Latest / The Start, Scale & Succeed Podcast / Over-Synergized: You’re Not in Whitewater… Yet with Scott Ritzheimer (stages 3,4,5) - Ep. 432

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Over-Synergized: You’re Not in Whitewater… Yet with Scott Ritzheimer (stages 3,4,5) - Ep. 432 · The Start, Scale & Succeed Podcast

0:00
Scott Ritzheimer: Hello, hello, and welcome, welcome once again
0:03
to the Start Scale and Succeed podcast, the only podcast that
0:07
grows with you through all seven levels of your journey as a
0:11
founder. Over the next few months, we're going to spend a
0:13
lot of time talking about the seven levels that founders face.
0:17
But before we do, I'm trying to squeeze in a little mini series
0:20
here about the stages that organizations go through. Most
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importantly, we're talking about this really difficult stage, the
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third stage in the process that is called whitewater. And
0:34
whitewater is what prevents organizations from getting to
0:37
predictable success. It prevents them from scaling. It prevents
0:41
them from achieving all the vision that you have for your
0:43
organization. Now, whitewater is not inherently the proof that
0:50
something has gone wrong, although it feels that way
0:53
because it's a really, really difficult season where
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complexity is piling up. We're making mistakes and errors.
0:58
We're losing confidence. We're losing profitability, or we're
1:02
fighting with our team. We're frustrated by their performance.
1:05
There's a lot of stuff that goes wrong in this whitewater stage.
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If you're unfamiliar with what it is, check out the first
1:11
episode in this little mini series. We talk about the
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different stages and what's going on. If you want to explore
1:16
it further, we go deeper in the previous two episodes to this
1:20
one, episode two and episode three of the mini series, where
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we talk about two of the ways where you can end up in
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whitewater by accident, because that's what we don't want to do.
1:31
the The whole point of this series is to to identify a
1:35
growing trend for folks who end up in whitewater long before
1:38
they should, and in doing so, we're identifying the three kind
1:43
of categorical errors, the three primary ways that this happens,
1:48
and it doesn't happen so much because you do the wrong thing,
1:52
especially in the case of this reason. It happens because you
1:55
believe the wrong thing, and I'm going to step on some very
1:59
sacred cows today. You might not like me after this episode. You
2:02
might not ever listen again. I hope that's not the case, and I
2:05
hope you hear the heart that I'm coming from, because I have to
2:08
say things that a lot of people don't say, won't say, and a lot
2:12
of things that people say the opposite about. Now, I want to
2:16
address this with the caveat that when I say these things, I
2:20
don't mean that they are always true all of the time. What I
2:24
mean when I'm saying, "Hey, this isn't the way to grow, or
2:26
"That's not what you need to do, or "That's not what leadership
2:29
looks like, I'm doing all of that through the very specific
2:35
lens of right now for your organization. So I'm I'm very
2:40
specifically talking to those of you who are in whitewater
2:43
prematurely and why that is. To identify what prematurely means,
2:50
we have to look at what the only reason is that you should
2:53
actually end up in whitewater, and I believe that is because
2:55
you are over-operated. What does that mean? It means that you've
3:00
got a bunch of operators, the get stuff done kind of people,
3:03
and they're out running all over the place, doing all kinds of
3:06
things, and and you're you're growing, you're big, and it's
3:10
awesome, and then they all start screwing up and making mistakes
3:12
systemically across the board. You've reached a requisite level
3:15
of complexity, even though you've done everything to stay
3:19
as simple and lean as possible, even though you've done
3:22
everything to build a system for your operators to succeed, you
3:26
still hit a level of complexity that forces you to change the
3:30
game that you play. That is whitewater, and that's a that.
3:34
If you hit it that way, it's actually a sign that you did
3:37
something right. It's that you created enough growth to end up
3:40
in whitewater the right way, however, one of the things that
3:44
gets in the way of that is to end up in whitewater because you
3:48
are over synergized. Over synergized. What does that mean?
