“Fix the leader, fix the business”. – Aaron Stokes, ShopFixAcademy
In this series, I’ve been talking about the natural evolution of a business…and the things that stop it from growing. The things that stop the business from evolving are usually inside the founder’s head.
In the Systemize phase, the founder must get the operating instructions for the business out of their head and into the heads of their employees. If they don’t, they’ve bought themselves a job instead of a business. They must overcome the Swamp of Perfection and the thought that they can “just do it better/faster myself.”
In the Optimize phase, the founder must hire people who are more skilled at their particular skill than the founder can be. Founders are generalists–they’re pretty okay at every part of the business–but they must hire specialists to take them to the next level. Specialists are expensive. And it’s scary for the founder to say “I’m not the best person for this job.” This is the Valley of Death.
If the founder can get out of their own way, they can reach some pretty respectable heights: multi-million-dollar businesses, run by excellent staff and polished systems. Their business is valuable and attractive to buyers for the first time, and could probably carry on for a decade if the founder doesn’t make any big mistakes. It has momentum, and the founder’s job is simply to keep pushing the team forward.
But to really scale–to reach the next level, where the business becomes self-replicating; the clients are self-referring; and the business becomes the default choice–the business must begin to generate its own momentum. That means the founder–who pushed the car up the hill alone, then pushed it faster with a team, and eventually got in to steer while his team pushed–must sometimes hand over the wheel.
Decisions should be led by data. The company must produce metrics and dashboards to understand its progress at a glance. For example, our dashboard includes leads, sales calls booked, sales calls showed, sales calls closed, conversions, ascensions, retention, client headcount, gross profit and net profit.
Historical performance should then be modelled into financial projections. Should the company increase pricing, or increase the marketing budget? The first step is to look at retention and conversion metrics, and then build financial projections to help the leaders decide.
Next, an executive team with high levels of trust should lead and manage their own specialties. At this level, these leaders should really run the company. If the founder disappeared, the staff might notice, but the key metrics would not change.
Many companies follow a “Traction” model for reporting and executive leadership.
The executive team might have managers to lead different departments or teams. For example, we have a head of Media and head of Sales (reporting to the CMO); a lead Mentor, app developer and lead curriculum developer (reporting to the COO). Their job is to manage quality of their team and work to improve it. If improvement is driven by the founder, the company doesn’t have its own momentum yet. This is important, because if the founder is creating the product updates, they’ll always be “tinkering” with the product instead of making decisions based on data.
When a business escapes the Quicksand of Control, it can become a movement.
However, if the owner still has the responsibility to inspire the movement and create energy and passion for the customers and team.
And if the owner relinquishes control too early, the business could lose momentum and slide backward. There are certainly days when every founder is tempted to just walk away…but if their operations aren’t sound, or their marketing lags without them, the business will lose momentum and slide backward.
This is a paradox of leadership: letting go of control is ultimately required for scale. But done too early, and the company will lose its way. You have to see signs of momentum, recognize them, and know when to get out of the way bit by bit.
How does the founder know it’s time to back away?
When operations are running without the owner’s participation; and
Failures are caught and corrected by the team; and
Upgrades are found, tested and implemented by the team; and
Mistakes are corrected by the team.
Also, when clients begin to find “hacks” to the system, and create new pathways on their own. For example, when a group of clients starts their own regular monthly group calls, the team considers adding monthly small-group calls for everyone. But the key is that the team identifies these ‘hacks’; tests them; and decides whether to implement them or not.
In effect, the team owns every facet of the feedback loop: they initiate new ideas, remove ideas that aren’t working, catch and correct problems on their own.
When the team owns the feedback loop, it can own the upgrade process and make each part of the business better than the owner could.
For example, I got food poisoning before our 2019 Summit event, and missed my flight to the venue.
The team arrived on time and set up; I arrived two days later, when registration was open and the event was about to start.
To my surprise (and delight), I walked into the conference room to find happy clients being greeted by excited staff; getting bags of swag and hugging. There was music playing and an atmosphere of reunion among long-lost friends.
Then I watched the event unfold, delivered my one-hour keynote, got on the plane and left.
The event was twice as good as the events where I was coordinator and MC.
While these events are a small part of our business, it was the first real proof that the team could run a facet of the business better than I could. Now I stay out of their way.
Handing over control of the product, the marketing and the operations can be an act of retirement. But it can also be the ultimate act of service.
The founder of the company must get over their own ego and say “this event or product or process is better for everyone if I’m not involved”.
It’s hard to hand over your baby, because you’ve cared for it for so long. It’s scary–and since most founders determine their self-worth by the success of their business, it’s sometimes impossible to detach.
The key is to ask yourself, “What’s the best thing for my clients here?” and recognizing when they’re better served by someone else.
For me, this meant handing over control to my team…and to my community.
Our CSMs are now more welcoming and empathetic than I am.
Our mentors are now more experienced and better trained than I am.
My COO is a better manager of process and people than I am.
Our head of sales is better at enrolling clients than I am.
Our media director is better at producing media than I am.
Our CMO is better at coordinating ads, events, media and promotion than I am.
Our events director is better at putting on amazing events than I am.
Our community is better at supporting each other than I am.
My job is to connect these people and inspire the movement. Luckily, I’m so inspired by our clients (gym owners) that inspiration is not hard to find and share.
To steal a line from Ted Lasso,
“We own it, but it belongs to them.”
One final example: when I announced that we were capping our clientele at 1000, my Ops team was on board. My sales and marketing teams were reluctant, but they accepted the rationale. The pushback came from our community. It went like this:
“Coop, how can we possibly turn a gym away who needs our help?”
One of our clients sent me that message.
That was powerful. I had consulted the team, but the movement has its own momentum, and I realize that I would be dumb to fight it.
Our clients don’t see our metrics, but they see our ethos: “Help first”.
I explained to the client that we’d continue to publish free help to all gym owners, whether we had space in our program or not. But the explanation felt hollow, because I knew that I can’t resist the tide. The movement has its own momentum. If clients keep pulling in their friends, I’ll step out of the way and let the momentum take the company where it will.
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