SAN ANTONIO — Organizations pass through up to seven stages of development, and most stages are not good, said Les McKeown, an author, consultant and admitted “serial entrepreneur.”
“Four of the stages are clearly problematic,” said McKeown, keynote speaker at the UMA luncheon during Motorcoach Expo 2018.
“When you are going through these four it is obvious that you have got big challenges. There are three stages that feel pretty darned good. However, an alert — one of those stages is an illusion.”
McKeown has written three books, including the best seller “Predictable Success,” on which his presentation was based. He identified three key skill sets needed for an organization to pass from start-up to sustainable success: visionary, operator and processer. Each is important at various stages of growth and all must cooperatively balance their roles to maintain their organization’s success.
“The first stage I call early struggle. It is a struggle for money from a very specific source — a sustainable, profitable market,” he said. “That struggle is typically three years.”
Few new businesses escape early struggle, with about 80 percent of all new ventures failing in those first three years. There are two key reasons for the high mortality rate — one is a lack of ruthless focus on finding that profitable, sustainable market, McKeown said.
“The second reason for the high mortality rate is the absence of a visionary. They are incredibly resilient. They will not give up. But the visionaries on their own will not get a business to the next stage. What most visionaries do is link themselves very early on with someone I call the operator,” he said. “An operator is a ruthless finisher to the visionary’s ideas. They are a symbiotic couple.”
If the business survives early struggle, McKeown said, “It reaches the second stage that I call fun. After years of trying to find our profitable, sustainable market, now we get to mine it. There is tons of low-hanging fruit. We have nosebleed growth. Everybody is hugely motivated. “We begin to build the business for the first time with a real sense that ‘We’ve got this!’”
This seeming success prepares the company for another troubling stage: whitewater.
“The word of mouth goes out that this great company will say yes to anything and deliver,” McKeown said.
What happens to every organization, at some point, has been building up all through fun and overwhelms our ability to deliver.”
That factor, he said, is complexity. “Our old business was pretty simple and then we added more people, more services, more products, another location, more customers. Every single step along the way the business becomes more complex. At some point, our ability to say ‘yes’ and deliver by just improvising begins to fragment.”
Escaping whitewater requires a third type of skilled leader, the processor.
“What do we need to fix this? Systems and processes. How good are the visionary and operator in not just designing but adhering to systems and processes? The answer is terrible.
“For the first time the visionary and operator realize their joint skill set is not enough to take them to the next stage. We need a third type of person in the senior team, a person who thinks in terms of processes and systems, somebody who will make things happen repeatedly, regularly, consistently,” McKeown said.
The processor should possess the skills needed by the particular business. He or she might be a controller, an HR person, an IT person, a warehouse manager or route planner.”
The processor must not only be hired but also accepted by the visionary and operator.
“For the first time we have got somebody whose commitment is to doing the thing right,” McKeown said.
Advancing from whitewater to the fourth stage, predictable success, “is all about getting those three roles not just to put up with each other but to actually accept each other as fundamentally and coequally important,” McKeown said.
Other hurdles must be overcome to keep the business in predictable success, he said. “At this stage you get the ability to scale but you cannot scale without a solid foundation of systems and processes.”
If the skill sets do not cooperate, the fifth stage arrives.
“In theory we can cycle up in predictable success for as long as we want,” McKeown said. “Many organizations begin to over-emphasize the process role and fall into the stage that I call treadmill. Here we are over processed. If we do the right thing, we reduce the emphasis on process and come back into predictable success. If we don’t do this, the visionary and operator will leave. They cannot abide and the business will fall into the big rut.”
The big rut is illusory, he said. “We are still complicated and over processed but now we like it. Customers are a total pain in the neck, but we are big enough, rich enough and fat enough that we don’t care. It feels nice.”
Escaping the big rut is a business’ last chance, McKeown said, “or we fall into the final stage — death rattle. It looks like something is happening but the business as it previously existed is dead. That is the model based on my years of growing businesses.”