3:53
Well, the synergist style is what we mean by by synergizing,
3:57
and the synergist style they're like the people people they're
4:00
the leaders who like their whole goal for starting the business
4:03
was to help people. Wonderful, wonderful. Again, I'm gonna I'm
4:09
gonna poke on some of this stuff.
4:11
That's not a bad thing, but what we have to recognize is how we
4:15
help people. And to illustrate this, I wanna I want to use an
4:20
example because, again, synergist leaders tend to kind
4:24
of lead in a family style. That that that's language that they
4:28
use a lot. We we're a family. We have a family culture. I don't
4:31
want to lose our our family feel. You hear that a lot with
4:35
synergistic leaders. But imagine a family, just for a moment,
4:42
where neither mom or dad work, and there's no trust fund,
4:46
right? And they decide they're just going to stay home all day,
4:49
every day, and they're going to stay inside all day, every day,
4:53
and they're going to stay with their kids all day, every day
4:56
because they love them so much. That why. Like they don't want
5:00
to work because that would take away from their time with their
5:03
kids. That sounds really noble, right? Like if you look at our
5:10
culture, how many people out there say like you know stop
5:13
overworking and spend more time with your family and it's your
5:16
family that's going to be around you at your deathbed? Yes,
5:20
Absolutely, unequivocally, like yes, but you're probably all.
5:25
I'm not gonna say that. You imagine the family though, like
5:29
how sustainable is that if neither parent works because
5:32
they're just there, you know, being with their kids. As
5:35
wonderful as being with your kids is, you can't take care of
5:40
them because you have no resource to do it. Part of being
5:44
a great parent is knowing that maybe you have to step away from
5:49
just this hyper focus on your child to actually create the
5:52
resource for your child to thrive. The same thing is true
5:59
in our hyper family oriented businesses. When we
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over-synergize, when we say, "Oh, it's not about the revenue,
6:07
it's not about profit, it's just about people. Again, there's
6:13
beauty in that. I don't want to take away from that. But how how
6:17
many people can you help with zero revenue? And if you're at
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this point, it's probably not that you have zero revenue, but
6:26
let's say you're at a million dollars of revenue, or let's say
6:28
you're at $5 million of revenue. How many people can you help at
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$5 million of revenue? And let's let's say that that is you can
6:37
serve 1000 clients a year at that point. I'm just making up
6:40
stuff, but just for kicks. If you have a vision of serving
6:46
10,000 people, that means there's 9000 that you're not
6:51
helping relative to your vision, and you're not going to get
6:55
those other 9000 by staying at revenue of $5 million. Revenue
7:03
doesn't have to be the the goal. Like it, it's in fun in
7:09
particular, right? Revenue is is similar. Jim Collins talks about
7:14
this with profit, and he says more than profits, and he talks
7:17
about how profit is like oxygen, and that's really helpful. But
7:19
that's more of a predictable success thing, and and and we're
7:22
not going to go into reasons why. But in the fun stage, we
7:25
can take a a derivative of that because it's still actually
7:28
right. But the way that we achieve profit is different in
7:31
fun. In the fun stage, you achieve profit and impact and
7:37
growth and everything else that you want to achieve by growing
7:42
revenue, until you reach the size that your vision demands,
7:45
right? Once you reach the size your vision demands, you can do
7:48
whatever the heck you want. But until you're serving as many
7:52
people as you want to serve, if that's your reason for doing it,
7:55
the best and fastest and most sustainable way to get to where
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you're serving all of those people is by increasing revenue,
8:05
and you can imagine how uncomfortable this is for all
8:08
those nonprofit leaders who listened to the last episode and
8:11
and thought that I was going to tell them how to grow and that
8:14
it was going to be really wonderful and lovely, and now
8:16
I'm sitting here just talking about revenue, and it's true.
8:21
It's true for nonprofits. I I've helped a lot, a lot, 1000s and
8:26
1000s of nonprofits and their founders to grow and and
8:30
succeed. And I have seen 1000s of them fail. I've seen 1000s of
8:34
them get stuck in the early struggle stage and never exit.
