There seems to be an endless number of roles for entrepreneurs to play—from sales and marketing to janitor, customer support, and IT. Entrepreneurs often find themselves fulfilling all these roles, often on the same day.
One of the most critical mistakes that you, as an entrepreneur, can make is not knowing when to switch roles. Even worse is not recognizing the three core roles within any organization.
During my entrepreneurial journey, my businesses have suffered as a result of my trying to hang on to certain roles for far too long. Too often I was so busy swatting at gnats that I would swallow the fly. I was majoring in the minor. This not only hindered growth but also resulted in anemic leadership.
If you think you’re leading but no one is following, then you’re only taking a walk.
To successfully lead your team and organization, you have to be clear about both your role and the role others on your team play.
The best analogy explaining the three roles inside organizations comes from Stephen Covey’s book The 7 Habits of Highly Effective People. Mr. Covey’s explanation takes up barely one page, but those few words can transform your business.
Here is his explanation of the core roles:
Let’s assume you own a timber company and you’ve been hired to clear a large tract of land. Your producers are out in the thick, swinging their machetes and axes and chopping down the trees.
Your managers are those scheduling a rotation of producers, ensuring that they get water breaks, and setting the policies and procedures to ensure their safety.
The leader, on the other hand, is the person who climbs the tallest tree, surveys the land, and shouts down, “Wrong tract of land!”
Simple, yet profound. Let me ask you, in which role do you spend most of your time? Is there a role you need to spend more time in? Let’s spend a few minutes exploring each of the roles and discussing how to ensure they are all working in harmony.
The producer’s role is to create direct value through their actions. Almost every action they take generates revenue.
Think about the activities of someone swinging an ax, swinging it over and over until the tree falls, and then moving on to the next tree. Each swing of the ax is directly tied to clearing the jungle, which in turn produces revenue for the company.
Too often entrepreneurs make the mistake of treating producers as managers, or, even worse, as leaders. By treating producers incorrectly (as managers or leaders), you hinder what they do best—produce. Ever heard of the Peter Principle? Give it a quick search and you’ll see exactly what I mean.
As an entrepreneur, it’s your responsibility to ensure everyone on your team is trained and capable of performing their role a little bit better each day. Here are a few ideas to help your producers get better:
1) Tell Them the Why
As the leader, it’s imperative that your producers understand why they are performing their specific roles and why it matters. They need to understand your company’s mission and vision and how their daily actions impact both.
2) Set Clear Boundaries
Producers need to know the boundaries. Without boundaries clearly in place, things can take a turn for the worse quickly. Your boundaries should not only include the “don’ts” (don’t do this, don’t do that) but should also include the “dos” (do it this way). At Ugly Mug Marketing, our boundaries include Operational Out of Bounds and Terminal Out of Bounds. Terminal Out of Bounds includes things that will likely result in immediate termination. Operational Out of Bounds encompasses things that need to be corrected and discontinued.
3) Explain How You’ll Measure
Once you’ve taken the time to explain the why and set clear boundaries, you now need to let producers know exactly how you’ll measure their performance. For example, if you were implementing the jungle-clearing example above, you would let producers know their performance would be measured by the total number of board feet they cut down each day.
This is where many entrepreneurs screw up. You see, most entrepreneurs end up measuring the wrong things. Using the same example, most entrepreneurs would base their measurements on the total number of trees each producer cut down in a day. However, this would be a mistake. The reason?
If producers know their performance is going to be measured based on the number of trees cut down, it will incentivize them to cut down all the small trees. They may walk past dozens of large trees in pursuit of smaller trees simply to boost their performance numbers.
Seems simple enough, right? And yet so many entrepreneurs never take the time to measure the performance of their producers. What you measure improves. Schedule time with your team and discuss what metrics should be used, how and when those metrics should be reported, and how those metrics may be adjusted over time.
The manager’s role is to help each producer maximize their efficiency. A manager’s role is not to produce, but to enable the producers to be as streamlined and stress-free as possible.
Managers help establish the boundaries and work to ensure each producer is operating within those boundaries. Managers create schedules and procedures to keep the producers focused on what they do best. And while none of a manager’s actions are directly tied to producing, all of a manager’s actions help the producers be more productive.
