Company may not appear exactly as shown

What bill of goods have you just been sold?  They said the company is 15-years old, yet you’re discovering it to be very immature.  You’ve discovered there are few standard documented processes, everyone seems to be fighting fires and there isn’t a HR polices manual.

As briefly stated in an earlier blog, companies exist in one of four panes of existence:

  1. Startup
  2. Turnarounds
  3. Realignment
  4. Sustaining success

Author Michael Watkins refers to this as the STaRS model.  In reality however, you’re likely to find a company exists in multiple panes of existence instead of squarely in one category.  Different departments, products or systems/processes may each exist in a different category.  For example within a Sustaining Success firm, you could be launching a new product line, which falls into a Startup category.  At the same time, your company may have just acquired another firm who is in Turnaround.  I suspect the combinations and permutations may be similar to the coffee variations at Starbucks.  Your mission, should you choose to accept it, will be to identify where each key department, product, or process exists in the STaRS model.  Why?  This will enable you to procedurally tackle the unique issues in each category with a common framework unique to that category.

Differences

In a Startup situation, you have limited financial resources, employees are usually less focused on key issues, there is ongoing excited confusion, corporate memory is virtually non-existent – residing in the wet matter of a handful of key resources and the company’s main goal is fiscal survival.  You must channel the excited confusion into a productive direction.  Because the world is your oyster, you need clear measurable goals.  You need to create value and to do so you’ll be making tough calls.  By definition, startups are on the offensive requiring hunter type management.

In a Turnaround stakeholders know what the problems are, but not what to do about it.  For example, the product is at end-of-life with no replacement in sight or a competitor has been relentlessly eating away at your business greatly eroding the financial viability of the business, but at least the team recognizes the consequences.  At any given time, between 20 and 30 percent of all companies are in need of a turnaround (J. Murphy 1986).  Staff may be close to despair – you need to provide a light at the end of the tunnel.  You need to teach people the need for change, teach them about the problems.  Your business, process or product takes on a defensive strategy.  You have one goal, which is to get to a defendable line, meaning you’ll have to make tough calls.  Again, hunter type management is required.

Conversely to a turnaround, in a Realignment situation people will be unwilling to see the forest for the trees.  They’ll be in denial that anything is wrong.  Nortel comes to mind.  The challenge is dealing with engrained cultural norms and convincing employees that change is necessary.  You will still likely to have strong people, products or technologies (again, Nortel).  A farmer management type is needed here.  Hunter type management types don’t work well here.

A Sustaining Success is where most want their company to exist.  However, if you’ve read Good to Great, you know that “good” is the enemy of “great”.  Why try harder when your company and products are good enough? (Hint: you’re competitors are.)  You have to create a new challenge to fend off complacency and find new areas to succeed or grow.  A farmer management type is needed here to take the company to the next level.

Take some time to categorize your new situation as this will aid in strategizing your approach to each.  Categorize the departments, processes and products as you learn about them.

Biz-Unit Product Process
Startup
Turnaround
Realignment
Sustaining Success

There is much business literature on the various states of businesses.  If you find your business / department / process / product entrenched in any particular state, my suggestion is to learn more about that one specific state.

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