Growth Or Status – A Real World Perspective For Employees and Employers
A recent project validated something we learned here at RR long ago. There are two different career value systems. One system values being in a growing company. The other system values a specific location on an organizational chart. This recent project demonstrated the stark difference between the two viewpoints in as clear a way as possible. Here are the bullet points –
1) A $25,000,000/yr. client gets a new source of capital from investors with significant experience in scaling up companies in their industry.
2) Our task was to identify a new CEO to grow the company from $25,000,000 to
$150, 000,000/yr. through acquisitions over 5 years for eventual sale.
3) The CEO would get a solid compensation package that included equity. His or her share in the eventual company sale in 5 years would be 7 figures.
4) It is a non-sexy, but necessary industry. Very marketing and ops focused.
We needed someone who could grow a company significantly. The investment capital was there, as was the business model. What we needed was an inspiring leader who could scale up a company if given the proper tools. The word leader is very important. It’s a leadership/people focused industry- services not products. It is not an industry that can be managed by a spreadsheet.
We filled the position last week. The finalist had strong experience in growth. He had personally experienced the fun of growing a company, having taken a business from $5 to $50 million annually in sales and he wanted to do that again, with equity, on a bigger scale.
As is normal for us, we spoke to over 100 people about the opportunity. The response broke down into 2 categories;
1) Equity? Great. Tell me more. I run a business now but work for someone else. This would be a way to accumulate wealth for me, not for someone else. This group’s most important question was – Is the business plan viable?
2) I run a $100,000,000 company now. Even though I have no equity, my next step is to run a $200,000,000 company. Your client is too small for me. This group just cared about the size of the organization under them at that moment.
Obviously, the first response was the one we wanted. The people in category 2 have every right to their value system. But here is what they miss.
It’s easy to be a placeholder. What’s a placeholder? A placeholder is a term for someone who has basically done the same job over the last 20 years at 4-5 different companies. I see them often at the CEO level. I call them serial-CEO’s.
It’s easy to drift into becoming a placeholder. A placeholder never moves the needle of growth. They run a $100,000,000/yr. company and grow it to $110,000,000/yr. in 2 years and go to a $150,000,000 company and grow that to $170,000,000/yr. in another two years. Candidly, in a business sense, neither of those are great accomplishments. Neither of those are growth situations that have taken a company to the next level. A series of those static experiences can turn you into a placeholder; be it at the C-level, VP or Director. If your skill is running a company or department at a specific sized business, that’s great but there are a lot of people who can do that. “Hey, at least I didn’t screw things up “, should not be a bullet point on a resume.
The ability to grow a company through different iterations is very rare. In every industry, there are revenue points at which the company needs to add skills or rearrange itself. In manufacturing, for example, a $60,000,000/yr. company looks a lot different than a $25,000,000/yr. company. The challenge to growth leadership is anticipating those needs and creating the infrastructure to support growth as appropriate.
There are two messages here. For growing employers, don’t mistake corporate placeholders with growth drivers. Growth management is a skill that needs to be acquired in battle. It’s not taught in an MBA class.
To placeholders, reevaluate your personal career metrics. If you are in a $100,000,000/yr. business now, it is much better for you to demonstrate that you can take a business at $50,000,000 to $150,000,000 than to take a business from $200,000,000 to $225,000,000. It’s the delta of growth, not the raw numbers, that are important.
As a candidate, your decision is a personal choice and either one may be right for you. The goal is to give you a different perspective to help your decision-making process be more complete. If you’ve had your formative years in large companies and in corporate America, you may never have experienced a true growth situation. Being the top person in a rapidly growing company can be both thrilling and terrifying at the same time. I guess the whole question revolves around where you see it on the continuum between the two poles.
As a growth employer, don’t mistake a pretty resume from Corporate America for an actual series of accomplishments. Most large companies favor risk averse people for promotions. Personal accountability is diluted. A Director reporting to a VP who reports to an EVP may never had had any responsibility of their own. That’s a dangerous hire as the top person in a growing firm.