage 6 business, are you willing to adapt? If so, how?

Tip: Make the long-term health of the company your first priority. ➢

Although your natural leadership style may not match the ideal for a Stage 6 business, keep in mind that the needs of the company will change as it grows, and your ability to adapt will play a big part in ensuring its success.

Three Faces of a Leader Overview The Three Faces of a Leader measures the proportion of time and energy a leader spends embodying the three primary leadership roles, or faces, within an organization. The Three Faces are Visionary, Manager, and Specialist.

Research tells us that for each Stage of Growth, there is an ideal allocation of energy between these three faces. Said another way, at each Stage of Growth, the organization needs the leader to spend different portions of time wearing the Visionary Face, the Manager Face, and the Specialist Face. The Visionary Face The Visionary Face understands the importance of providing a compelling vision for the organization. When leaders put on the Visionary Face, they are guiding the organization toward a vision of the future. This begins with spending time in critical thinking to intentionally architect the business. The resulting business design then informs the vision of the company—a vision the leader must spend time clearly communicating to the organization. By helping the staff see how the daily work contributes to the bigger picture, the leader ensures the organization will generate the momentum needed to make the vision a reality. In early Stages, the leader communicates the vision directly with the staff. In later Stages, the leader must impart the vision to the Leadership and Management Teams, who are responsible for connecting the staff’s daily work to the long-term vision. In general, the larger a company gets, the greater proportion of time needs to be spent wearing the Visionary Face. In these later

Stages, the leader is no longer doing the work but leading the team with a vision that is connected to the organization’s activities. The Manager Face The Manager Face understands the importance of managing the people and the work. When leaders wear the Manager Face, they are involved in the supervision of the work or the people overseeing the work. The Manager Face includes time and energy spent coaching individuals toward greater levels of effectiveness. In early Stages—with few people and less organizational complexity—this face requires less of a leader’s time. As the organization grows, the leader needs to spend considerable time wearing the Manager Face. The allocation of time to the Manager Face is especially important during Stages 3 through 6 as the leader expends energy in growing the Management Team and eventually a Leadership Team. The Specialist Face The Specialist Face understands the value of being actively involved in the work of the company. When leaders wear the Specialist Face, they are creating products and delivering services to customers. They apply their personal expertise in development of the company’s offerings to the market or play an important part in business development. The Specialist Face also encompasses the time spent formalizing, improving, and refining the processes and systems that facilitate the company’s work. In early Stages, leaders focus a great deal of time on wearing the Specialist face—they are contributing significantly to the overall output of the organization. As the organization grows, the leader spends less and less time wearing the Specialist Face as newer team members take on that role. Yet, in every Stage, it is important that the leader maintains some time wearing the Specialist Face to benefit the organization from his or her expertise and stay in touch with the day-to-day realities of the organization. Examples of the Three Faces The Restaurant – First, let’s see how the Three Faces look for the leader of a restaurant. She wears the Visionary Face when she inspires the team to achieve extraordinary customer service by painting a clear picture of what true hospitality looks like. She has clearly set the vision for the organization and communicates it regularly.

That same leader is wearing the Manager Face when she is training the front-of-house staff on how to greet guests, take customer orders, and deliver plated dishes. Here, she’s not doing the work, but is training, directing, and leveraging this work to others in her organization. Finally, this restaurant leader is wearing the Specialist Face when she is the head chef in the kitchen on a Friday night, preparing dishes and running the kitchen. As the restaurant grows, the proportion of time this leader spends wearing each of these faces should change to be in alignment with the ideals for the restaurant’s Stage of Growth. The Manufacturing Company – Next, we’ll consider the CEO of a manufacturing company. When he sets the company on a path of continuous improvement, the CEO is wearing the Visionary Face. This is a vision he ties to the day-to-day work of every level in the organization. Wearing the Manager Face, the CEO interacts daily with his direct reports about the projects in each of their departments to ensure they have sufficient direction and resources to meet agreedupon goals. The CEO wears the Specialist Face when he rolls up his sleeves and gets involved in fixing the malfunctioning equipment on the shop floor to ensure they stay on schedule with customer orders. As with the example of the restaurant leader, the CEO can expect to wear the faces differently over time as his company grows. For many leaders, misaligned allocation of time is caused by a tendency to emphasize the faces they are most comfortable wearing. When a leader aligns their energy to the ideal Three Faces of a Leader allocation, their organization is better positioned for growth.

Three Faces of a Leader in a Stage 6 Company In Stage 6, the leader is ideally spending 45 percent of their time and energy wearing the Visionary Face, 50 percent wearing the Manager Face, and 5 percent wearing the Specialist Face.

