What are level 5 leaders? Why a new team member produces a new version of a team & Small Giants
9 October 2022 Newsletter
“Don’t talk about growing revenue. Talk about growth in GP dollars or GP %, maybe even Net Profit” – Bo Burlingham
Hope you’re Thriving!
As we move toward the last quarter of 2022 and look back, it’s been such an unusual year.
I started 2022 watching others set new year’s resolutions – which is something I’ve never really entertained. Still, that observation prompted me to ask what I would like to be different this year, and when I reflected, it was to complete my Onboarded book.
In January 2022, my home state of Western Australia was still in lockdown; we weren’t allowed to leave the state until mid-March!
Then when the borders opened, many people were either sick or in isolation, and gradually things started to feel more normal again. But one of the big things I haven’t yet discussed that changed this year was the decision to transition from a single-person business to a small team here at Evolution Partners.
In January this year, I decided to have another coach called Andres Zylberberg join me and my Executive Assistant Briony Freeman, to form a small team dedicated to the purpose of building great businesses.
As you’d imagine, Andres went through two gruelling months of Topgrading – the hiring process we recommend, with myself and a Topgrading recruiter from North America.
In July, he finished his three-month onboarding. This was an excellent opportunity to follow the onboarding process outlined in the Onboarded book – learning ourselves along the way.
Andres was the internal coach at VGW, a bona fide Perth success story that went from 40 to 400 people when he was there, and he is a certified Scaling Up coach.
Having Andres and Briony join me transitions Evolution Partners from a one-person coach into a firm; however, it doesn’t change my commitment to you.
If anything, it increases it.
My belief here is that the sum is greater than the parts, and we continue to improve the tools and work we do to build enduring great companies. I’m not trying to scale my business. Instead, I’m working on the Small Giants principle by Bo Burlingham. See below for more on this.
Andres is running both one-on-one programs and groups as a leadership team coach of Evolution Partners.
Our absolute focus is on helping you build a great business you love.
Every time a new person joins a team, the team becomes a new version of itself
Continuing excerpts from my new book Onboarded which is due for release on the first of November, here’s a snippet about how onboarding affects culture
Every time a new person joins a team, the team becomes a new version of itself.
If you had a social basketball team playing evenings with four of your middle-aged friends, and one of those friends left and was replaced with Michael Jordan, you now have a new version of your team. Sure, your chances of winning have dramatically increased, but your new star recruit doesn’t know the culture you and your friends enjoy. His expectations and commitment may be different. And his understanding of the technical and process aspects of the game is different from other team members. The team has been fundamentally reinvented because you have added one new member.
If you replace a single person in a work team of seven, that team is now a new version of itself. Is the new person loud or quiet? Do they have a high or low IQ? Are they aggressive or passive? Are they social or an introvert? The new person might only represent 14 percent of the team, but they create new dynamics across the entire team and how the team operates.
When you incur onboarding debt, that new version of the team, with all its misunderstanding, is the seed that grows into cultural problems.
There’s a great irony here because employees already know this. Gallup found that only 12 percent of employees strongly agree their organisation does a great job of onboarding new employees. At the same time, Jenna Filipkowski from the Human Capital Institute identified that 58 percent of organisations say their onboarding program is focused on processes and paperwork.
The induction process should have an administration and compliance focus.
The onboarding process should be structured and strategic, with a focus on people and understanding.
Leaders’ best efforts to improve their company culture will be worthless if a new hire joins the team who is not a successful fit with the culture. Because when the team reinvents itself to incorporate this new team member, the new hire’s onboarding debt will negate any leaders’ improvements to the culture. That is why you must address the root cause of cultural issues before you address the culture itself.
Get your onboarding working well, and then improve your culture.
In my book Made to Thrive, I note, “If we look back to the origins of the word culture, it is derived from the Latin word ‘colere’ which means to care or to cultivate.
In the context of your role as a CEO, when it comes to culture, your job is to care for or cultivate your people.”
I go on, “Imagine you are the custodian of each person you employ. Of course, eventually, every person will leave to get another job, so each person has a beginning, middle and end with you. As their custodian, during this time, how are you cultivating your people? How are you caring for them? After the end, will they look back on their time under your custodianship as good or great?”
