Crossing The Chasm Into Mid-Stage Growth

I was recently encouraged to elaborate on the shift a startup CEO goes through when their company has reached the meaningful revenue-generation stage and can see profitability on the horizon.  That’s a book!  Nonetheless, in response to that urging, here’s a basic top-line look at my perspective on the topic.

For those that know me, some of this is repetitive or verbatim from the About Page of my blog.  Anyway, one of my passions is to enable founder CEOs to calibrate their focus and execution as they drive the enterprise value of their business past the early stages of its life.  These CEOs typically started out with an idea and about three years later, perhaps after a pivot, are successful but feel trapped inside the business by HR, Operations, Finance, etc.  These leaders often express a desire to get back to personally driving a key part of the business “like in the early days.”

For founders, this point is often where the start-up has become a ‘going concern’ and is growing in its sector rather than blazing the initial trail.

In the life cycle of any business, there are a number of perfectly normal chasms to be crossed.  For start-ups that are moving into mid-stage life as established firms, this often means crossing the chasm from early stage team to an organization optimized for growth.  It also may mean that it is time for the CEO to think about a COO.  Why a COO?  I elaborated on the importance of a #2 in a previous post found here.

NOTE: optimizing the organization does not mean suddenly hiring a bunch of people and spending tons of money (which can also cause investors and board members to hyperventilate over the new burn-rate).  It does mean, however, that the org chart may require distinct changes to be prepared for next-stage growth.  Egos must be set aside as the skills of everyone in the organization are objectively considered in addressing two key issues:

  1. TEAM NEEDED: What additional skills are required to deliver specific results one-year and two-years from now?  This requires a careful and realistic preparation and review of a strategic growth plan to assess what the most effective AND dollar-efficient organization looks like.  This also may mean re-drawing the org chart with fresh eyes and seeking external perspectives.
  2. SKILLS AVAILABLE: With #1 on the table, evaluate if the needed skills are present among the current team.  Can they reasonably and objectively be developed in the near term?  If not, what are the best roles for those current team members?   This is sensitive, particularly in the face of the great temptation to reward early participants with titles and roles that are often beyond their skills and capabilities vs. placing them in the optimal positions.

If executed properly, three things happen:

  1. The CEO is sequentially and meaningfully enabled to devote more and more of their time to what they do best – be it product or business development – and drive the value of the enterprise from those role(s).
  2. The CEO is also freed-up to ‘be the CEO’and lead the team including the important casting of the business vision and mission without being distracted or embroiled in more granular operational issues.
  3. The management team has a specific organizational hiring plan that is aligned with the strategic growth plan (typically labelled “Rev 27″ ha, ha) and they are accountable to the CEO to execute it.

In stepping back, the foregoing may seem like an over simplification.  In reality, this process must be carefully managed as myriad issues loom around the reasonable feelings of early stage participants and introduction of new team members, often in senior positions. Sensitivity and communication in the planning process is vital.  This should include 1:1 lunches with key individuals where clear decisions are presented along with highly encouraging feedback.  A little patience is in order as well – my experience is that the process takes 60 to 90 days from start to full buy-in by the management team.

The foregoing should a long way to ensure the trip across this particular chasm is a success.

ALS Ice Bucket Challenge – I Did it!

Until you have ice water poured directly on your head, you don’t really appreciate a hot August day.  You freeze, shudder and scream all at once, the same way you would if your daily newspaper arrived with the headline “Rosie O’Donnell and Playboy Sign Deal.”  We’re talking a cardiac-level reaction.  But for ALS, I’d do it every day.


It has been thoroughly refreshing to see people encouraging each other for a worthy cause to HELP & SAVE others at a time when headlines have been rightfully dominated by the heinous execution of a reporter by terrorists “over there” and racial violence touched off by shootings “over here.”  I need distractions along the way to prevent the news-cycle from becoming overwhelming.  To me, a distraction is not denial or avoidance of reality but a breath of fresh air before the next emotional blow.  The Ice Bucket Challenge was a welcome and positive respite; a border-less global event to do something incredibly good at a time when multiple facets of evil stared us in the face.

This is relevant to me in a special way.  Some years ago a friend, Donald Russell, once looked ALS in the face.  He had too many symptoms to leave it to chance and went to see a specialist in Phoenix.  The community of friends and family were preparing for the worst but doing so in positive ways.  We prayed and appealed to God for Don, thanked God for the impact Don made on young people as a school teacher and basketball coach – and very importantly – prepared to be a support group by doing research about what the horrible path would look like.  Thankfully, Don did not have ALS but the experience changed me and since that day, my head turns when I hear the letters A-L-S.

I must note that Don is the husband of bestselling author Karen Kingsbury.  Karen is the author of dozens of “Life Changing Fiction” titles that have sold millions of copies and she can make a rock cry with her prose.  I always wondered if the brush with the prospect of ALS was one of the many inspirations for her heart-tugging stories.

As of today, it’s $70M+ and counting as the ALS Ice Bucket Challenge has become a movement with a million inspirational leaders to who I shout with woeful understatement: WELL DONE.

Career Advice in a Free Book

Thanks to a comedy of errors on a print run, I have a surplus of roughly 500 copies of The Rat, the Race, and the Cage, my book on career planning and decision making.  Don’t ya love publishers?  Anyway, I asked if they could just be sold like the rest of the inventory.  The answer was “Tom, you can do that and make more per book, because at this point the cost to you is zero per copy.  BUT, knowing your charitable side, it made sense to mention that you can also give them away to a worthy organization .”  OK, NOW I get it… and I like the idea of helping some organization out and I am going to do that.  But I also thought – why not let my network of colleagues and friends know and see if they know of a few worthy organizations as well?

