I have 2 clients who are focused on “accountability” this year, and it’s proving a hard row to hoe for both of them. Why?
Well, first of all, accountability is a somewhat scary term. If someone is saying we need it, then that must mean that we are not being accountable, and that sounds like someone’s not happy with people’s performance.
Worse, if there’s not a way to gauge performance, the people are likely to take a need for accountability as a judgment on their dedication. They’ll confuse accountability with work ethic.
It’s unfortunate that accountability gets this reaction. In Stage 2 companies, accountability is more about making things that used to be managed intuitively into things that are managed objectively. It does make a judgment about how people are working, but not in the way they think – accountability focuses on working on the right things, not the level of effort.
In fact, most of the time I work on accountability, people have a clearer sense of direction and less stress in their jobs.
I can spend lots of time talking about how to make your organization more accountable, but for now, let me finish by answering the question, “How do you overcome the initial resistance to accountability?”
I recommend 3 steps. First, before you bring up accountability, praise the team’s work ethic (assuming it deserves praise…if it doesn’t, that’s a deeper problem…), so that they know that you know they are dedicated. Second, give them an example of people spending more time in an area than they should. (Serving the bottom 20% of your customer base is a fairly typical area.) Finally, ask the team, “Do you have a way of quickly seeing whether the other people on the Leadership Team are succeeding?” If you don’t, then you’re probably spending more time than you should simply understanding how you’re doing, instead of diving into the issues that will make your business better.
I spent the last 2 days in a workshop learning about performance and accountability from Shane Yount of Process-Based Leadership. His model is a terrific match for the strategy work I do – once you know where you want to go, then you need to activate the organization in a consistent, engaging, disciplined-but-flexible process.
I often talk with my clients about “strategic management,” which is the on-going ability of the organization to identify the right things to work on, and then to actually work on them – as opposed to getting consumed by day-to-day work that puts things off-track.
What powers Shane’s performance system is a “culture of accountability.” What does that look like?
- There are clear priorities for each team – and the company as a whole – to focus on
- There is a sense of urgency in each team – Shane is a strong proponent of a weekly cycle
- There are “non-negotiable rules” that people hold themselves, others, and the organization to – things like showing up for meetings on time, coming to meetings prepared, and taking responsibility for “re-negotiating” commitments if they are not met
- The dialogue is about what people do, not how they feel
How do you know if you need it?
- The performance of your company or team is driven by the force of the leader’s personality (and if that wasn’t there, who knows what would happen…)
- The company or team focuses on whatever is in front of it at the moment
- There is selective engagement – people are able to set their own level of effort and contribution
Many companies don’t need or want a complete structured performance system like what Shane offers. But whether you’re talking about my “strategic management,” or Shane’s “process-based leadership,” every company needs its own “management toolbox” to drive performance.
Is your company’s performance saying you have the right tools?
Many of my clients are proud of the “family feel” of their companies. They care about their people, see the whole person, and create a bond of trust that moves them well beyond an “employer-employee” relationship.
The last few years have been hard for the leaders of these companies, because they haven’t been able to protect their employees from the tumultuous market environment that their companies are operating in. Bonuses have been cancelled, raises postponed, training missed, and some of the “family” have even been let go.
In a discussion this week with a leadership team that was debating how to balance the benefits of a family feel with the realities of operating a company within the rules of business, I pointed out that it is profitability that provides the flexibility to treat employees well.
Look at a company that treats its employees well, and you’ll also be looking at a company that has a profitable business model.
At a Board meeting with one of my family business clients a few weeks ago – a company that has been passed down through several generations – they said it another way: “Always protect the money tree first.”
After yesterday’s meeting, I thought, “If profitability is the foundation of an empathetic company, what is the foundation of profitability?”
The answer has many parts, of course – strategy, productivity, discipline, teamwork, culture, accountability, etc. But I’d say the thing that comes first, before making the profitability happen, is…empathy. The ability to empathize with your customers, so that you understand what they need and how to make their lives better, in a way that they value.
If you want to empathize with your employees – if you want to create that great family feel – empathize with your customers.