To apply that concept logically, one might suggest that the way to build a lousy culture is not to care or not cultivate your people.
And that’s the key to successful onboarding. Managers are caring enough about new hires to spend time and build an onboarding plan to cultivate them. And with that insight, let’s amend the statement above.
Get your managers caring about onboarding enough to spend the time and build an onboarding plan to cultivate new hires and then improve your culture.
Ask yourself and your managers, “How do you cultivate a new hire under your custodianship? What do you do in the first weeks or months to cultivate them?”
Small Giants
Above I mentioned the Small Giants concept. It’s from one of the books to change your perspective about what building a great business actually means.
I can perhaps interpret it as bigger isn’t better. Better is better.
People who learn principles from the leaders and companies profiled in Jim Collin’s book Good to Great sometimes wonder if the lessons from large, publicly owned companies translate to their small businesses. For example, it may be hard to “fire bullets, then cannonballs” when you only have a three-person team!
Author Bo Burlingham wrote Small Giants: Companies That Choose to be Great Instead of Big as a study of smaller companies and their leaders.First, he interviewed many leaders from private businesses featured in his magazine over the years, and then he shared what makes them different – and better than – their peers. These entrepreneurs aren’t focused on the idea of an IPO or acquisition, but they are committed to building an exceptional business using other measures.
Next, Burlingham met with the founders, leaders, and employees of fourteen companies he profiled for the book. The smallest company was a two-person fashion design firm (Selima), and the largest company was O.C. Tanner Inc., with 1,900 employees and annual revenue of $350M.
Burlingham found some key areas that the Small Giants in his study excelled at:
1. Don’t Grow for Growth’s Sake – The founders and leaders of the Small Giants could resist the pressures and temptations to expand too quickly or in the wrong direction – or even at all. In short, they feared growth could result in a loss of control and compromise their values and excellence.
2. Focus on Exceptional Customer Value – The Small Giants have exceptionally intimate relationships with customers and suppliers, based on personal contact and a mutual commitment to delivering on promises. They focus on customer value and the highest levels of customer service.
3. Give Back Locally – Each company in the study had an extraordinarily intimate relationship with the local city, town, or county in which it did business – a relationship well beyond the usual concept of giving back.
4. Employee Relations Comes First – Small Giants prioritise intimate relationships with employees. Employees never doubt that the company, its leaders, and the other people they work with care about them personally. Similarly, they will stand by them through thick and thin as long as they hold up their end of the bargain.
5. Share a Higher Purpose – The leaders of these Small Giant companies constantly and consistently share their overarching mission; their Why. The mission is different for each organisation, of course, but in all cases, it rises above and beyond profits. These profits are a way to fuel the mission, not the ultimate end objective.
6. Be a Passionate Leader – The founders and leaders of the Small Giants have a passion for what the company does. Above all, they personally care about the subject matter and are focused on keeping that passion alive throughout the company.
7. Focus on Results – Don’t get to this point thinking the results don’t matter. Every Small Giant survived or thrived only through achievement.
It’s been perhaps fifteen years since I read Small Giants, and perhaps we’re not doing it all now, but the concept percolated in the background. And now, this year, we’re doing something about it.
Good Read: Small Giants: Companies That Choose to be Great Instead of Big
This week on The Growth Whisperers Podcast
What are Jim Collins Level 5 leaders?
Level 5 leadership is a concept developed in the book Good to Great. Level 5 leaders display a powerful mixture of personal humility and indomitable will. They’re incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its purpose, not themselves. While Level 5 leaders can come in many personality packages, they are often self-effacing, quiet, reserved, and even shy.
This week we discuss what makes a level 5 leader, why level 5 leadership matters, and the challenge that comes with being a level 4 leader. Also we provide examples that we’ve seen where individuals and companies have successfully built level 5 leadership.
Episode 130 – The Growth Whisperers
Listen to The Growth Whisperers
Or watch it on YouTube
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Keep Thriving!
Brad Giles
