Some years ago, I came up with a new idea to explain the role of leadership in business, especially in new and growing businesses.
The spark that ignited my thinking was an essay by an Ivy League professor in a business magazine. His thesis wasn’t unusual. He was arguing that CEOs are overpaid and that leading a successful business does not require genius or any other unique leadership quality. It’s all about luck and timing. Therefore, the people that happen to be running companies that experience explosive growth should not be overpraised. In terms of value, they are on par with every other executive.
There’s no doubt: Running a large business requires the participation of dozens or even hundreds of smart and hardworking leaders, including senior executives, division CEOs, and department managers.
But starting a company from scratch and growing its revenues to reach the million-dollar mark, and then growing the business again to the ten-million-dollar mark, is rarely done with the sort of management structure that is typical for Fortune 500 companies. It is almost always driven by a single individual. A single fanatically dedicated, extremely demanding, and endlessly energetic person at the top.
Read the biography of any of the great industry builders – from Andrew Carnegie to J.P. Morgan to John D. Rockefeller to Henry Ford – and you will see that in the early days of their careers they were all that sort of person. If you prefer contemporary examples, study the careers of Sam Walton, Jeff Bezos, Rupert Murdoch, Steve Jobs, or Elon Musk. You’ll see the same hard-driving personality at play.
I’ve been writing about these amazing company starters, in one form or another, since I began writing about business building and entrepreneurship in Early to Rise 25 years ago.
In Ready, Fire, Aim, The Reluctant Entrepreneur, and in dozens of essays, I have argued that much of what is said about entrepreneurs in popular business magazines, bestselling books about start-ups, and courses on entrepreneurship taught at major business colleges in the US is – from what I’ve seen and experienced – just plain wrong. For example, one of the common “truths” about successful entrepreneurs is that they have a high tolerance for risk and are willing to bet everything on an idea they have. I have never known a successful entrepreneur who fit that description. On the contrary, one of the defining features of those who are successful in starting multimillion-dollar businesses is an acute aversion to risk.
In Ready, Fire, Aim, I described what I call the four stages of entrepreneurial growth. I delineated the stages by revenue: (1) zero to a million, (2) a million to ten million, (3) 10 million to a hundred million, and (4) beyond a hundred million. Each stage, I argued, has its own unique challenges and opportunities. And, therefore, breaking through each of those barriers requires the person that is leading the growth to recognize the markers of change and adjust accordingly, leaving behind the practices and policies that had worked in the previous stage.
It is a rare skill, but there is more to it than that. This person must also be able to generate the same level of intensity and focus that he was able to generate during the previous stage. I have watched many would-be entrepreneurs succeed at Stage One, only to fail in Stage Two or Stage Three. I have also watched a handful of people lead their businesses through all four stages with amazing speed.
So what did those people have that accounts for the level of their success? Could there be a common denominator? Could there be some combination of ingredients – some quality of character or an approach to growing an early-stage business – that makes up the secret sauce?
That is hardly an original question. Dozens of books had been written about it by the time I started thinking about it, and dozens have been written since.
Those books offered a host of plausible answers, including a few that seemed undeniable, such as an abundance of energy and a willingness to work 24/7 to accomplish a goal. But I knew more than a few entrepreneurs and CEOs with those characteristics who did not have great success. Which meant that there must be something else.
I continued thinking and writing about that question. Meanwhile, my primary business interest had grown into a large, complex company with hundreds of information products published every year by more than a dozen semi-independent profit centers in the US and another dozen in various corners of the world.
Having a top-down view of all these small businesses meant that I was able to observe their growth patterns. What I saw was that a significant number of them struggled to grow beyond Stage Two. Most grew, but slowly, at 10% or 15% a year. And a few had the kind of explosive growth I was looking for – moving from Stage One to Stage Three ($100 million) by growing revenues by 25% to 50% for stretches of five to eight years.
The people who had driven that explosive growth did, indeed, have the already-identified abundance of energy and willingness to work 24/7 to accomplish a goal that I had expected to see. And I found four more characteristics that they shared.
1. They were very competitive. Three or four of them were outwardly aggressive, though a few were laid back and even deferential. Loud or quiet, well-spoken or crude, like every hyper-successful business builder I’ve ever known, they were all constant and indefatigable competitors. They were not just unafraid of competition, they saw it as the “fun” part of playing the game.
2. They were addicted to speed. They wanted everything done yesterday, and were willing to gently or harshly push on their teams to move quickly by working harder and longer than seemed reasonable.