There are many values that a company can live by. If you haven’t considered having Empathy as one of your company’s core values, it’s worth a look. And if you haven’t defined any of your core values…we should talk.
A friend of yours runs a successful Stage 2 business – but is also frustrated
that things aren’t going as well as he’d like. It’s your job to set him
on a new path.
How do you create that inflection point – that clarity of understanding and
focus that sets a new path and provides the basis for success?
Let’s look at how it works for Ebenezer Scrooge, because if ever there was a
tough customer for a strategy consultant to work with (cheap! close-minded!
domineering!), he is one. But Scrooge’s consultant (the ghost of his
former business partner) designs a great process that holds lessons for any
He starts with a look at the past (fond memories of Scrooge’s childhood).
What core principles show up then that Scrooge needs to reconnect with
today? What lessons does the past hold for Scrooge?
He then looks at today, from different perspectives than Scrooge usually sees
(a joy-filled market, a family feast, a miner’s cottage). What can
Scrooge learn from those people? What is happening outside of his normal
view that he can use? What does Scrooge have to offer those people?
And finally, he looks at the future to see where Scrooge will go if he
continues on his current path (a neglected grave!). What are the results
Scrooge will get from his present efforts? What results does Scrooge
want? Do the likely results line up with the desired ones – and if not,
what needs to change?
With a process like that, it’s no surprise that Scrooge emerged a new
man. Full of energy. Renewed with purpose.
The Wikipedia entry
about Scrooge’s transformation sums it up well, capturing both the immediate
impact and the long-term sustainability of Scrooge’s new thinking:
“Scrooge has become a different man overnight, and now treats his fellow men
with kindness, generosity, and compassion, gaining a reputation as a man who
embodies the spirit of Christmas. The story closes with the narrator confirming
the validity, completeness, and permanence of Scrooge’s transformation.”
So, as you do your annual planning, use the wisdom of Scrooge’s planning
process in your Stage 2 business, by tapping into the Ghosts of your
The Ghost of Business Past. What was at the heart of your success
in Stage 1? What was fun about the business? What made you
special? As you look to the future, you need to reconnect with that –
especially as your company has to change.
The Ghost of Business Present. Life in Stage 2 is more complex
because you are connected to so many more people and organizations, and because
you need to deal with broader markets rather than just isolated
customers. To come up with an effective plan, you need to take a more
holistic view. What are your customers thinking? Your
suppliers? Your competitors? Your employees? What is
important to them? What trends are happening in the market? You
need to see the world from other eyes, and use that perspective to come up with
The Ghost of Business Future. Stage 2 companies have reached a
point of sustainability, so now their leaders have to turn their attention to what
they are sustaining. What impact do you want your business to have on
the world? What results are you looking for from your business?
What does your business stand for? And what gaps and problems can you
identify today so that you can deal with them before they are urgent,
expensive, and entangled?
Successful Stage 2 leaders understand that it is not easy to design an effective
planning process, and so they put the time and effort into “planning the
When they do, the result is a business that is transformed overnight – with the
power to sustain that change over time.
What do you see when you go on a tour with your ghosts?
Enjoy the holidays, and best wishes for a good new year.
Want to succeed as a Second Stage company? Become a master of systems thinking.
Systems thinking is at the heart of my work. A Stage 2 company is moving from a Simple System (few parts, simple cause-effect, straightforward thinking) to a Complex System (many interdependencies, complex cause and effect, deeper analysis). Simple System thinking won’t work anymore…and Complex System thinking needs to be used in doses that start small and get bigger as the company grows.
One of my favorite books for introducing Complex Systems is Once Upon a Complex Time, by Richard Brynteson. He has assembled a range of 2-page stories that show how things are more complicated than they look at first glance.
A good example is how he starts his introduction…
“I could never figure it out. If my parents really cared about me, they would quit smoking. They knew that it irritated us kids. They should just stop doing it. Just like that! Now that I have worked with systems thinking, I realize that they couldn’t stop, just like that. There is the smoking system – the process of lighting up, inhaling, exhaling, and flicking the ashes (and, maybe, coughing). But other systems also surrounded smoking: social systems, body addiction systems, emotional systems, thought systems, memory systems, drinking systems…and social systems.”
