Picture this. There is a strong innovative company led by a charismatic and innovative founder. Having built the company from scratch, the founder is motivated to build a company that is truly great.
In order to achieve this goal, she keeps looking for new ideas to launch and takes risks to launch innovations in the market. With a strong knowledge of her industry, she is respected by the staff who would like to achieve the vision set out by her.
However, that’s where things get a bit complicated. With all good intentions, the staff are unable to make the idea into a reality. What would otherwise have been a million dollar business never takes off. The reason – There is no Level 2 below the founder with sufficient experience and motivation to drive the idea. The founder cannot concentrate on new ideas herself as she has to attend to innumerable aspects of the business. Again, the reason why she is inundated with so many operational issues is that there is no one at Level 2 who can be delegated the task. This vicious circle leads to a gradual decline of the business.
This scenario plays out regularly in Small and Medium Businesses (SMBs). The absence of a Level 2 means that the business can neither run its operations properly nor take on new business initiatives. Further without a Level 2, the business is doomed should anything happen to the founder.
Why does this happen?
There are several reasons for this sad situation some of which are listed below:
Building a Level 2 is expensive and tough
Senior experienced professionals cost a lot of money. They come with their own aspirations and even idiosyncrasies. There are few high quality professionals in the market with such skill sets.The attitude of most founders is “Why should recruit someone with such a high salary with no guarantee of success. I can do this myself!”
Need for control
Founders being strong personalities in their own right are usually control freaks. They like to be in charge of their businesses and find it extremely difficult to cede control to other people, however experienced they may be.
Inflexibility of vision
Most founders have VERY a very clear picture of what their idea should be. Even if they hire someone to execute the idea, they don’t allow enough freedom for the person to execute in their own style. If it is not exactly corresponding with the founders idea, the work is found unsuitable. This is unacceptable for many senior experienced professionals.
Short term view
Some founders don’t plan with a clear intention that they would like to pass on a legacy. That is why many companies that may be great fold up when their founder is no longer around.
What needs to be done
As a founder, you need to break this vicious circle.
Founders definitely would like to see their companies grow rapidly. They would also like to leave a legacy behind when they move on. To be able to achieve this, it is necessary to build a Level 2 in your organization. Having a Level 2 brings some of the following benefits:
Frees up the founder to do what she does best
Many founders prefer to specific types of tasks. A technology oriented person would prefer to work on innovative technical products rather than manage sales and marketing. Having a Level 2 with the right skills, helps make this possible
Allows for better execution
Both operations and new initiatives can be driven by Level 2 professionals once the broad vision is enunciated by the founder. The founder can oversee both areas without compromising on one of them.
Helps validate ideas
With an experienced Level 2, founders get positively challenged before the idea is even executed. While it is the call of the founder to move on or not, the idea gets refined and possibility of success increases.
Makes the organization more resilient
Without a Level 2, founders cannot even afford to call in sick! Having a Level 2 and a succession plan enables the organization to exists should anything ever happen to the founder.
Summary
Having a Level 2 is key to having a stable and innovative organization. Shortsighted approaches that exclude creation of a Level 2 could lead to a gradual decline of the organization at best or sudden closure at worst. By creating a Level 2, founders should begin a virtuous circle that will result in stronger organizations.
(Confidis is a management consulting company. Confidis works at the intersection of business and technology.)