Stage 6 is essentially equal parts providing the vision for the company and managing leaders in executing on that vision. The leader is still spending half of their time and energy wearing the Manager Face; yet Stage 6 marks a distinct change from prior Stages in how the Manager Face is worn. The leader shifts from managing managers to managing leaders who are managing managers. Those managers in turn are overseeing the staff and the work. In the same way that the leader developed, trained, and hired strong managers in prior stages, they must now focus on developing, training, and hiring a strong Leadership Team. The Stage 6 leader is spending almost an equal portion of time and energy wearing the Visionary Face. For the first time in the Stages of Growth, the leader must guide the Leadership Team to create the vision for the organization. A clear vision can then be communicated by the Leadership Team to the managers, who then communicate it with the staff. The sheer size of the organization makes it critical for the Leadership Team to tie the big-picture vision back to the daily work being performed by the organization to maintain staff buy-in. The Specialist Face should only occupy 5% of the leader’s time and energy. While this is the face least worn by the leader, it is no less important. The leader still has experience that can benefit the organization. Furthermore, a leader who is too far removed from the organization’s business risks losing touch with the on-the-ground reality. This creates a blind spot that can lead to poor strategic decisions and a loss of trust from the staff.

The change from Stage 5 to Stage 6 can be especially difficult for a leader who is also the founder of the company. By this point, the founder is long removed from the daily operations of the organization and may not enjoy the role of leading so many people. In fact, a founder’s inability to align themselves to the Three Faces of a Leader is one of the reasons it is common to bring in a professional CEO in Stage 6. The common misalignment in this Stage comes from a leader who wants to maintain a higher allocation to the Manager or Specialist Faces, not wanting to give up operational oversight, which can result in a frustrated Leadership Team that wants to take on more responsibility. The leader’s insistence in staying active in management means there is not enough energy being spent on the Visionary Face. More than ever, the business needs its leader to be working on the business regularly, spending time in critical thinking, and painting a clear vision for the future. If the leader insists on staying active in operations and fails to generate a compelling vision that unifies the Leadership Team, the organization may experience retention issues in this key layer of the organization. Three Faces of a Leader Misalignment The CEO of a third-party food manufacturing company has successfully led his company to Stage 6. As the original founder, he has always been a strong manager—good at keeping costs low, people happy, and the machines working smoothly. Lately, though, business has begun to stagnate. A large conglomerate has acquired from their customers some of the products they manufacture, including a flagship BBQ sauce that the company has produced for decades. As the company looks to him for direction as to what to do next, he finds that he’s unable to come up with a solution. His impulse is to double down on what he’s good at—overseeing operations—but that no longer seems sufficient. In talking to his business coach, the CEO can understand that the company needs a compelling vision and more strategic planning to adapt to the changing marketplace and the new demands of the day. Recognizing that he can’t be the person to provide that vision, the CEO decides to hire an outside CEO who has demonstrated strong visionary abilities and to take on the role of President. This CEO recognizes that despite the success he’s been able to achieve, his inability to create a strong vision for the future is impacting the organization’s health. By hiring a CEO with the track

record of being able to provide a vision for a mature organization, he is meeting the company’s needs and giving it an opportunity to keep growing. While other leaders in his position may choose to develop the necessary visionary skills or augment their abilities with a consultant or coach, the key is that the CEO is finding a way for this misalignment not to become a barrier to growth. Three Faces of a Leader Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: Which of the Three Faces do you naturally wear most often? How does that align with the needs of a Stage 6 business? Are you investing in your Leadership Team to prepare them for growing the business into Stage 7? Tip: Talk to your team. ➢ If you’re not sure which of the Three Faces you wear most often, ask your team. Have individual conversations with your direct reports to find out their perspective on the amount of energy you are spending on each of the faces, and how misalignment with the ideal allocation is impacting them.

Non-Negotiable Rules Overview The Non-Negotiable Rules are a powerful dimension within the Stages of Growth. They define the laws that a business must follow in order to be successful. The fact is that every natural system, whether it is a forest or a commercial business, succeeds by aligning itself to fundamental natural laws that establish order and balance. The Non-Negotiable Rules cover six foundational areas of a business: Business Development Business Model & Plan Finance Leadership Operations Workplace Community The rules are spread across these six areas because a business needs to be growing proportionally across them. Often, a business will focus more energy on some of these areas, causing an unbalanced ecosystem. Eventually, the rules ignored create pockets of weakness that can cause the business to lose momentum or retreat. Unlike the other dimensions, the Non-Negotiable Rules dimension exhibits a cumulative effect. This means that your organization needs to pay attention to not only rules for your current Stage, but also prior Stage rules. In a sense, Non-Negotiable Rules serve as graduation requirements to successfully move from one Stage to the next. To sustain growth, an organization needs to be at least 80% complete with the rules that are relevant to your current Stage. Now, this doesn’t mean that it is impossible for an organization to grow past a Stage if the necessary rules haven’t been completed. Rather, if you don’t complete rules before moving on to the next stage, they stick around to haunt you. They weigh on the organization, creating a stronger and stronger headwind for the company. After all, they are “non-negotiable.” Adhere to the rules that are active for your Stage—which includes the current Stage’s rules and prior Stage rules that have not been superseded—or pay the price in the form of low productivity,

poor financial performance, and the possible demise of the organization. There are two ways to meet the guideline of 80% completion. The first is to complete 80% or more of the rule. For example, a rule in Stage 2 is that the leader must “develop three supervisors to be responsible, accountable, and proactive.” This can be evaluated as to whether the leader has achieved at least 80% of what this rule requires. The second way is to evaluate by frequency. For example, another Stage 2 rule is to communicate all directions in writing. The progress on this rule can be evaluated by frequency—is the leader communicating directions to the team in writing 80% or more of the time? The Non-Negotiable Rules are like gravity—they exist whether or not you acknowledge them. Failure to address these rules will negatively impact your business. Being aware of the rules required in your Stage of Growth and taking action to address them is necessary to sustain growth. For many organizations that stall or retreat from their heights of success, the loss of forward momentum can be traced directly to the failure to take care of these graduation requirements. This dimension, as mentioned earlier, is unique in that the rules accumulate across Stages. One implication of this is that organizations that are caught up on the rules for the current Stage can proactively begin to work on future Stage rules. Getting ahead of the game on Non-Negotiable Rules allows organizations to transition more gracefully into the next Stage.