As an entrepreneur, it is your responsibility to empower your managers, who in turn empower the producers under their care. Here are a few ideas to help your managers lead effectively:
1) Servant Leadership
All too often, particularly in America, we are ingrained with the notion that the further up in the organization you move, the more people you have serving you. Sure, it’s your company, so you can take this approach if you’d like. However, I believe there’s a better way.
Servant leadership says the higher up you move in an organization, the more people you have to serve (not the other way around). It’s your responsibility to train your managers to serve your producers, and the best way to train them is by your example. You, as the leader, should be serving both your managers and your producers. More on that in a minute.
2) Efficiency Matters
Managers need to clearly understand that their role is to help each producer achieve maximum efficiency. It’s the manager’s role to develop the policies, procedures, and guidelines that will lead to efficient production. Your managers should stay focused on removing obstacles that hinder productivity and empowering producers to be the best version of themselves.
3) Move the Metrics
Your managers should be focused on key performance indicators (KPIs). KPIs typically fall into two categories: leading indicators and lagging indicators. Managing via leading indicators will ensure that your managers are generating the right types of efficiencies from your producers.
A leading indicator is anything that provides clues as to whether you’re on track to hit your goals. At Ugly Mug Marketing, we sell custom websites, so examples of our leading indicators include the number of inquiries, the number of quotes submitted, and the number of formal proposals submitted.
Each of these leading indicators helps to determine whether we’re on track to hit our goals, and each builds on the next. Receiving more inquiries means we submit more rough quotes, which means we submit more formal proposals, which means we sell more websites.
What are the leading indicators your producers should be focused on? Do your managers know what these leading indicators are? Do they understand how these KPIs directly relate to your vision and goals?
As an entrepreneur, this is your role. Think for a minute about some of the all-time great entrepreneurs. The trait that unites them is the ability to clearly articulate where a company is going and why it matters.
As a leader, you have to allow managers to manage and producers to produce. This can be a huge challenge, particularly if your business is a start-up and you’re filling all three roles yourself (leader, manager, and producer).
During the start-up phase, things are often hectic and crazy, but never forget that as an entrepreneur, your primary role is to lead your organization. Managers focus on doing things right. Leaders focus on doing the right things.
Leaders must regularly climb to the top of a tree and survey the land down below. They look to ensure their team is clearing the right tract of land, but of equal, if not greater importance, they look for new uncharted territories and opportunities.
Here are a few ideas to help you better lead:
1) Create a Vision
The Bible says, “A people without a vision will perish.” This fact holds true in business as well. Think for a minute about the fastest-growing, most inspiring companies in the world. What makes them so inspiring? Chances are good they have a compelling vision of the future.
As the leader, you have to create a vision that inspires others. A vision that paints a brighter future. A vision that motivates people to take action.
Tip: We’ve found it’s most effective to create a vision that looks three years into the future.
2) Begin with the End in Mind
With a vision for the future in place, now is the time to establish a plan of action for getting there. How will the vision become a reality?
Take your vision and break it into meaningful and measurable goals. Start by asking, If we’re going to end up there (the vision) in three years, then where do we need to be by the end of the first year and second year?
Next, break each year into quarters and determine exactly what objectives you need to hit each quarter to ensure you reach your goals by the end of the year.
3) 80/20 Rule
As your organization grows, don’t ignore the 80/20 rule. Your goal as the leader should be to spend 80 percent of your time developing and empowering your people and the remaining 20 percent of your time creating and reevaluating the vision and direction for your company.
Here’s a litmus test to help determine your level of leadership: the less direct impact you have on the bottom line, the more effective a leader you’ve become.
One of the most difficult transitions for entrepreneurs is moving into the role of leader. What once served you so well (producing and managing) will only hinder you as you grow your organization.
The tough call is knowing when to let go . . . and lead.
A manager’s role is to determine the most efficient way to get team members (producers) to climb the ladder of success. The leader’s role is to determine which wall to place the ladder against.
So let me ask you: In which capacity are you currently serving your organization? What is needed to help you make the transition into the role of a leader? More often than not, making the transition is about learning to let go. Letting go of things that may have at one time served you well. Letting go of limiting mindsets that will keep you stuck in roles you no longer need to fill.
Step into leadership. Your team needs you leading, and the world needs more leaders like you!