Leadership: Differentiating the levels to avoid confusion in roles
I’m a business consultant and I specialize in helping businesses innovate as quickly as they innovate their products. I travel around the world helping multinationals, family businesses and start ups create new types of leadership, new types of cooperation, new integrations of innovation and sales, and new purpose.
I’ve been doing this for 33 years. I also have a school for TA coaches and consultants, and upon request I coach leadership teams. I love my job. I love being both healer and surgeon. On the one hand, I help raise people’s consciousness and awareness. And the other hand, sometimes I have to be incisive as a business consultant.
I want to tell you a story about incisiveness.
I was called some time ago to coach a startup team. It’s a brilliant startup. It was founded by three brothers. The three brothers had a fantastic idea for a high-tech business that could conquer the world. One brother was great at operations. One of them was technical. And the other had a general management profile.
They tried out the first product, decided that hardware wasn’t really where the margins were, jumped on the software wagon, and have now got a product which they launched in partnership with a Chinese business.
Expanding A Startup
They have launched in 22 countries and have gotten $10 million investment in from outside investors. At the same time as they’re expanding their business, they are also innovating their own organization. And they’ve started hiring people. Like most startups, they first hired people they know, generalists, and gradually they started to recruit other types of leaders as well.
Some leaders might come from other startups. But in this case, some leaders came from other multinationals. That’s an aside really, but sometimes I wonder if startups are trying to emulate their investor’s organizations, especially when they suddenly start to call themselves CEOs and CFOs, even when there’s only 20 people in the business. I’ll talk about that another time.
I was called in to give management team coaching. The presenting problem, was that they weren’t able to take decisions together. At the time, there were three founders in that team and three external people. The three founders had shares as well. The external people could get shares as the company grew, but didn’t have shares yet. I wasn’t really clear yet what the underlying problem was, so I asked the CEO, who commissioned me, “Can I sit in on one of your meetings?” And so, I sat in on one of their meetings.
It took ages, I was sitting there for three hours with six people who really did not take any decisions.
They discussed a lot. They got distracted by details. They started to discuss the Christmas party. They involved other people, sat in with the team, who were not management team members. We ended the three hours without any decisions taken, but a lot of heartbeats going much faster because of the stress.
What really happened here? What kind of distractions were there?
A distraction in technical terms for me is when people start to talk about the process in the group much more than they talk about the work. As a guideline, when the dynamics in the group, of pressure or agitation or intrigue, get higher than the forces of cohesion, people tend to turn inwards and start to talk about the process and the group, the lack of leadership more than they focus on the task.
Confusion in their roles
One of the things that struck me is that most of the dynamics were around the confusion between the shareholder and the management role. So, three founders were actually busy fighting with each other during management team meetings, while the others were bystanders and silenced by the process.
I decided to speak to the three founders separately: “Look, there’s a difference between being a shareholder and running the company strategically long-term, and being a manager, where you make sure that these decisions are executed and you’re focused on creating cohesion within the management team.”
My proposal was to coach both groups separately, instead of together, to see if a differentiation in structure would help them to solve their problems. Now, I manage them and coach them separately, the management team has calmed down a lot.
What has emerged in the shareholder team is very usual for startups, and that’s really what I want to talk about as well.
When you start a start-up, you actually create a partnership based on interdependence, in which you share the ownership of the company. In this case, there was someone who was really good at operations, someone who was really good technologically, and someone who was a really good sales and general manager. And they started off their journey together saying, “Hey, we’re brothers in arms and we depend on each other for the success of the whole.”
As time went on, they grew and they become more successful. And gradually the sales function and the general management function became more important in relation to the investor. The product was already there. It was selling well. The technology was gradually being improved, but didn’t need any leaps and bounds.
And so, the person who was the CEO got to think, well, actually I’m not so dependent on the other two to be successful.
This happens in startups a lot. You start on a basis of equality and interdependence. And as you become more successful, you start to think you can do it without the other two or three or whatever number you are. One of the really important things as a team coach is to teach people the notion of interdependence.
Interdependence: I can only win if you win. If you lose, I lose.
The difficulty with that is that we spend most of our lives avoiding interdependence. Especially in the west, we’re taught to become independent. And as the pressure grows, that striving to be independent becomes bigger. What I would really propose is that one of the jobs of team coaches is to promote interdependence and teaching people that actually together we can win more.
Cooperation in teams: Contracting Level 3: Psychological Contract – video training
Cooperation in teams: Cross-functional cooperation breeds innovation – video training