What's the Big Idea?
For corporations, growth is a quarterly concern -- a hope maybe, but not a necessity. For small businesses and nonprofits, stagnation isn't an option: it's grow or die. But as businesses transition from startup to established company, the bootstrapped mentality is hard to maintain.
Often, the drive and excitement that came from making your first sale or surpassing your earliest goals get lost when you're no longer out of your element, forced to run lean. At the same time, expansion requires you to scale up, finding new ways of doing things that once came effortlessly.
If you're an entrepreneur, perhaps you started out with a handful of people, working together relentlessly on laptops out of someone's spare bedroom. Details could be solidified and questions answered by turning and asking the person next to you. After your first few years, the solid customer base you've built eases worry about cash flow, but it also brings a whole new set of issues: hiring, training, and managing additional employees. If, on the other hand, you're the employee, maybe you were given a few weeks or months to learn the ropes, and now you're finding yourself inundated with hard deadlines, increasing responsibilities. Either way, communication and organization -- coordination -- are essential.
What's the Significance?
Leadership expert Robert S. Kaplan, professor of management at Harvard Business School and former Vice Chairman of Goldman Sachs, has seen these issues at play out time and time again. As a consultant, he worked with a California-based tech firm in Menlo Park, which had consistently prospered since its founding in the 1980s. On paper, all looked good: the organization produced cutting-edge products and performed extremely well. Many of the senior leaders had been with the company since its inception.
But by 2006, the business was experiencing strain. Employees were putting in long hours while feeling less and less accomplished. Mistakes were made. "They didn’t quite have the coordination that they did once before to work on innovation that met customer needs," says Kaplan. "They didn’t notice it at first, but their market share started to erode and a few competitors made advancements and then more alarming, they lost some customers, which was really a jolt" -- and which finally got the executives of the company thinking.
Kaplan advised them to step back and examine the crucial question of whether the design of a company was aligned with its vision and priorities. As Kaplan outlines in his recent book What to Ask the Person in the Mirror: Critical Questions for Becoming a More Effective Leader and Reaching Your Potential, every rapidly evolving organization (or individual) needs to make the time and space to ask these key questions on a regular basis:
- If I had to design the enterprise today with a clean sheet of paper, how would I change the people, key tasks, organizational structure, culture, and my leadership style?
- Why haven’t I made these changes?
- Have I pushed myself and our organization to do this clean-sheet-of-paper exercise?
All of us have blind spots, says Kaplan. The intention of this exercise is to get you thinking realistically about where you are now, where you want to be, and what you can do to get there. What are you missing now that would help you arrive? In the case of the tech company, the CEO decided it was time to go back to basics. "They slowed down on their growth. They rethought what they were doing. What [the CEO] found to his surprise was [that]... most of the people in the rank and file... were very heartened by this whole exercise. He learned a valuable lesson and he realized that every period of time periodically [re-evaluate]."
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