Your management style has helped you succeed in the past. But, surprisingly, it may be the reason why you struggle to grow now. How so?

Let’s look at two aspects: decision-making and communication.

Has it been your style to make both big and small decisions yourself?

And has it been your style to speak to each executive one at a time about his particular functional area--without necessarily sharing what you have learned with your other executives?

If so, you have been managing in what is called a hub-and-spoke style and you, unintentionally, may have created executives who no longer can help you grow.

What do I mean?

As your staff size grows—your headcount may be as small as 25 employees and as large as 100 employees--you can no longer be the one who makes all the decisions. And you can no longer be the only one who has the full picture of what is happening in your business.  You simply don’t have the time to follow-up with each employee or get involved in every decision that needs to be made.

At this point, you need other executives who can shoulder the burden of making risky but sound business decisions and who can manage a larger staff with a wider scope of responsibility, such as managing multiple areas of your business.

The rub is, though, your style of management hasn’t prepared them for their new level of responsibility.

Since you made the decisions, you may have, inadvertently, groomed or attracted executives who prefer it this way. These executives are not risk-takers and will avoid making decisions, if they can.

And since you speak to your executives on a one-on-one basis, your executives haven’t had an opportunity to grow in their knowledge of how your business operates, outside of what they currently do.

So what can you do?

It’s time for some difficult changes.

First, change your communication style with your executives, expanding from just one-on-ones to team meetings. Hold executive team sessions to develop both a strategic and operational plan. Hold executive quarterly meetings to compare your performance to your operational plan. Hold monthly and weekly meetings to focus on the operations of your business.

Besides creating a shared understanding and executive team commitment, scheduling these meetings gives your executives a deeper and wider view of how your business works and how to make it successful. 

Second, to enable your executives to take on more responsibility, modify your own decision-making style. Provide your executives with the freedom to make their own decisions within their own area and within parameters you set. And, where decisions affect several executives, seek consensus, allowing them to understand more deeply how each area impacts another.

If you like to be fully in control, you will be uncomfortable giving away power and trust to someone else. But, as Dr. John Warnock, founder and chairman of Adobe said about being a CEO, “Your…objective…[is to]grow and get yourself fired…stop doing the job you’re doing and grow to the next level.”

And third, in what may be one of the hardest personnel challenges you will face, replace those executives who can’t step up to a more challenging leadership role.

By “replace” I don’t necessarily mean “fire.” As several CEOs have commented to me, find this executive another job in your business. After all, he has helped you to succeed and has skills, experience and knowledge that are valuable to you and your business.

And if you are not sure who might be a problem, talk to your executives. They usually see a glaring problem with one of their peers before you do and, in fact, are wondering why you haven’t replaced him sooner.

A hub-and-spoke management style, while effective for very small companies, can stifle growth in larger ones. It’s time for change--not only in your executive team but also in how you manage. Making these changes, difficult as they may be, lays down a management and leadership foundation that will put you back on the path to growth. 

www.capehornstra

Choking on Your Own Success

Success unleashes its own critical leadership challenges. Unless you deal with them, failure can follow. Here is how you can tame three such beasts.

(Apr. 24, 2006 On Sandhill.com)

Business success can be fleeting. One day, its champagne and caviar and the next its a Big Mac.

Why is that? Because success, by its very own nature, creates unforeseen and counter-intuitive leadership challenges.

It's like success pushes you through the proverbial looking-glass into a new world, where you discover, much to your surprise, that what worked before, no longer works now.

Here are three such leadership problems:

1. Leadership That May No Longer Lead
2. Executives Who May No Longer Execute
3. Resellers Who May No Longer Resell

Overcoming each requires a new way of thinking.

Leadership That May No Longer Lead
Here is a startling epiphany that happens to some CEOs. Staring in the mirror, with his razor poised to cut his stubble, he realizes that the person staring back at him is now precisely the reason his business has stalled. He has become the proverbial chokepoint in his own company's future success.

How so? At some point in growing a very successful software company, a CEO may realize that his organization is now too big for him to manage. Where before he was an excellent four-ball juggler, balancing a few initiatives, he is now trying to juggle eight balls, balancing a multitude of initiatives, and some, unfortunately, just fall with a dull thud on the floor and stay there.

(Some CEOs, of course, are facing this situation today, and just don't know it yet.)

Why does this happen? Different size software companies require different styles of leadership. In our shaver's case, his company has outgrown his leadership style.

For example, founders love to be in total control of their business. They hoard their decision-making like a miser hoards his gold. Yet, as the business grows in size, he will need to develop executives under him who can, within parameters he sets, have the authority to make their own decisions for their department or divisions.

But changing leadership style isn't true just for CEOs of small companies as the example may suggest. It applies to CEOs of larger companies as well. Not too long ago, as his company was nearing one billion in revenue, Bernard Liautaud, CEO of Business Objects, hired John Schwarz as CEO with the challenge of turning Business Objects into a multi-billion dollar enterprise.

Success brings with it a challenge for the CEO. Should he, can he and will he modify his leadership style to suit the needs of the larger company?

Executives Who May No Longer Execute
Not only does this leadership challenge apply to the CEO, it applies to his direct reports as well.

In what is an unexpected, jarring, and painful fact of business life, a CEO may have to replace exactly those executives who played a pivotal role in bringing his company to its current level of success.

Just as the CEO must change his leadership style, so must his executives. Even though some executives will thrive with a larger scope of authority and responsibility, others will wilt.

An example: a founder modifies his leadership style and instead of being a miser with his decisions, much more freely delegates real authority and decision-making downward to the executives who report to him.

But here's the rub. Some of those executives stayed with the founder precisely because they liked it when the founder made all of the risky decisions. In fact, that's the reason they continued to work for this founder for so long.

Giving this executive decision-making power is too threatening. When the time comes for this executive to make a risky decision, he procrastinates or lets his subordinates push him in one direction or another. The result: his group doesn't execute well and he misses by a substantial margin his annual targets. This is not the type of executive a founder can continue to have in this leadership position.

As a company grows, the CEO must be prepared to replace those executives who in the past helped his company succeed, but who no longer will be able to do so in the future.


Resellers Who May No Longer Resell
Continuing with leadership challenges, here is another one, but of a different type.

In order to continue with aggressive growth, a CEO may need to acquire some, most, or perhaps all of his resellers. How so?

Initially, a reseller--usually a sole proprietor running a family business--is hungry. He wants to build a successful business for himself. So he is aggressive, willing to invest his own capital and his own sweat to grow his business.

He succeeds. Year-after-year, he becomes a top-performer beating his sales commitments every year. And he builds a large base of satisfied customers.

But over time, as the reseller becomes more and more successful, he is no longer hungry. He becomes satiated since he has acquired all of his material comforts—and that is what mattered to him.

At this point in the reseller's life, he isn't interested in threatening the status quo. His attitude changes from being aggressive to being conservative.

And it shows. He is reluctant to sell new products. He isn't aggressively marketing and selling to new customers. Where he was a top-performer before, he now is an underachiever.

Your goals and his have diverged. And they won't converge in the future.

In this circumstance, where the software company CEO believes his reseller is underperforming significantly, it may be time to acquire the reseller.

Being successful in business is like reaching one snow-capped mountain summit only to discover another and then another. And as a software company CEO leads his company's ascent up to the next higher summit, he needs to be prepared: prepared to change his leadership style, prepared to remove executives who no longer perform and prepared to acquire his resellers.

tegies.com