The Non-Negotiable Rules at a Stage 6 Company The Non-Negotiable Rules that are relevant for Stage 6 are organized by the six areas of business. These are Business Development, Business Model & Plan, Finance, Leadership, Operations, and Workplace Community. A business that consistently completes the Non-Negotiable Rules across all six areas for its Stage will ensure the organization is growing proportionately in these fundamental areas. If the rules are ignored, certain areas of the business will mature more than others. Often the areas of strength are where the business leader is strong, and the areas of weakness reflect areas where the business leader lacks interest or experience. An organization should

be 80% complete with the rules to be prepared to graduate to Stage 7. Business Development Ensure Marketing, Sales, and Customer Service win as a team with a synergistic strategy for generating revenue. Use an integrated CRM system for Business Development. In the area of Business Development, a Stage 6 business should have identified Brand Values that define the promise to the market. These, in addition to Customer Segments, guide Business Development strategy and inform the structures in this area of the organization. The three functions of Business Development – Marketing, Sales, and Customer Service – should be led by strong managers who collaborate through a shared process. In Stage 6, these three areas should win as a team, with a synergistic strategy. Using an integrated CRM will facilitate the success of Business Development as a whole. While the distinction between the three Business Development functions provides clarity, it can also contribute to siloed thinking. Business Development must understand that success comes as a team—when the department generates the revenue needed by the organization. Business Model & Plan Conduct a comprehensive overhaul of the company’s Business Model with Leadership Team producing a 5-Year Strategic Plan and a 2-Year Operational Plan. In the area of Business Model and Plan, a Stage 6 organization should be reviewing margins every quarter by Revenue Groups and Customer Segments. The Leadership and Management teams should be using an Operational Plan to conduct interdepartmental planning quarterly. In Stage 6, the Leadership Team should conduct a comprehensive overhaul of the company’s Business Model. This produces a 5-Year Strategic Plan, outlining the organization’s strategy for the next 5 years, and a 2-Year Operational Plan that establishes goals for the next two years. The Leadership Team is once again critically examining the company’s Business Plan to adjust for market realities. Forcing this

team to think further into the future encourages the team to keep the company’s strategies fresh and relevant. Finance Develop a 2-year forecast by Revenue Group and Customer Segment. Implement a Stage 7 financial system. In the area of Finance, a Stage 6 organization should have completed prior rules to make sure every employee contributes to a KPI and knows how the company makes and keeps money. As the organization grows a strong management team, the department heads should develop and account for an annual department budget. Each department’s budget should be integrated into an enterprisewide budget. In Stage 6, a financial forecast should be developed that encompasses Revenue Groups and Customer Segments. To facilitate this, a Stage 7 financial system should be in place with the capabilities to support the organization’s financial management and reporting needs up to the point it reaches 350 employees. In addition to budgets, the company needs to be projecting revenue two years out based on its Business Model. This exercise creates accountability and encourages critical thinking, focus, and planning. Leadership Leaders and managers demonstrate Core Values daily. Leadership Team runs the company on a day-to-day basis. Leadership in the later stages is focused on developing a strong Leadership Team. Such a Leadership Team communicates with all employees, is interdependent and execution-focused, and demonstrates Core Values daily. In Stage 6, the Leadership Team should be running the company on a day-to-day basis. The owner or CEO should be guiding the team with strategy and vision, rather than being involved in the dayto-day details. An effective Leadership Team allows the CEO to begin shifting away from daily responsibilities toward envisioning the company’s future. Operations

Task departments to lower costs by identifying, acquiring, and implementing advanced processes and systems. In the area of Operations, the Organizational Structure should have been revamped and all employees must understand their positions and roles. The organization should also ensure Operations is organized around the company’s three Revenue Groups. To maintain profitability, company production capacity must be between 70 – 80%. Master Processes need to be identified and implemented with the Management Team. In Stage 6, these Master Processes are foundational in helping departments by identifying, acquiring, and implementing advanced processes and systems that help lower operating costs and make the business more scalable. Stage 6 businesses with immature Operations will experience falling profitability, poor quality, and unsatisfied customers, allowing nimbler competitors to take away market share. Workplace Community Revitalize onboarding program that immerses new hires into company culture and processes. Conduct annual organization health survey and companywide unifying event. Workplace Community in Stage 6 relies on Core Values that were established in earlier stages. These Core Values should be incorporated in a company-wide program that expects, supports, and rewards the demonstration of these values. Strong departments that use a common project management process must be established. To keep the staff engaged as the company grows, the organization must ensure all supervisory positions are regularly conducting One-to-One Meetings with their direct reports. This is an important structure from the CEO all the way down to the supervisor level. With the larger number of employees in Stage 6, 3% of gross revenue should be invested in their development. Some of that investment can be allocated towards conducting an annual organization health survey and company-wide unifying event. The onboarding program that immerses new hires into company culture and processes should be revitalized to ensure it meets the needs of the larger organization.

