| Modes of ManagementAdjusting Your
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| | spectrum into useful stages. Then we can
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| Management Style To Your Company's
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| | probe along the required dimensions for
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| StageBy Bob NortonFrom the moment a new
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| | key issues.Only experience at executive
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| company is founded to its appearance on
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| | levels in large, medium and small
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| the Fortune 500 list, executives must be
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| | companies can help to identify the
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| able to transform the way they manage a
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| | pivotal developmental stages that
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| company - shifting gears, often
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| | dramatically affect the context of a
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| dramatically to a different management
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| | given company's decisions. Success comes
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| style - to ensure the company's optimum
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| | from implementing a management mode that
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| development. I am not referring to
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| | is a direct function of the company's
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| individual executive style here. What I
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| | current stage, industry and market
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| am talking about is the total adjustment
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| | conditions. The risk is that a company
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| and evolution of the context in which
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| | will be run in the same way as its VPs,
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| major management decisions are made. I
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| | managers and/or CEO have always run their
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| call this the "Mode of Management", which
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| | past companies or departments,
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| is very dependent on the company's
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| | irrespective of the important and
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| current developmental stage.Would you
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| | differing macro variables created by this
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| make the same product development
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| | stage of development.What is Different
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| decisions in an identical way with one
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| | about This Philosophy?
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| hundred dollars in the bank and no
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| | Conduct a search via or the Internet on
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| customers as you would with $50 million
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| | the term "management" and you will
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| in the bank and 1,000 customers? Of
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| | literally find tens of thousands of books
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| course not! So why do many managers often
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| | on the subject. From project management
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| run an organization in the same way
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| | to company management, lots of authors
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| despite the many gradual and often sudden
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| | push their particular methods and styles.
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| changes that happen between these two
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| | These range from micromanagement and the
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| extremes? It is human nature to continue
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| | One-Minute Manager to how to transform
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| to do what we have always done; to
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| | "good" into "great" behavior. What you
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| simplify and repeat what worked in the
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| | will not find is much discussion in any
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| past, despite vastly differing
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| | of these books about an approach that
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| circumstances. We need a system or
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| | helps you define and implement a
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| context for adjusting and teaching the
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| | management mode that clearly correlates
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| different "modes of management" as
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| | to your company's current status and
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| companies evolve. Some of these changes
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| | position in the market. Yes, there are a
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| come naturally, but most are very subtle
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| | few good books and some successful
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| and linger far longer than they should. A
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| | startups, but, in general, there is
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| failure to change can do substantial
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| | little on this topic available in the
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| damage to a company before adjustments
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| | millions of books in print! I don't know
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| are made, or even doom the company to
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| | if the lack of discourse is just because
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| flat sales in the long term.A key to
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| | authors want to appeal to the broadest
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| ensuring corporate success is to let the
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| | possible audience, or if they are
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| various stages of a company's development
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| | actually naive as to how one must manage
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| determine it's overall management "mode".
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| | differently according to the different
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| It is a given that we must use the
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| | stages of a company. I am certainly not
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| appropriate management mode for each and
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| | the first person to recognize this
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| every decision and action we take in a
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| | natural phenomenon. I suspect that
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| company. The company's existing condition
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| | authors are addressing the stage of
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| and/or stage of development is always the
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| | company they are most familiar with
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| major determining factor or context for
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| | without much thought to the others.
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| almost every significant
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| | Unfortunately, for the bulk of their
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| decision.Companies can reap enormous
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| | readers, this can make the majority of
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| benefits when the style by which they are
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| | their recommendations and advice wrong,
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| managed is adjusted quickly to
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| | which is of little help. When making a
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| accommodate the company's shifting
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| | major decision, too little credence is
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| complexities, stages and sensitivities.