If you’re running a Stage 2 company, you could probably go out to any person in your company right now, and read that quote, and that person would be able to replace “smoking” with some bad management practice that is holding them, and your company, back.
Everyone in the company may even know what it is.
So, why haven’t you changed it? Because you’re probably trying to solve a Complex System problem with a Simple System approach.
Brynteson goes on to explain that systems thinking…
- Uses a wide-angle lens, not a telephoto
- Sees connections between parts, not just the parts themselves
- Sees the patterns and structures underneath events, not just the events themselves
- Examines time and distance between cause and effect
- Is circular, not linear, thinking
At Phimation, our consulting, coaching, and training takes a Complex System approach, and teaches your team how to, so that you can make the major shifts that you need for solid growth and sustainable success.
I named the business Phimation because that’s the force that enables Simple Systems throughout nature to transform and thrive as Complex Systems. And Stage 2 companies are a key leverage point for phimation – they are living the transition from Simple to Complex System every day.
If you’d like to learn more about how to apply Systems Thinking to your Second Stage company, register for our monthly Stage 2 Secrets call.
Imagine having a crystal ball that could show you the future.
Wouldn’t it help you make better decisions for your business?
Well, we don’t have a crystal ball. And we can’t promise to show you the future. Not exactly. However, we can show you the next best thing: the trends that will impact your second-stage company in the upcoming year.
As we work with small businesses to help them assess and understand what shapes their future—from the inside and out—we see these trends and understand their impact.
And second stage companies, who might be lulled into a false sense of security for getting past that awkward start-up phase, may need to watch these trends more closely than anyone. Failure to look at your operating environment might lead to missed opportunities … or prevent you from adapting when it’s most necessary.
Here’s are a few of the trends we think everyone should know about:
The New Agraria – Get ready for an environment more like 1800s farming than the industrial economy you’ve come to know. This means you can expect “seasons” and different “weather patterns” in your markets, and you’ll need to take one plot at a time as innovation continues to shift your market. However, one key difference is that today’s small businesses will work in communities defined by interest, instead of geography.
MAD World (Massive Adaptation Daily) – With economic and technological change, companies will need to be highly nimble for daily survival. The leading companies will engage employees to evolve in significant ways that create new opportunities and efficiencies.
The Almighty Network – There will continue to be a powerful shift between physical and virtual worlds. The Internet will keep equipping small businesses with essential availability, intelligence, capability, and capacity to serve their customers. But it’s not just a one-way relationship. The Network is demanding more from small businesses.
Our trend report, which we assemble every year, highlights the most influential small business trends. We think it’s essential reading for small businesses looking for trends to capitalize on.
We’ll send you the full report – with trend descriptions, strategy recommendations, and important trends from other sources – when you enter your email address below. If you just want to see the trends, check them out on the SlideShare presentation below.
Conflict in a team can be so frustrating for a Second Stage company. You want to focus on the work at hand, but you and your team can’t get started – or keep getting sidetracked – because you’re not working together.
There can be several reasons for team conflict. Often people look at the personalities involved, or the level of emotional intelligence, or “teamwork” – and it makes sense to look at all of those. An area many people don’t explore, though, is strategy.
Often times conflict arises from a poor or unclear strategy.
Conflict happens “when you don’t live up to my expectations.” And that happens much more often when (1) the strategy isn’t clear, because then there are no common expectations and everyone just uses their own, or (2) the strategy isn’t good, because that puts more pressure on everyone, and pressure makes it hard for everyone to work outside of their comfort zone.
Team-building exercises have their place. But if there is conflict in your team, you may have deeper work to do than just team-building. If you think that’s the case, schedule a strategic planning session, hire a strategy consultant, or lead your team through the strategic assessment workshop we offer in our Stage 2 Insight program.