3. They were insensitive to the disruption and chaos they caused. One of the primary agents in growing a business is change. Which means that growing a business from Stage One to and through Stage Three takes a certain level of insensitivity on the part of the person at the top. Company protocols and policies may need to be changed. Products and marketing, too. And sometimes employees – even good, talented, hardworking employees – need to be moved out or around. None of that is pleasant. Or easy. Or certain. It takes a certain kind of person to not just allow but continually make that happen – to push ahead when, with every step forward, something or someone is falling apart.
4. They were motivated by doubt and criticism. This came to me late in the process, because it came from thinking about what motivated me. I was cognizant of the fact that I was a walking display of all the ingredients in the secret sauce that I had thus far discovered. And perhaps because of that, I had to admit that if I had to choose the one thing that gave me the greatest motivation to accomplish almost anything it was to prove doubters and naysayers wrong. I don’t see that as a virtue. At best, it is a double-edged sword. But once I saw it in myself, it became easy to see it in others. Since then, I’ve asked just about every successful businessperson I know about it, and every one of them, without exception, has admitted to the same thing.
The secret sauce was coming together. I wasn’t sure I had all the ingredients, but I was confident that I had most of them. So rather than waiting for my idea to be fully baked, I felt that the time had come to give it a trial run.
I was invited to speak at a conference on business growth in Dubai, so I decided to present it there and see what the attendees felt about it.
I knew that to give the idea any chance of being accepted, I had to make it simple to understand. I had to come up with a proposition that would arrest attention, a thesis that would be persuasive (or at least sound reasonable), and facts and examples that would push the idea beyond the line of disbelief.
What I came up with was an agricultural metaphor:
In business, as in nature, growth is not an option. It’s a first and forever must.
The proposition: If a business is not growing, it’s dying. It may not look like it’s dying. You may be able to convince yourself it’s not dying. But that won’t change what’s happening at its core – at the cellular level.
The thesis: Maintaining a healthy level of growth in a business, as in a garden, requires two kinds of devoted attention: cultivating and maintaining.
Extending my metaphor, I decided to call the people fanatically devoted to “cultivating” a business Growers, and the people fanatically devoted to “maintaining” a business Tenders.
Growing and Tending… Metaphorically Speaking
It was no coincidence that I used an agricultural metaphor to promote this idea. I was in the early stages of developing Paradise Palms, a botanical garden, and I had discovered that it was very much like growing a business, depending on people with two very different mindsets, instincts, and skill sets – one for growth and one for maintenance.
I was focused almost entirely on growth, working relentlessly to grow Paradise Palms from the five acres I started with to the 25 acres it occupies today. Meanwhile, to manage the property, I depended on a handful of people focused entirely on keeping it in shape – solving problems and avoiding future problems – despite the innumerable setbacks and obstacles that gardening is heir to.
Looking back on the first five years of the Paradise Palm’s development, I realized that I had spent 80+% of my time thinking about growing it. They had spent 80+% of their time thinking about tending it as it grew.
Growers are inspired by the idea of growing the business as large as it can possibly be. They worship at the altar of More and Bigger. Thus, they are forever pushing a more and bigger agenda. And forever pushing the people that work for them to work harder and longer, even if they are already working 50 or 60 hours a week.
Tenders are inspired by the idea of getting the business to run like a well-oiled machine. They worship as the alter of Peace and Order. Thus, they are forever pushing a peace and order agenda. And forever working to solve problems, mitigate disputes, and simplify complexity in operations.
In the early stages of a company’s development, its leadership must be mostly about growth. If I had to pick a ratio, I’d say it should be 80% about growth and 20% about tending. As the business grows, the ratio changes. For very large (billion-dollar-plus) business, it would be the reverse: 20% about growth and 80% about tending.
The Challenge for Every Business Founder and CEO
To launch and develop a large and healthy business, you need both Growers and Tenders – Growers to grow the business and Tenders to keep it healthy as it grows.
Growers are rare birds – but no business can succeed without at least one Grower working relentlessly to create growth.
Tenders are more plentiful and therefore much easier to find – a good thing, because no business can succeed without having multiple Tenders working to manage the mess and chaos that the Grower creates.
But that doesn’t mean you can hire just anyone for the Tender job – especially if your business is in its early stages where the rate of growth is fast and steep and things are constantly changing. Tenders need to have great intelligence, deep industry knowledge, and an ability to negotiate and keep workers happily employed. But they must also feel comfortable with change – and Tenders with that added characteristic are not easy to find.