Constant energy will be required to protect and maintain the company culture and Core Values as the number of employees dramatically increases in this Stage. Non-Negotiable Rules Misalignment A successful franchise of garage door installation and repair services has been struggling the past year. Although new home construction is booming and the real estate market is strong, revenue has been flat. Members of the company’s advisory board gathered independent input from various consumers in the market, and the consensus is that the company’s products are stale and marketing does not resonate. While competitors are offering smart home packages that are compatible with their products, this company hasn’t yet made a move in that direction. The Leadership Team is initially unwilling to concede that they have missed an important trend in home building with the move towards integrating technology. They look for other factors to explain the flat revenue. However, as the CEO investigates further, she realizes that their strategy has essentially remained the same for several years. The only future plan in place is to repeat what worked for them the previous year. This company is experiencing the negative effects of neglecting its Business Model & Plan. Having relied on momentum year-toyear to carry them through, they do not have a strategic plan in place that can guide them when momentum fails. In this reactive mindset, they’ve failed to notice market trends that would affect their business and are only taking them into account after the fact. The CEO can turn things around by bringing her Leadership Team together to create a new Business Model that will unite them with a common language and purpose and provide much-needed energy and focus to the entire company. Non-Negotiable Rules Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: Are you at least 80% complete with all Stage 6 NonNegotiable Rules? Are there any rules that you’ve completely neglected?

What can you do in the next 3-6 months to make progress in all six foundational areas of business? Do you think your business is being held back because you missed some of the rules of a previous Stage? Tip: Don’t worry about perfecting any one rule at the expense of making progress on other rules. ➢ Keep in mind that you need to be at least 80% proficient in all six areas before moving to Stage 7 to ensure a smooth transition and avoid the headwinds created by incomplete rules.

Classic Challenges Overview Classic Challenges are the top five challenges businesses typically face in each Stage of Growth. The research has identified 24 unique Classic Challenges, some of which appear during more than one Stage.

Awareness of the Classic Challenges doesn’t mean that the business can avoid them altogether; many are an inevitable factor of growth. There are several advantages, however, to knowing what they are and when to expect them. Advantages to Being Aware of the Classic Challenges 1. 2. 3. 4.

When the challenges are more quickly recognizable, they can be dealt with more efficiently. A common language and understanding of the challenges facilitate alignment within the leadership and management teams. Future challenges can be prepared for in advance rather than reacted to in the moment. It’s better to face an enemy you know than one you don’t. Simply placing a name on the challenge goes a long way toward knowing the enemy.

Unlike other dimensions, the Classic Challenges dimension does not reflect an ideal but rather lists the challenges most frequently experienced during a specific Stage. As such, the organization is not

expected to align itself with the challenges listed for a Stage but can reasonably expect to face them. Classic Challenges and the Elements The Classic Challenges often represent surface symptoms of deeper, underlying issues. Recognizing the challenges is an important first step to determining which of the Elements need to be infused into an organization to facilitate growth. For example, say your team is struggling with employee retention, which they identify as the Classic Challenge of Employee Turnover. The Stages of Growth methodology links this challenge to the underlying Elements that most commonly resolve it, which are: clear Brand & Core Values, intentional Organizational Structure, a consistent One-to-One Process, and a Strong Management Team. With the link between Classic Challenges and Elements, the team can take specific actions to resolve the challenge in such a way that addresses the underlying issue, achieving greater long-term health for the organization.

Classic Challenges in a Stage 6 Business In Stage 6, businesses are typically struggling with these five Classic Challenges: Hiring Quality People Ineffective New Staff Orientation Lack of Staff Buy-In Staff Satisfaction Not Linked to Company Success Weak Business Model In this section, we’ll look at each of these challenges in more detail. Hiring Quality People An organization that suffers with hiring quality people typically shows these symptoms: open positions remain unfilled, requirements for identifying good candidates are unclear, or new hires are not qualified to perform the work. A Stage 6 business has two or three times as many employees as the prior Stage. Hiring the people to enable this massive growth is

always difficult, but can be even more challenging when labor markets are tight. A company that distinguishes itself with clear, compelling values becomes a magnet to people looking for a rewarding place to work. To help mitigate the challenges in hiring quality people, a Stage 6 business should look at these key business elements: Establishing clear Brand & Core Values helps the company attract the types of candidates it wants to hire. Improving Master Processes, such as recruiting and onboarding, helps boost the effectiveness of the key processes. Establishing clear roles and responsibilities through Organizational Structure empowers recruiters to locate the right types of candidates and lets interviewees know what is expected of the position. Ineffective New Staff Orientation An organization that struggles with new staff orientation typically shows these symptoms: new employees are struggling to get up to speed, new employees complain there is no staff training, or there are quality issues involving new staff. As the organization hires additional staff, it’s important that they go through a structured onboarding process that produces new hires who understand the company’s values and processes. To help mitigate the impact of ineffective new staff orientation, a Stage 6 business should look at these key business elements: Establishing clear Brand & Core Values sets expectations for new staff on how to interact with team members and customers. Identifying and documenting Master Processes allows new staff to be trained to properly do the work. Establishing Organizational Structure, which organizes the work independently of the people, clarifies roles and responsibilities for new hires so they can quickly become effective for the organization. Developing a Strong Management Team equips leadership with the skills, tools, and mindset needed to oversee the training and supervision of new hires.