The Offer:

If you know of a group (college class) or organization (career support group) that could benefit from receiving some copies that they will, in turn,  give away, then drop me a note.  Just help out with the shipping (books are heavy) and I’ll happily send them your way.  Let’s turn the printing issue into a benefit for people who could use a little career advice in the form of a free book for their career bookshelf.

About the book:

bookThe Rat, the Race, and the Cage shows readers how to make better career decisions through a little self reflection.  The book presents readers a simple model to better understand the three components of their job: the function, the industry in which they work, and the type of company for whom they work.  Analyzing these three things enables the reader to define a “personal career compass” that helps them make better career decisions about job changes.

The Rat, the Race, and the Cage is about finding direction, whether the reader is a college grad or caught in a mid-career rut.  What we do for a living can be more than just a way to pay the bills.  We can find fulfillment and personal satisfaction in our work by making better career decisions – and the book provides information that, one hopes, echoes the advice from career counselors, mentors, managers and knowledgeable friends.

Top 5 Mistakes When Hiring a COO

I recently read an article by Debbie Millin the President & CEO of UpperLevel Solutions, a professional firm that offers COO services to companies looking to fill a skills gap on an interim basis. Debbie indicated that these are the top-5 mistakes that can be made when hiring a COO (summarizing the longer blog article she wrote):

1. Candidates are not senior enough.

You start out thinking you want an executive role, but during your search process you scale it back to something at a lower level because (a) you can’t afford an executive level person – or at least you think you can’t, (b) you don’t want to upset your existing senior managers by bringing in someone above them, or (c) both.  

2.  Candidates are too senior.

You find someone with fantastic experience at Fortune 100 companies coupled with every certification and degree on the planet and naturally assume this person must be brilliant and will lead your company to greatness.  9 times out of 10 this person is trouble to a growing company (culture misfit).

3. You don’t listen to your existing management team.

You have hired your current management team for their skills and knowledge.  They may have some insights you don’t, or they may not be able to articulate anything but a gut feel.  Don’t dismiss that.  You may need to sort through any politics that are feeding into their thought process. Listen to them.

4. You limit your search to candidates within your industry.

This is often a very big mistake.  Of course there are some specific industries that require very specific experience, but that is the exception not the rule.  Don’t limit yourself.  Find a good, smart ops person and they will learn your industry quicker than you think.

5. You are only looking for local, full-time candidates.

Many employees only visit an office a couple of times a week, if at all.  If someone has a computer and phone – and the right background – they can get the job done for you. Think about what’s right for your culture.  You might truly need a COO-level person, but only need them part-time.  

Shrewd advice!

Debbie can be found at:

Business Books: The Great 8

I recently purged my bookshelves of books that I have not re-read or touched in the past decade. Goodbye to “Who moved my Cheese” and “Barbarians at the Gate” among other titles.

The process allowed me to reflect on the topics that comprise the “keeper” volumes in my library.  Eight titles stood out among those that stayed on the shelf.  These are regularly recommended to ALL entrepreneurs under 30 that I mentor:

- Good to Great by Jim Collins
Yeah, the companies have changed but the principles have certainly not.

 - The Art of War by Sun Tzu
The psychology and strategy of leadership and engaging the competition.

 - Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne
Exposed (yet again) the fallacy of “doing the same things better” as competitive advantage and exposed it as a (very effing fast) race to the bottom.  Instead, it proved the value of the innovative creation of the truly new (and HOW and WHY such can be measured) when it comes to Product Management.

 - Competitive Strategy by Michael E. Porter
I still reference this book at quite often.  The competitive grid is pretty much stained into a permanent shadow on my whiteboard.

 - The One Minute Manager by Kenneth Blanchard and Spencer Johnson
OK, yes this is a “popular book” – but the timeless truth of simple management wrapped into a easily accessible parable makes this a keeper I refer to young managers.

 - The Innovator’s Dilemma by Clayton Christensen
This book took me by surprise as “everyone was reading it.”  My take was that this book builds bridges back to, or ratifies, Blue Ocean Strategy and many sub-points within Porter’s classic.

- Built to Last (1994), by Jim Collins and Jerry Porras
Two books by Jim Collins was not intentional and I am not a pure-play fan boy of Jim’s but the depth and diversity of the examples is what keeps this book on my shelf.

 - The Lean Startup by Eric Ries
The first time I finished reading it, I went back and read it again.  Notes, highlights and more notes.  It was an instant classic for me.

There you go – my “Great Eight” business titles.

Top-10 Peter Drucker Quotes

Like many of you, I have been tremendously influenced by Peter Drucker.  The other day I was reminded that it was the 50th anniversary of the publication of Drucker’s classic Managing for Results.

In that light, I pulled together my top-10 favorite Drucker quotes:

  1. There is nothing so useless as doing efficiently that which should not be done at all.
  2. Innovation is the specific instrument of entrepreneurship – the act that endows resources with a new capacity to create wealth.
  3. Management by objective works… if you know the objectives. Ninety percent of the time you don’t.
  4. Rank does not confer privilege or give power. It imposes responsibility.
  5. Unless commitment is made, there are only promises and hopes, but no plans.
  6. No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.
  7. Most of what we call management consists of making it difficult for people to get their work done.
  8. Efficiency is doing things right; effectiveness is doing the right things.
  9. Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.
  10. Management is doing things right; leadership is doing the right things.