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| | given to the enormous number of variables
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| In fact, quickly adjusting this mode of
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| | that make every corporate situation
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| management can be a huge competitive
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| | unique.Actually, I have seen very
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| advantage since most companies fail to
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| | successful executives with significant
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| adjust quickly enough. Just about every
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| | experience in large company environments
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| company exhibits often-overlooked, but
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| | give perfectly good talks on management
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| critical, stress points that signal the
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| | that are 100 percent true for large
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| need for decisive action or gradual
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| | companies - and almost 100 percent wrong
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| reorganization. Recognizing these signs
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| | and potentially fatal if followed by
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| during a company's gradual metamorphosis,
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| | smaller companies. They are talking about
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| and responding to them appropriately, may
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| | steering an oil tanker when their
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| mean the difference between bankruptcy
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| | audience consists of nothing but little
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| and survival, or at least will help avoid
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| | speedboat captains. These executives must
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| stagnation.Any good manager knows an
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| | have little experience and perspective
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| adjustment in style and tone is warranted
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| | beyond that large company perch, and they
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| for different individuals and situations.
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| | often wind up preaching to a crowd of
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| People have different motivations and
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| | entrepreneurs about things they must do,
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| often respond differently to the exact
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| | when in fact, following that advice could
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| same circumstance. This is natural;
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| | kill their companies. The problem is that
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| people react to other people's tone and
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| | there was no context defined for the
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| body language in very individual ways. We
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| | lecture and no language or thinking in
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| receive immediate feedback in the form of
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| | the advice about a company's current
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| facial expression, body language and
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| | stage. If it had been qualified as advice
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| actions, and adjust our reactions
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| | for companies over $70 million in sales,
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| accordingly. However, a company, which is
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| | for example, it would not have been a
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| a much more complex organism that
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| | potentially lethal lecture for the many
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| consists of many individuals interacting
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| | startups and entrepreneurs in attendance
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| with complex outside market conditions,
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| | that day. It seems we pay little heed to
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| provides little immediate feedback.
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| | the simple fact that what can be right
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| Therefore, it is very difficult to use
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| | for a small company can be totally
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| direct feedback to fine-tune your
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| | disastrous for a larger company and vice
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| management mode. Only years of experience
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| | versa.Of course, the opposite situation
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| can build enough data to form theories
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| | can also be true, wherein entrepreneurs,
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| and adjust management modes.Why We
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| | more often than not, fail to change their
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| Simplify Too MuchMillions of years of
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| | company's and personal management styles
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| evolution have taught us to run from
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| | from raw startup mode to the next level.
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| danger and created a mind that adheres to
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| | They cannot "let go" and delegate to
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| simple "rules" that have worked for us in
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| | others. This is why entrepreneurs are
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| the past. Our mind wants basic rules we
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| | often replaced by "professional
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| can reuse and has been designed to use
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| | management" or people with specific
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| these learned shortcuts again and again.
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| | experience in that stage of company
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| For example, we all know that fire is
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| | development. It is also a major reason
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| hot, don't touch it. The more pain
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| | why most companies stagnate at a certain
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| (failure) or pleasure (success) that
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| | level, which is ultimately the maximum
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| results from a lesson, the deeper these
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| | level or size at which a controlling
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| rules are ingrained. This is why people
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| | entrepreneur can be effective or remain
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| who experience a single, huge success
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| | in their comfort zone. A Board of
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| often have a tougher time changing or
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| | Directors of any company with more than a
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| accepting input from outside sources.