Lack of Staff Buy-In An organization that has a lack of staff buy-in typically shows these symptoms: the staff isn’t confident in leadership or the future vision, employees question management, or there is low staff morale. The large number of people that are part of a Stage 6 organization make it difficult to ensure everyone understands and believes in the vision of the company. Without such buy-in, there is a risk of employees leaving. To help mitigate the lack of staff buy-in, a Stage 6 business should look at these key business elements: Establishing a clear promise to the team through Brand & Core Values serves as a unifying force for the employees. Adopting a Business Growth Framework provides the team a common language to discuss and communicate about how the business will grow. Creating cohesion between departments through Interdepartmental Planning helps staff buy into the bigger picture. Implementing Meeting Structures improves the effectiveness of meetings, facilitates communication, and encourages collaboration. Practicing consistent, two-way communication between employee and supervisor through a One-to-One Process provides an avenue to reinforce the company’s direction and address employee concerns. And developing a Strong Management Team facilitates effective communication with the growing number of new employees. Staff Satisfaction Not Linked to Company Success An organization that does not see staff satisfaction linked to company success typically shows these symptoms: staff is overworked and burnt out, employees want different things than what the organization needs for success, or the company’s emphasis on profitability leads to unsatisfied employees.

A Stage 6 organization is large enough that individual employees can feel like “just a number.” When this happens, it’s difficult for them to link their satisfaction to the overall company goals. To help mitigate staff not connecting their satisfaction to the company’s success, a Stage 6 business should look at these key business elements: Establishing clear Brand & Core Values unites the staff in its pursuit of overall success. Creating cohesion between departments through Interdepartmental Planning helps staff not be stuck in a silo mentality. Establishing Key Performance Indicators to which every employee is connected shows individuals how their work contributes to the organization’s success. Practicing a One-to-One Process ensures employees routinely hear how their work impacts their department and the company. Weak Business Model An organization that struggles with a weak Business Model typically shows these symptoms: it’s unclear who the target customer is, low profitability, or product offerings have become stale or lack innovation. Leading up to Stage 6, the business leader needs to be investing in key managers and developing them into a Leadership Team. In Stage 6, the business leader and this Leadership Team need to refresh the company’s Business Model to ensure it reflects market realities. The critical thinking and focusing encouraged by the Business Model review will breathe new life into the strategies and structures of the organization. To help mitigate a weak Business Model, a Stage 6 business should look at these key business elements: Involving the Leadership Team in critically thinking about the company’s Business Model helps create a more resilient organization and leads to greater buy-in to the strategies selected. Using the Business Model review as an opportunity to develop a Strong Management Team creates leaders with a

shared vision and common language. Connecting the Classic Challenges and their surface symptoms to a root cause helps a business leader be less reactive and more proactive at addressing the source of the challenges. As a company looks at the challenges they are facing, it’s important to understand that a single business element can help mitigate several challenges. Brand & Core Values, for example, can mitigate four of the five Classic Challenges: Hiring Quality People, Ineffective New Staff Orientation, Lack of Staff Buy-In, and Staff Satisfaction Not Linked to Company Success. Unlike other dimensions of the Stages of Growth, the Classic Challenges do not represent an ideal, but rather the challenges that are most typical for a company of that size. Businesses that have stayed at the same Stage for many years often have resolved the underlying causes of that Stage’s typical challenges. Therefore, they may experience challenges that are classically seen in later Stages. Other organizations find that their most impactful challenges are primarily from earlier Stages. This is indicative of an organization that has functions that have not kept pace with its overall growth. Classic Challenges Example A medical supply company has acquired a contract with a major hospital in the past year, leading to a significant increase in its number of employees. The company provides medical supplies to doctor’s offices, clinics, and hospitals. Some of the supplies are large pieces of equipment that stay in place, but many are disposable products that need to be replenished on a regular basis. Delivery drivers are a major contributor to the company’s success and are one of the positions they’ve hired many new employees for in order to fulfill the new contracts. After a few months of servicing the new hospital, the company sees a downward trend in the volume of orders. While orders are being fulfilled in a timely manner and customers are receiving their supplies, there’s a decline in the amount of new or additional items being ordered. Upon closer investigation, the Leadership Team discovers that the new delivery drivers aren’t consistently following company procedures, which include checking in with the office contact to discuss other needs that the company can fulfill. The newer drivers believe the check-in was a waste of time, and that by skipping it they could complete their routes more quickly. What they didn’t realize was that there was a direct correlation between the check-in process and an increase in orders.

