Leaders, and their companies, go through stages of development. In order to become a company that consistently outperforms the competition, this development needs to happen in two different areas as described below.
Having been part of several management teams that have profitably grown sales at least five times in a three-year period, people ask me if there are tips for growing their business. One thing I have observed is the answer depends on a couple of factors: the stage of the business and the attitude, or mode, of the management team.
Stages:
Businesses naturally evolve through different stages. The three stages that businesses go through are 1) Startup, 2) Sell & Deliver, and 3) Professional.
Startup Stage: A start up is in the process of developing a business model. For a restaurant the questions might be: What is the price point? Where do I locate? What type of menu? For a tech startup, the questions might revolve around: How can people use the technology to solve a real-world problem? Once a business has determined their basic business plan then they're ready to move to the next level, Sell & Deliver.
Sell & Deliver Stage: In the Sell & Deliver stage, the only important steps are to 1) sell your product or service, 2) deliver it, and 3) collect the money. Unless these three things happen, the owner will not be able to pay the rent and business will fail. This simple process can work very well, in many cases, for many years. However, at some point, if the business continues to grow then the business will get more complicated and require a new level of sophistication.
Professional Stage: Once the company has grown to the point where there are more people, orders, and products, the complexity requires the traditional professional management tools. These tools typically include processes, procedures, policies, and systems. By bringing in the skills to set up these processes and procedures the business has an opportunity to grow to yet another level. However, these tools will only take a company so far before it reaches another plateau unless it has adopted certain attitudes.
Modes:
Just as companies go through different stages, their management can operate with different modes or attitudes. There are two modes that apply to most company leaders: Expert and Listening. We have all been taught since kindergarten that we are supposed to have the answers. However, in the fast paced world of business with so many people constantly gathering information, there is no way for a leader to have all the relevant information. For this reason, they need to become true listeners.
Expert Mode: People in expert mode have been trained throughout their school lives to have the right answer. In technical situations in particular, having a correct answer makes sense. After the doctor examines you and runs the appropriate tests, they are expected to provide an answer to why you are sick. Running a business is different. There are so many people talking to customers, suppliers, service providers, other employees and the government that it is nearly impossible for the manager to have all the information about the vast majority of issues facing the business. When a manager is in expert mode, they feel compelled to make a decision, even when they are not the best person to make the decision.
Listening Mode: People in listening mode have already developed expertise. However, they have moved beyond having to provide the answer. They now see their role as supporting others while the people they are guiding go through the learning process. The goal is not to prevent others from making mistakes, but to help others grow their base of experience and expertise. One challenge for people in the listening mode is that they think they are already in the listening mode. It is extremely difficult to have the perspective to judge one's self in this area of development.
Best-of-the-Best
As we have seen, to move from the stuck position that many lower middle-market companies find themselves in, there are two major dimensions that need to be addressed. The company must move from the Sell & Deliver stage to the Professional stage. In addition, the management must overcome the tendency to be an Expert and move toward being a Listener. This process is not easy, but the results can be dramatic.
Double Sales
Many companies have made the transformation described above and, in the process moved from flat sales to doubling their sales, often within just a couple of years. Becoming a Best-of-the-Best company involves changing a number of habits about the way people listen, talk, collaborate, and make decisions. Also, other factors like incentives, vision, values, communication, talent, information and authority contribute to creating the environment that results in rapid growth in sales and profits.
Becoming a Best-of-the-Best company involves more than implementing systems, processes and policies. It also involves changing habits to create an environment where people can be part of a team, with shared goals and timely access to information so they can make decisions that move the company forward to success.
Would you like to learn more? Adding your comment below will speed the completion of the full ebook on the Abunden Framework©. All questions in the comments will receive a response. Or message me directly.