Entrepreneurs often launch a business with the goal of freeing themselves from the bureaucracies that are an unfortunate byproduct of big companies. However, when they are successful, business owners and leaders find they are being slowed down and frustrated by the same kinds of bureaucratic processes and thinking they had sought to avoid.
That’s what Bruce Hunter, CEO and president of Lighthouse 360, explores in his new book, The Success Cage: You’ve Built a Business That Owns You – Now What?
Having worked with hundreds of business owners across North America, he has found an important pattern. The early years are filled with the passion and the thrill of building something new. As time progresses, their business transforms itself into something more predictable. But according to Hunter, “behind closed doors, entrepreneurs often confess that their business has grown in a different direction or at a pace much faster than had been expected. The outcome: they feel at a loss as to “which way to turn.”
The entrepreneur’s dilemma
The fundamental problem, according to Hunter, is that the type of person who builds a company – along with the associated skills, goals, patience and mentality – is fundamentally different from those people who excel at managing a complex organization. They are builders and creators, with little time or patience for process; yet as the business becomes more complex, it requires a new set of skills and infrastructure to continue to progress. As a result, there comes a time when even the most accomplished entrepreneur needs help in building the systems, processes and human resources capable of evolving the business.
According to Hunter, there are three possible scenarios for businesses at this stage:
- The business may be resized, either by accident or by design, into something an owner can manage.
- The owner continues to try to manage the growth alone – usually resulting in stagnation, deterioration, collapse or sale.
- The owner recognizes the situation and seeks outside help to chart a new path and infrastructure for the business – a structure that sees new leadership of the day-to-day operations of the business.
The Success Cage: the book
The Success Cage: You’ve Built a Business That Owns You – Now What? is organized in two distinct parts.
The first part of the book focuses on typical organizational growth stages. While every business has a DNA that is unique, all proceed through five stages of growth regardless of the industry or nature of business. Each stage has different characteristics and organizational and leadership needs. Knowing where you are on this growth continuum is a critical step in understanding how to be successful in your current stage and what is needed at the next stage.
The second part of the book focuses on transforming the company from one that requires the owner’s direct day-to-day management to one that can function more independently and predictably. This, according to Hunter, is the “hands-free” business where owners are liberated from their “success cage” and are empowered to return to what they do best, i.e., building businesses. The transformation starts with owners taking a series of in-depth questionnaires to help pinpoint their personal and organizational preferences, behaviours and dispositions. These are supplemented with a set of practical and market-tested tools.
Evolving from entrepreneur to executive
The skills and psychology of those who create and build new enterprises are very different from those of people who excel in managing much larger, complex organizations. Making the transition from one to another forms the biggest hurdle for businesses moving from adolescence to maturity.
To run a successful early-stage company, an owner needs to have the qualities and mindset of an entrepreneur. Hunter identifies the five essential entrepreneurial traits as:
- persistence;
- extroversion;
- self-orientation;
- tolerance for risk; and
- open-mindedness or curiosity.
Hunter observes that those traits work against the entrepreneur in transitioning to a larger, more sophisticated operation. However, executives have their own mindset. They need to be adept at transforming autocratic, closely managed organizations into ones that are more broadly led. During the transformation, informal systems, management by intuition and some resident personnel need to be replaced with fact-based data, disciplined processes and different skills.
Planning and delegating
A consistent challenge for a company transitioning from entrepreneur-led to executive-led is that the business owner does not want, or know how, to delegate. To help them over this hurdle, Hunter provides a unique version of the one-page planning system.
However, instead of including the company’s vision, mission and values, Hunter’s plan starts with a clear destination towards which the leader drives the company. The rest of the plan is devoted to identifying the critical projects, ownership and timing needed to reach the destination.
To promote delegation, a key feature of this one-page business plan is that the owner must not appear as being in charge of any of the day-to-day activities. This compels the owner to delegate responsibilities, which is essential for building a self-sustaining organization, and that means allowing people to perform and then holding them accountable for their performance. ß