The challenge facing this company is Staff Satisfaction Not Linked to Company Success. Many of the new drivers who were hired were attracted to the position because it was with a stable, reliable company and offered good benefits. Their motivation was to fulfill the order deliveries as quickly as possible to shorten the length of their workday. Helping the drivers understand that the stability of the company—and in turn the company’s ability to keep them employed—will only continue with orders continuing to grow motivates employees to follow the procedure. Establishing new Key Performance Indicators to which all drivers contribute further strengthens the connection between their daily work and the company’s success. Classic Challenges Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: Are you facing any of the Classic Challenges of a Stage 6 business? If you were to implement it today, which of the 11 Elements would make the biggest impact on your organization? (For a full list of the 11 Elements, see Chapter 9.) Looking ahead, how can you prepare for the challenges that come with a Stage 7 business? Tip: Don’t be afraid that the challenges you are facing today as a business leader will simply multiply as your business grows. ➢

The Classic Challenges change according to the Stage of your business. Take heart in the fact that the ones you overcome today will not be twice as difficult in the next Stage.

The Elements of an Exceptional Business Overview Elements are the principles, methods, and tools that form key structures within an organization. Many organizations are either missing an Element or it’s not strong enough to support the organization’s current Stage or desired growth. As a result, these organizations experience a host of challenges and surface symptoms. Surprisingly, though, the connection between the surface symptoms and the missing element is not always obvious. Infusing Elements into a business’ ecosystem is the essence of ReWilding. Similar to the rewilding process in nature, whereby a missing element is reintroduced in order to restore balance to an ecosystem, Organizational ReWilding finds the missing elements in a business and infuses them. When an Element is infused into the organization, it sets off a ripple effect that begins to reduce or eliminate the challenges for which the Element addresses the root cause. The result is an organization that is more resilient, capable of navigating growth, and more exceptional.

The Elements are organized into four categories: Culture, Infrastructure, Leadership, and Strategy. Culture includes Elements that impact an organization’s values, behaviors, and relationships. Culture Elements: Brand & Core Values One-to-One Process Infrastructure includes Elements that create foundational structures throughout the organization.

enduring,

Infrastructure Elements: Business Development Structure Key Performance Indicators Master Processes Meeting Structure Organizational Structure Leadership includes Elements that focus on developing a cohesive Leadership and Management Team and creating an organization less dependent on the CEO. Leadership Elements: Interdepartmental Planning Strong Management Team Strategy includes Elements that facilitate the necessary critical thinking to consciously design a resilient organization and provide shared strategic language. Strategy Elements: Business Growth Framework Business Model Each of the elements supports a critical function of a growing organization. Brand & Core Values are about keeping promises to the market and the team. When an organization defines these sets of values, it’s positioned to consistently deliver on its promises.

Business Development Structure is how an organization generates consistent and growing revenue. The starting point is understanding that Business Development encompasses the three revenue generating functions—marketing (generates leads), sales (turns leads into revenue), and customer service (keeps the revenue coming). A Business Growth Framework unites a company’s management team with a comprehensive business growth methodology. Instead of a CEO carrying the burden of growth alone, the common framework allows the entire management team to work with the CEO on important business strategies and initiatives. A Business Model is the architecture of a resilient, profitable business. It includes the fundamental strategic areas of a business: value, customer, revenue/profit, and structure. It also provides a framework to periodically assess the business’s design and adjust to new realities as the business grows. A Strong Management Team is how an organization leads with a shared vision and common language. All too often, organizational growth is stunted because the team doesn’t know where they are headed. Strong leadership can unify team members and accelerate growth. Interdepartmental Planning is how an organization focuses resources beyond department silos. It consists of a structured method of categorizing priorities across all departments so that the organization is working together towards common goals, not competing internally for resources. Key Performance Indicators are how an organization measures and evaluates work outcomes. Identifying and tracking the right metrics is the difference between an organization knowing exactly where they are at and flying blind. Master Processes are the key processes and systems that make an organization more efficient and effective. Rather than relying on specific individuals to run, the organization creates processes that enhance quality by reducing variance. Meeting Structure achieves greater effectiveness in an organization’s meetings by identifying the different types of meetings that are held and applying the appropriate degree of structure. A One-to-One Process provides a regular feedback loop between a supervisor and employee that promotes proactive inquiry, creates

personal accountability, and builds a bond of trust. It is one of the foundational structures needed to create a high functioning company. Organizational Structure is how an organization builds resilience by employing a simple principle: organize the work before you organize the people doing the work. The lack of structure within a business is a major contributor to organizational chaos, disengaged employees, high turnover, and a culture that is resistant to change. The Elements and the Stages of Growth The importance and impact of each Element varies based on the Stage of Growth. Some Elements are important immediately, beginning in Stage 1, while others don’t become priorities until the organization reaches higher levels of complexity.

This image shows the Elements across the seven Stages of Growth. The importance of the Elements is depicted by dots and checkmarks. Green dots highlight Elements that are a Stage’s highest priority to get in place and be adopted by the organization. Yellow dots indicate the Element should be considered, but it is not the top priority at that Stage. The Red dot denotes Elements that are not necessary at a particular Stage because the organizational complexity is not enough to benefit from its implementation. Finally, a checkmark identifies Elements that should already be in place and fully integrated into the organization.