8:38
In fact, one of the real tragedies about nonprofits is
8:41
that they will they will get stuck in in early struggle,
8:44
unprofitable and unscalable, and they will stay there
8:48
indefinitely because they think that's the goal is to be a
8:51
nonprofit. And so let's stop talking about them as
8:56
nonprofits. We can talk about them as tax exempt organizations
8:59
if you want a you know very technical way of describing it,
9:03
but let's talk about them as organizations. If an
9:06
organization is going to succeed, it has to have a source
9:10
of life coming into it, and for organizations, that's resources.
9:15
And in today's you know day and age, one of the most prominent
9:18
resources is revenue, because you have to pay people, right?
9:24
You have to inspire people. You have to give them opportunity.
9:27
You have to resource them to do their job. You have to have
9:30
tools for them to do their job, and the way that all of that is
9:33
paid for in every circumstance, at least sustainably, is not
9:38
through like some kind of venture capital campaign. It's
9:42
through revenue. Now that might be from donations, it might be
9:44
from grants in the nonprofit world, and and in the business
9:48
world, it's going to be from sales. But the reality of it is,
9:51
is we have to have a focus on revenue, and people, people,
9:56
right? Very people-centered leaders will have a. Very strong
10:01
temptation, especially once they have even just a little bit of
10:04
revenue, to stop focusing on revenue prematurely and just
10:09
focus on their people. And what we do is we take the little
10:12
revenue that we have and we use it to try and make our people's
10:16
life easier, instead of using the little revenue that we have
10:23
to make our people better, so that they can increase the
10:27
amount of revenue that we have, so that they can increase the
10:29
amount of work that we do, so that they can increase the
10:32
impact that we can create. When you look at where these styles
10:37
conflict, because there is a lot of conflict between them, the
10:41
primary challenge is between visionaries and processors.
10:45
Those those two like cats and dogs, they they just do not get
10:48
along together, and it's pretty easy to see why when we look at
10:52
how those two are are wired. But what we fail to recognize
10:57
sometimes is the second highest level of conflict is between
11:02
operators and synergists, between task people, doers,
11:06
ruthless finishers, and people people. Right, the ones that
11:10
we're looking at and and saying, hey, we just want everyone to
11:14
feel great. We want everyone to succeed. We want everyone to be
11:17
in harmony. Those two styles don't get along very well. Those
11:23
two styles can conflict significantly. And again, if
11:27
you'll remember from the course of these you know lessons that
11:31
we're going through here, these episodes, you need a bunch of
11:34
operators and fun. In fact, I will go so far as to say, and
11:37
and nonprofit leaders hear me on this. I promise it's true for
11:40
you too. A lot of nonprofit leaders, in particular, when I
11:44
talk about the different stages, will say I don't ever remember a
11:47
fun stage, and that's usually for two reasons. One, they never
11:51
got out of early struggle, right, because they didn't have
11:53
enough operators to get stuff done, or two, they never really
11:56
went far enough in fun because they never had enough operators
12:00
to get stuff done, what that means is that the degree to
12:03
which the fun stage is fun is directly proportionate to the
12:07
quantity and quality of the operators you have on your team,
12:13
and great operators don't want to work for ambiguous, overly
12:19
nice, hyper empathetic, but you know, Gumby types. They want to
12:27
fall. They want to have a vision. They want to know what
12:30
they need to do to get to that vision, and they want to know
12:33
whether or not they're winning. They want goals. They want
12:36
objectives. They want they want to be pointed in a direction and
12:39
then left alone to work, they don't want to sit around singing
12:42
kumbaya. They don't want to sing songs and whatever. Like they
12:47
want to go and get stuff done, and they want a leader who
12:50
celebrates that. They want a leader who inspires that. They
12:54
want a leader who makes getting all those things done worth it.