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| | single shareholder has a fiduciary
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| They take this success as proof that they
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| | responsibility to replace such a CEO as
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| are "always" right and begin to repeat
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| | soon as there are signs the entrepreneur
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| what has worked for them before. If they
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| | is not evolving with the company so as to
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| use their one learned mode in a different
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| | ensure that stockholder value continues
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| context then they are very likely to
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| | to grow. I believe a solid, well
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| fail.Unfortunately, the world is much
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| | thought-out system can allow many
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| more complex, and changes much more
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| | entrepreneurs to make this evolutionary
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| rapidly, than ever before. In fact, this
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| | transition as their company
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| trend is accelerating because human
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| | grows.Adjusting to the Best Management
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| knowledge is now doubling every few
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| | ModeMy goal is to shine a light on this
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| years. One hundred years ago, most people
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| | failure to preach in context and to
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| still used horses to get around and
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| | create a methodology to qualify these
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| technology of any kind was primitive by
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| | recommendations and comments and adjust
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| today's standards. Because life is
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| | our mode of management. This needs a
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| currently so much more complex, we need
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| | system of definitions, models and
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| these mental simplifications more than
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| | language. To be successful, we must also
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| ever. Yet now, we must overcome these
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| | have some guidelines for management modes
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| past evolutionary behaviors and
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| | that are appropriate for certain stages
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| discipline ourselves to take hundreds of
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| | and situations in a company's life. This
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| variables into account for complex and
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| | would allow us to benchmark our
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| unique decisions we may never again make
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| | management mode and proactively evolve it
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| under the same circumstances.Overcoming
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| | as a company grows.Unfortunately, there
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| evolution can be difficult, but it is
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| | are not many people who have experience
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| simply an exercise in conscious thinking
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| | and perspective in various different size
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| that can be facilitated by some simple
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| | companies and can speak to these vast
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| methodologies that force us to review
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| | differences. Academia cannot properly
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| important circumstances. The challenge as
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| | recognize and study this problem without
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| an executive is to force ourselves to
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| | first establishing a framework by someone
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| think through all the variables of a
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| | with experience across most stages of a
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| given situation and make a decision in
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| | company's development. After all, this is
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| the proper, current context, not simply
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| | not so much a theoretical problem as a
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| by referring to past experiences or rules
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| | real world experiential learning issue
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| of thumb.Cognitive dissonance, the mind's
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| | and therefore it is hard to define and
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| tendency to see only those factors that
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| | bound properly.Each decision we make is
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| reinforce what we are expecting to see,
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| | highly context-sensitive to many macro
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| greatly aggravates this problem. We tend
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| | factors. Sometimes, these macro factors
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| to distinguish only those things that
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| | are developed or institutionalized over
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| reinforce our beliefs and actively avoid
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| | time. For example, IBM would never go
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| or explain away those things that
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| | after a very small market because doing
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| disprove these beliefs. At the extreme,
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| | so would distract management and
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| this can become the proverbial ostrich
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| | resources from bigger market
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| with its head in the sand - the "What I
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| | opportunities that would better serve its
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| don't know can't hurt me" pose. Of
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| | corporate size, overhead and growth
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| course, this statement couldn't be
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| | needs. Everyone at IBM knows this and,
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| further from the truth. Any company that
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| | accordingly, would not present a plan to
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| fails to adjust to rapidly changing
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| | the IBM corporate machinery for a product
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| world, economic, and market conditions is
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| | with a very small market opportunity.
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| doomed. Even great Fortune 500 companies
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| | However at the other extreme, younger
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| are rarely still there 25 years later. As
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| | companies have not had the time or
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| managers we have to overcome human nature
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| | experience to develop such rules or
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| and cognitive dissonance in order to make
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| | systems, forcing executives of small and
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| the proper contextual decisions for the
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| | medium-sized firms to make them up as
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| benefit of our company.Cognitive
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| | they go along based on the specific
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| Dissonance - The strong tendency to see
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| | circumstances of the day. People may
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| and acknowledge only that which
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| | attempt to adopt their own "rules of
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| reinforces what you already know and
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| | thumb" from their former companies, but
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| ignore or easily explain away data that
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| | the odds that these are also appropriate
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| conflicts with your beliefs. The desire
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| | for their new company are slim indeed. I
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| to avoid dissonance, or inconsistency,
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| | have seen many young companies enter
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| that would make you rethink things you
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| | markets that were way too big for them to
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| already believe to be true.The 5 Stages
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| | be successful in because larger companies
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| of a Company's Development1) Raw Startup
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| | will replicate what they do quickly and
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| No revenue (by definition) 0-50
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| | because they have not already secured a
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| a) Innovation as a priority
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| | beachhead they can protect before
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| b) Always in flux, high risk
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| | evolving into the larger market. This
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| c) More unknowns than knowns
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| | classic startup without a market entry
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| d) Product or service looking to prove
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| | strategy is common in technology where
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| its market exists
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| | technologists do not have enough
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| e) Everything is fragile2) Early Revenue
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| | experience in building businesses and
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| $100 to $5MM, 5 to 100 employees,
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| | attaching markets. I cannot possibly
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| Product delivered proving some value
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| | count the number of companies with a
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| proposition, but still no proven
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| | superior product that ultimately failed
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| sustainable or profitable business model.