The Elements in a Stage 6 Business

In Stage 6 there are eight elements with a checkmark, indicating that these Elements should have already been adopted by the organization. Those elements include Brand & Core Values, One-toOne Process, Business Development Structure, Key Performance Indicators, Master Processes, Organizational Structure, Strong Management Team, and Business Growth Framework. If the company has not fully implemented these Elements, they become the highest priority (even more so than the Elements with green dots). There are three Elements with green dots, indicating top priority. These are Meeting Structure, Interdepartmental Planning, and Business Model. Missing Elements Example A furniture store has been growing steadily and is currently in Stage 6 with 127 employees. Over time, as teams specialized into departments, some of them have consistently received more attention and resources than others. Operations, for example, has been supplied with the latest computer systems to track inventory and the trucks needed to deliver it. Business Development has the financial resources it needs to widely market the company and to service its customers.

Human Resources, however, has not received as much attention. The head of HR is soft-spoken and of the mentality that it’s always best to make do and not complain. While the rest of the company has grown, HR is understaffed, a fact that becomes apparent when they are unable to fill the positions required to accommodate the influx of new business generated by the other departments. Without the additional staff, the company is unable to make the revenue it was counting on by investing in marketing and operations. This business is suffering from a lack of Interdepartmental Planning. Instead of looking at company initiatives across the board with a cross-functional mindset, each department was left to petition for the resources it wanted to reach its goals. Departments with stronger personalities win in this type of win/lose process, resulting in pockets of the organization that are underdeveloped. This leads to weak links in the chain that will eventually cause growth to stall. The Elements Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: Does your organization plan strategically by considering input from every department, or are the departments largely isolated from one another? Meeting Structure is a high priority in Stage 6. Does your organization have clear structure and purpose for its meetings? Are meetings generally effective, or do most employees complain about meetings? Is your organization missing any Elements that should already be established by Stage 6? Tip: Your challenges help to identify the Elements missing in your organization. ➢

The Classic Challenges are symptoms that point to underlying issues related to the Elements. Start with the symptoms and work backwards to identify the Elements that are missing (for more information on Classic Challenges, see Chapter 8).

Transition Zones Overview Transition zones are periods of change a business goes through as it exits one Stage of Growth and enters the next. Transition Zones happen to every business as they move from one Stage into another. During this period of change, businesses commonly experience a period of chaos where things feel disconcerting and overwhelming. Transition Zone are like rough waters. These periods can be especially perplexing because the organization is often experiencing positive advancement and growth right up to the point the transition begins. Flood Zones and Wind Tunnels There are two types of Transition Zones: Flood Zones and Wind Tunnels. In a Flood Zone the organization is flooded by work and the complexity suddenly becomes overwhelming. Often, the reaction of the leader is to throw more people at the problem. That is rarely the right answer, however, because adding more people just means adding more complexity. In a Wind Tunnel, the organization finds that what has worked up to this point—processes, methods, tools, structures, etc.—no longer works. Those past approaches need to be blown out and replaced with new approaches that fit the new Stage. This can be unsettling since it can require significant change for the organization. Think of a Wind Tunnel as a period of “Out with the old, in with the new.” Transition Zones often feel chaotic to an organization because it is a time of transformation, or growth, from one Stage to another. Knowing to expect them can help an organization get through without panicking or retreating. Transition Zones across the Stages of Growth

Each Transition Zone starts at the end of one Stage and continues through the beginning of the next. For example, in Stage 1, which is 1-10 employees, the organization will enter a Flood Zone around the time they reach eight employees. It will remain in a Flood Zone as the company transitions into Stage 2 until they reach around 12 employees. At around the 13th employee, the business will have completed the transition and will enter a Functional Zone. A Functional Zone is the period where a business is solidly within a Stage and can have its priorities dictated by the Gates of Focus. For example, in Stage 2 the Functional Zone is from 13 to 17 employees, which is the range of employees between the incoming and outgoing transitions. Leadership in a Transition Zone When in a Transition Zone, the organization needs the leader to emphasize Structure, Clarity, and Focus. These three things will help maintain the confidence of the organization through the inevitable turbulent times, allowing it to navigate the chaos as gracefully as possible. Picture a group white water rafting: when they encounter rapids, the rafting guide barks out warnings and gives clear directions on what everyone needs to do, all the way until calm waters are once again reached. A leader can provide Structure by ensuring the team understands their role, setting clear expectations, and demonstrating how to effectively accomplish the work. One way a leader can provide Clarity is to forewarn the organization of upcoming Transition Zones. Armed with this knowledge, the rough waters experienced by the organization will

not cause so much anxiety; the Transition Zone won’t feel as unexpected or shocking as it otherwise would. An example of how a leader can provide Focus is by narrowing responsibilities, reducing the number of new initiatives undertaken, and painting a clear picture of what success looks like for each team member.

