Most businesses start with vigor and willpower. Truly breakthrough businesses launch and fly with such an impassioned sense of mission that it changes the market and the communities where their offices are located.
As they climb the curve of growth based on an innovative product or service that creates a new form of value in the marketplace, they begin to manage their growth carefully, which is a good and healthy move.
The role of management is to grow the firm while reaching operational excellence, to a well-oiled machine where every penny has been managed to the best of human ability. This is more a science than an art and a consulting industry and business schools have been built around this model.
Then, something unexpected happens. The market stagnates or matures. Competitors prove more agile and cunning. Regulations change. Customers just don’t value you as much as the good old days.
Management is a fixed set of tools that cannot correct such seismic predicaments. Often management will continue doing what got the company initial winning results even though the world has changed utterly.
As the first wave of growth trends downward and the curve becomes a flat line, it is time for leadership, not management.
With unflinching courage, vision, and a process for discerning and properly defining the actual problems, leadership must prevail. To create a second wave of growth, the business has to be re-thought, re-contextualized in the present moment.
Generating several paths of growth, prototyping the ideas, testing with customers, changing the business model can transform a company, preparing it to grow and surf a growth wave for a second time in its corporate lifecycle.
This vital form of leadership also requires a disciplined process, but it is a far different process than management; in fact, it is a different scope and brain altogether.
So, how do you know when solid, smart management has outrun its course? The numbers tell the story. Value is decreasing while costs increase.
At such times it is important to take a sober inventory. Has the muscle of management extracted and exploited all of the value it can from an existing business model? Should you just manage a little better, a little more? If so, would the results be worth the trouble? Or, has the first wave of growth passed?
Or, is it time for management to stop flexing and allow the leaders to envision the second wave of growth? If so, such a time calls for authentic leadership.
Jocelyn Atkinson and Michael Graber run the Southern Growth Studio, a strategic growth firm based in Memphis. Visit www.southerngrowthstudio.com to learn more.