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| | because they did not adjust their market
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|
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| | entry strategy to the size of their
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| Most companies slow or stop growing here
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| | company's resources or because they
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| due to organizational and people limits.
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| | managed the company like a large one when
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| This is often the hardest leap to make
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| | it was just in its infancy.An executive's
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| which requires the most changes in the
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| | ability to shift gears in the face of a
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| smallest period of time.3) Established
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| | situation that appears familiar, but is
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| Customer Base $500,000 to $20MM in
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| | actually ALMOST ALWAYS a different
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| sales, 20 to 200 employees
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| | context compared to what they have seen
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| a) Profitable or clear path to profits
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| | in the past, can make or break a company.
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| based on scaling business.
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| | When a decision's context is very
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| b) A proven market and value or price
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| | different due to the corporation's
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| formula, with profits clearly available
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| | current stage, it must be recognized
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| in a steady state world when scaled.4)
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| | immediately to produce a vibrant, growing
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| Expansion/Growth Phase $1MM to $1
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| | company.So what do you do differently
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| billion in sales, 100 to 1,000 employees
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| | along the spectrum from a raw startup to
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| Market opportunity is many times larger
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| | a mature company? There is enough
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| than the company and there is a desire
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| | information for an entire book or at
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| and ability for significant market share
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| | least a long series of articles. It
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| and/or revenue growth.5) Mature (or
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| | requires many examples and structural
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| large) $2MM to $100+ billion in sales,
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| | models to aid the decision-context
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| 100 to ∞ employees
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| | management. The first step toward success
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| a) Slow growth, stagnation of market or
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| | is acknowledging the need for a
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| company, or focused on harvesting past
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| | decision-context management framework and
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| investments.
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| | an understanding that the biggest factor
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| b) Slow/little change in market and/or
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| | in almost any corporate decision is this
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| company or commoditization of products
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| | framework. Upcoming articles will compare
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| forcing a focus on costs above
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| | and contrast management modes for a wide
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| innovation.
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| | range of companies, from small through
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| c) Consolidation of competitors and
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| | large.Bob Norton is the author of four
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| focus on finding new distribution and/or
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| | books on starting and growing companies
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| leverage.Companies come in many types,
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| | and entrepreneurship. He runs the
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| styles and sizes, and an approach that
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| | exclusive Advanced Entrepreneurship CEO
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| works tremendously well at one company
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| | Boot Camp to help CEOs and senior
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| can be a miserable failure at a different
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| | executives cut years off their learning
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| place and time. Every company and
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| | curve and coaches CEOs at growth
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| situation is different, so there are
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| | technology companies from startup to
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| literally hundreds of possible "styles"
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| | $150MM in sales. He has been part of
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| or "management modes." For practical
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| | eight startup companies and grown two of
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| purposes, it is necessary to create a
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| | those to over $100MM in sales. He can be
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| simpler, more workable model, which can
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| | contacted at: See: and for his
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| be used to illustrate a company's major
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| | training products for CEOs and
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| plateaus and organize this infinite
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| | entrepreneurs.
|
