A successful entrepreneurship is a wonderful thing – signifying the success of a small team that has done EVERYTHING it took to build a business. Generally, a founder adds a few trusted people, and everybody pitches in and gets the job done. Roles and responsibilities are understood, but not defined or documented. When needed, the sales person jumps in and helps production or shipping. Processes are flexible, and undocumented. No two days are the same, it is exciting, and the company achieves tremendous growth. Everybody is busy.
As the business grows, and there is more budget available, more people are added. Quite often these new people don’t have the same drive and enthusiasm. Most businesses find at this point the need to start documenting “stuff.” Policies are developed telling people to show up on time, when they can take breaks, how much vacation they get, and pretty much anything else required to answer questions somebody asks. Every time there is a problem a policy is created so the problem “never occurs again.” Nobody ever intended to build a bureaucracy, but all of a sudden the founder looks around, and there it is. A bureaucracy. And, running the business is not fun anymore.
Paul Palmes mentions this: “While policies are important, personal policies of the organization’s leadership are extremely so. The progression from entrepreneurship to bureaucracy can be slowed significantly through demonstrated policy-based behaviors that true leaders exhibit throughout the day. Leaders use, practice, and embrace policy to everyone’s advantage; the organization is understandable and its practices consistent through just watching and listening to its leaders. Rather than emphasizing reliance on requiring an employee to remember organization policies, leaders know that employees learn most directly through observation of how they interact with all employees.” (Sustaining Success, Quality Progress, April 2018, p49).
With apologies to Mr. Palmes, I see this as a wordy version of “IT’S THE CULTURE, STUPID!” One way of defining culture is the expected and accepted behaviors in an organization.
Let’s go back now and look at our growing entrepreneurship. At the point new people were added that did not have the same drive and enthusiasm as the original team, the original team had assumed the new members were going to perform just like everyone else on the team. However, it quickly became apparent these people were not engaged to the same extent as the original team. At this critical point, nobody set expectations for the new people. Nobody wanted to have the uncomfortable discussion, nobody set clear expectations and gave feedback, and that is when the company’s culture changed. This new behavior was accepted, and every new employee sees it. The founder becomes frustrated, and starts writing policies to address every situation, and BOOM. There is your bureaucracy.
At some point, the business will grow and some documentation is required. Any process that needs to produce consistent results and is performed by more than one person will need to be documented. This usually starts with things like assembly processes – every single widget has to perform according to customer expectations, no matter who assembles it. When onboarding new employees is done by more than one person, we need to start documenting expectations – usually leading at some point to an employee handbook.
I am still certain, however, we should only document what we absolutely have to. Creating a policy to fix every problem leads to more and more paperwork. We should not create policies to relieve supervisors of the responsibility of being a leader. When there is a performance or behavior problem, the leader needs to address it with the individual, not write a policy affecting everyone else in the organization who are doing a great job! While we praise in public, correct in private, word does get around. People see what behaviors are accepted, and adjust their behavior appropriately.
The other point I see in Mr. Palmes statement is the Law of the Picture (The 21 Irrefutable Laws of Leadership, John Maxwell). Leaders must demonstrate the behaviors they want the team to use. Clearly, teams must treat each other respectfully. Leaders must demonstrate this behavior. Don’t confuse respectful behavior with lack of conflict. I expect conflict, sometimes passionate disagreement, on teams. The conflict is about ideas, not people! Setting the expectation of respectful behavior makes it clear workplace bullying is not acceptable. The leader who corrects disrespectful behavior right away avoids getting to the point where workplace bullying is occurring and a lengthy policy is required.
As your company grows, be deliberate about the culture you create. Decide what the culture should be, and set the expectation on what behaviors you will accept. Then, within that culture, you can establish the minimum policies and documentation needed to support and sustain that culture.
If your entrepreneurship is growing, and you are not deliberately creating a culture, one is being created for you. Let’s talk so you can create the culture you want to work in!