Transition Zones in a Stage 6 Company The transition from Stage 6 to 7 marks yet another significant increase in complexity. Organizations typically experience a Wind Tunnel during this transition. The systems and processes that had been working well are no longer sufficient or applicable as the number of employees grows. A Wind Tunnel is when the systems, processes, and structure that worked in the past may need to be blown out to be replaced with new, more scalable solutions. This is part of the “out with the old, in with the new” transition. The most common mistake that business leaders make at this point is to assume that growth itself is the problem. Rather than question the scalability of the systems they’ve been using so far, they question everything else about the business. Are the new employees at fault? Is the new vendor the issue? Is it even possible to scale up their services to this new, higher-capacity level? If things are hard now, won’t they be even harder with more growth? The organization would be better served by focusing on how to adapt or replace its systems, processes, and structures to manage the new workload. Processes that worked fine with lower volumes or fewer people will need to be reevaluated and refined to be more efficient and scalable. This is just a growing pain that, once successfully navigated, will allow the organization to reach the next Functional Zone in Stage 7. Transition Zones Example A company that provides an online marketplace for luxury vacation rentals has just reached 156 employees. With a flexible and robust software platform, future growth looks promising. The CEO has always been attached to their central office in California, but as they continue to grow, it’s becoming more difficult to find qualified employees. She also sees the need for more hubs across different time zones, both for prompt customer service and for prospecting new locations.

As she considers bringing on remote workers, a host of new problems arise. What will the impact be on company culture? How will they train new employees remotely? How will they adjust meetings to include remote teammates? Can her Leadership Team effectively manage a geographically dispersed team? The more she thinks through the implications of expanding to include remote workers, the more she starts to question the viability of further growth. This CEO is leading her team through a Wind Tunnel. Although some of the systems they’ve used in the past will continue to function, the changes that occur due to taking on remote employees will have a big impact on many of their systems and processes. While she can’t see clearly to the other side, focusing on the end goal of what they are trying to accomplish will help maintain a sense of order and normalcy as they work through the logistics of the transition. Transition Zones Application The following questions will help you apply the information from this chapter to your company. Download the Stage 6 Workbook to record your answers. Key Questions: How would dealing with a Wind Tunnel challenge you personally as a leader? What initiatives can be delayed until after you exit the Transition Zone so the team can maintain focus? What are some tangible ways you can bring confidence to your team during this period of relative chaos? Tip: Remember that the growth you experience during this time may feel overwhelming but there is no shortcut to building scalable processes and systems. ➢ If you are in a Transition Zone, post the words “Structure, Clarity, & Focus” in your office or write them on a white board as a reminder of what the team needs more of from you and the Leadership Team at this moment.

Conclusion Stage 6 is Strategic. A business can often grow successfully up to Stage 5 with a strong team and effective operational processes, but Stage 6 requires a different level of strategic planning and thinking. The leadership team is handling more of the operational side of the business, with the CEO being less hands-on in those areas. Maintaining company culture is critical in this stage, so a big focus is on people in Stage 6. Led by a strong vision and a capable Leadership Team, the organization should exhibit a high degree of confidence, willing to pursue new market opportunities and able to absorb necessary change. As with every Stage of Growth, there are Non-Negotiable Rules for the Stage 6 business to follow in six foundational areas (business development, business model and plan, finance, leadership, operations, and workplace community). Abiding by these rules can help the business avoid many of the Classic Challenges associated with a Stage 6 company. While there are 11 Elements to every exceptional business, a Stage 6 business should prioritize implementing Meeting Structure, Interdepartmental Planning, and Business Model. This assumes that Brand and Core Values, One-toOne Process, Key Performance Indicators, Business Development Structure, Master Processes, Organizational Structure, Strong Management Team, and Business Growth Framework have already been fully implemented. Lastly, a Stage 6 business can expect to a hit a Transition Zone as it reaches 155 employees. This Wind Tunnel is characterized by a failure of the existing systems, structures, and processes and a need to implement new ways of doing things. A leader who brings structure, clarity, and focus will help the organization navigate the transition zone and move into the calmer waters of the Functional Zone of a Stage 7 company. The Stages of Growth methodology serves as a roadmap for leaders of a Stage 6 company. Rather than react to every new change as it happens, leaders can proactively plan ahead and make adjustments based on the experiences of hundreds of other business owners who have dealt with many of the same challenges. Regardless of the industry, all Stage 6 companies share a great deal in common. Learning from one another is the most efficient and effective way to navigate growth.

Further Reading Burlingham, Bo: Small Giants Fischer, James: Navigating the Growth Curve Fritz, Robert: Corporate Tides Goleman, Daniel: Primal Leadership

About the ReWild Group Founded in 2017, the ReWild Group is based in Colorado at the foot of the Rocky Mountains. We are dedicated to furthering the research that was originally presented in the book, Navigating the Growth Curve (published in 2006). As we expand our network of Advisers, our goal is to deliver the benefits of this research into the hands of as many business owners and leaders as possible. Our Advisers are trained on delivering impactful engagements that bring the principles garnered from our research into practical, every-day solutions to common problems faced by businesses. We’re on a mission to multiply the number of exceptional businesses around the globe. We believe that work is a fundamental part of human existence. When a person is part of an exceptional workplace, they can apply their natural talents, grow as an individual, and develop new skills. This person returns to the home and society as the best version of themselves. As we grow exceptional businesses, the impact reverberates throughout our homes, our communities, and our nations. This is how we change the world. Join the movement. Whether you are a business adviser or a business owner, you’ll find resources to help you on your journey. www.ReWildGroup.com