I hear it all the time: “When we were a start-up, everyone on the team went beyond their job and made sure we were successful as a business. It’s why we made it to where we are. But now that we’ve become a Second Stage company, most of our new hires aren’t that way – they’re just doing their job. It is so frustrating.”
There can be several reasons why this happens – you may not be managing your hiring process effectively, or you may need to manage your staff’s performance better. And your compensation program is probably broken.
But it’s your strategic planning that provides an important foundation for all of those other operational issues to be solved, and to have employees act like owners in your small business.
In Stage 1, the CEO has the unique responsibility and ability to provide the vision for the business, and is able to quickly make the strategic “judgment calls” that make a business successful during start-up.
In Stage 2, though, it’s the team – the company as a whole – that needs to create the vision for where the business is going, and it’s the Second Stage CEO’s job to lead the team in creating that vision. The CEO should ask great questions, and let the team come to the answers.
I worked last year with a company that had been struggling for several years to get employees to take ownership. They had created a vision for the future, and told the rest of the team, and the team had never “made it their own.”
I worked with the team to create a vision. The CEO played a strong leadership role in that process, providing perspective but not answers. The vision was 95% what the CEO had in his mind, but it was now the team’s vision, not his own, and the company was able to use that foundation to grow the business and reduce operational and inter-personal headaches.
So, if you want to have employees act like owners, ask strategic questions, and guide them in answering them. That’s why we’ve set up our Stage 2 Insight management training program and free Stage 2 Secrets teleseminars for the whole team to participate – for them to take ownership, they need to understand the issues.
Most Second Stage small businesses have a planning process, but there are often 2 problems with them: the planning cycle is incomplete, and the preparation is incomplete. Let’s look at that second problem some more.
Because leaders are so busy, there’s a natural desire to have strategic planning take as little time as possible. Unfortunately, though, you have to have preparation in order to be strategic. You will not get strategic-level thinking or discussions from your Stage 2 leadership team if you expect people to be working at their job until 9:29, step into the leadership meeting at 9:30 and be strategic, and then go back to fighting fires at 11:00.
So, how do you make your strategic planning process more strategic?
Don’t use a “spike” model for your meetings, where there’s little or no preparation structured to occur before the meeting, and little or no follow-through structured to occur after the meeting. Instead, use a “wave” model, where you build up to the meeting with preparation, and then wind down from the meeting with follow-up.
You’ll find that your conversations get considerably more productive, and there’s better follow-through, when you use the wave model for strategic planning in your Second Stage business.
We’ll talk more about planning in our free Stage 2 Secrets educational teleseminar.
Marshall Goldsmith wrote an article for The Conference Board titled, “The Success Delusion.” In it, he writes, “We all delude ourselves about our achievements, our status and our contributions…Although our self-confident delusions can help us achieve, they can make it difficult for us to change. In fact, when others suggest that we may need to change, we may view them with unadulterated bafflement.”
One of the biggest challenges for a Stage 2 leader is to overcome the success of Stage 1. The rules of success are so different in Stage 2 that it would usually be better if the business were closed down once it had proven its near-term sustainability, and then re-opened without that history of success.
I talked with a Stage 2 CEO last year. After great success in Stage 1, he was being overtaken by Stage 2, and work was harder and less rewarding. As I talked with him, I could tell he had problems with his business model, he had no vision for the company (Him: “I want to sell it in 10 years.” Me: “So your message to the company is that success is when you leave?”), and he was unclear about his value proposition –all of which were fairly predictable results of his leadership style.
After we spent about one hour of talking about his challenges, he informed me that he had come up with a new strategy that would put the company on a new path. (Did I mention that his leadership style is prone to quick decisions?) And Marshall Goldsmith’s insight about self-confident delusions played through my head as I listened to him.
Toward the end of his article, Goldsmith tells how to deal with the success delusion. “How can you achieve positive change? Get in the habit of asking the key people in your life how you can improve.” There’s more to it than that, but that’s a good start.
The workshop that is part of Phimation’s Stage 2 Insight training program is designed to ensure that your team gives you a complete, honest assessment of your business – and your leadership. It’s a good place to start if you want to get some feedback.