What happens in the early stages of a company’s development? Featured

9:01pm EDT September 30, 2012
What happens in the early stages of a company’s development?

This is Part 1 of two articles addressing the trials and tribulations of a company’s growth and development. First, let us set the scene: A company is on the path to success … great growth … exciting leadership … but has very little management.

This start-up, entrepreneurial company is driven by personality, and not just one, but a combination of personalities that create a unique cultural fingerprint of the company. It is not a formulaic approach; instead, it develops over time. This merging of personalities is an exciting time, driven by a common purpose and the excitement of building something unique. Things are flowing smoothly, and everyone begins to settle into a comfortable rhythm, says William F. Hutter, president and CEO of Sequent.

“This rhythm of early stage companies is a lot like that favorite recipe — the unique combination of foods and spices that make it smell and taste perfect,” says Hutter. “Remember visiting your grandparents’ house after you have been away for a long time? That smell of Grandma’s favorite recipes is deeply imbedded in your memory. Just one hint of that smell takes you right back to the comfort of Grandma’s kitchen. This same thing occurs in an organization during the early stage.”

Smart Business spoke with Hutter about the early stage of a company’s development and the role of the gun slinger.

How does the combination of personalities impact an organization?

The combination of personalities creates a feeling of comfort for those who helped create the collective personality. The founder/entrepreneur who has always run with his or her hair on fire is the head cheerleader. Everyone becomes comfortable, and the company’s cultural fingerprint becomes more established.

In the early stage, leadership is focused on sales, service and growth. The basic needs of the business — cash flow, growth, scale and bench strength — require that these factors repeat for continued growth. The leadership operates intuitively and influences the organization every day with necessary circumstantial decision-making. They are focused on a single objective — growth. This is the way the company operates and it is an exciting time.

What is the role of the gun slinger in this environment?

In the early stages, the importance of the gun slinger role is staggeringly important,  because the gun slinger drives growth. We all know a gun slinger or two. They are in every organization. They get things done. It may be the founder/entrepreneur, or someone who has the courage to take on a tough project. They take risks and blaze the trail. The gun slingers in business are a lot like the gun slingers in old westerns. They are hired to do a tough job. They may move from town to town to ‘fix’ a problem, challenge the status quo or lead a group through troubled times.

In a growing business, the modern-day gun slinger is instrumental in driving the growth and the vision and is a constant reminder of the action and effort that are a necessary complement to the rest of the staff.  The role of a gun slinger within a company requires creativity, quick thinking, calculated risk taking, gauging of skills, analysis of the objective and a superior level of individual talent. The role also allows for longevity of service and a willingness to accept individual accountability. Modern-day gun slingers must be self-motivated, willing to invest unrelenting effort with a purity of focus and have the ability to execute without regret. What organization wouldn’t want an employee or two with the skills of a gun slinger?

 

When does the gun slinger come under fire?

As the company grows, both internally and externally, the original entrepreneurial spirit and attitude begin to wane, and the gun slinger comes under fire. Early stage success brings with it the realization that this new company may very well have a long life. Therefore, a transition that ‘feels’ necessary begins to manifest.

Logic sets in. The organization has grown, and the early stage leadership realizes that planning for the next stage is imminent. Financial reporting is hazy, and people begin to point fingers rather than taking responsibility or working together to analyze procedures and methods. So a decision is made to look at what has been an ‘intuitive’ formula.

Time is spent documenting processes and systems to improve efficiency and move from an intuitive formula to one that is more prescriptive. The company also starts to see the risk of having leadership in such a crucial role. As a result, questions emerge — questions that involve re-evaluating what led the company to where it is today. Questions include:

  • What do we do if something happens to the leader?

  • The company is now a significant asset to its investors. How will the assets be protected?

  • How do we document knowledge?  How do we establish leadership as a mentor for sharing their unique knowledge?

  • Can we decentralize to improve integration of departments?

  • Do we need more management oversight?

All of these questions are legitimate, but we sometimes fail to recognize the consequence of seeking answers to these questions.

What happens when the gun slinger is no longer welcome?

In evaluating the factors that led to the early stage success, what had been the company’s strength is now examined as the company’s weakness. Often, when objectives have changed, the esteem once commanded by the leadership is questioned. They are no longer viewed as the strong gun slinger. Just as in old westerns, modern-day gun slingers, while welcomed in times of need, find their welcome has run out once their job is completed.

 

Next month, watch for Part 2 of the story, “Death of the Gun Slinger.” Learn how the changes fostered by the re-evaluation questions produce separate and distinct outcomes, which ultimately lead to the death of the gun slinger.

William F. Hutter is president and CEO of Sequent. For more information, visit www.sequent.biz. Reach Hutter at (888) 456-3627 or bhutter@sequent.biz.

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