12:59
And when you're a synergistic leader who's like, ah, don't
13:01
worry about the future, or we're just here to take care of
13:04
people, or don't worry about revenue, or we don't set goals
13:08
like that because those are just numbers, and and and we're not
13:11
in it for the numbers. If you have a vision that's greater
13:16
than your current numbers will allow, let me tell you what the
13:19
numbers matter. It's just like the family with no income,
13:24
right? If that family has a vision to being a
13:27
multi-generational family, they're going to have to find a
13:30
way of generating some revenue. Otherwise, they're not going to
13:32
be around for multiple generations. They, you have to
13:36
have income. You have to, in an organization setting, have to
13:39
have clarity. You have to have a vision. You have to direct
13:43
people toward that vision. You need to give them space and and
13:48
a structure to achieve that vision. And you have to let them
13:52
know if it's not working. And so, what can happen is we can we
13:57
can be so people focused, so leadership centric. I see this
14:01
in like very hyper leadership organizations. Is oh, everyone's
14:06
a leader. Everyone needs to be a leader. Well, the folks who
14:10
don't want to be a leader in the way that you probably define
14:13
leader is operators. Operators don't want to be leading a bunch
14:17
of people. They want to be left alone to get their job done.
14:20
They don't want to be in like some hyper strategy meeting
14:23
talking about what the world's going to look like in 100 years.
14:27
They want to know what they need to do, and they want to be left
14:29
alone to get it done. They don't want to have to wait for nine
14:32
other people to voice their opinion before a decision's
14:35
made. They want to know what the decision is, and then they want
14:38
to be left alone to execute it. And what will happen if you over
14:42
synergize is that you will drive out. First off, you won't really
14:47
attract operators, and second, even if you do, you will drive
14:51
them out because you won't honor the their gift. You won't honor
14:55
their ability to get stuff done. You'll, in fact, try to drive
14:59
it. Out of them, you'll probably try to turn them into something
15:03
else. And visionary synergists do this more than anybody else,
15:07
or synergist visionaries. When you have the combination of
15:10
those two styles, they will accidentally, but in a very real
15:15
way, weaponize it. Where they try and turn everybody into a
15:19
visionary synergist. They want everyone to be an idea person
15:23
who leads a group of people because that's what leadership
15:26
is. That's not what leadership is, especially in fun.
15:30
Leadership is any act that that helps two or more people achieve
15:34
their common goals. That's what leadership is, which means a
15:38
huge chunk of leadership, especially in the fun stage, is
15:42
getting stuff done because if you don't get anything done, you
15:46
don't achieve any of your goals, and you end up in the exact same
15:50
place you were a year ago, just a little worse and maybe a
15:52
little fatter. Like that's that's all that happens. Nothing
15:56
good comes out of not getting anything done, and very little
16:01
good comes out of trying to take operators and turn them into
16:04
something else, rather than appreciating what they really
16:07
are. And so, for all you hyper synergist nonprofit leaders who
16:14
are struggling to have fun in the fun stage, or even
16:16
struggling to get out of early struggle, or you feel like we're
16:19
in whitewater, it's all complex, and it's it's such a mess, and
16:22
nobody's getting anything done. But you're sitting there with
16:26
like five people on your team. That's because you don't have
16:29
people who get stuff done. It's not because you're in
16:32
whitewater. It's because you don't have operators. And and
16:41
and I I I know that this is hard, and I know I'm stepping on
16:45
some toes, and I'm not actually trying to say that like your
16:48
views on leadership and life are wrong.
16:51
What I'm trying to do is gift you the ability to recognize
16:55
that the way that you achieve those ends, the way that you
17:00
achieve your vision, the way that you achieve the leadership
17:04
culture that you want, the way that you do that-if you're in
17:08
the fun stage, or if you should be in the fun stage-is by hiring
17:15
operators, giving them clarity, giving them authority, and then
17:20
holding them accountable. It's going to take metrics. It's
17:24
going to take clarity. It's going to take a little bit of
17:27
structure. It's going to mean that you're you're not as much a
17:31
family as you are an organization, and that's
17:33
actually not such a bad thing. And when you operate in that
17:38
way, when you get the right people who can operate in that
17:41
way, then your ability to achieve the vision that you have
17:46
will become dramatically greater, dramatically greater.
17:52
In fact, I think chances are very good that you'll never
17:56
actually fulfill the vision that you have if you keep trying to
17:59
do it this way, I really mean that, and it doesn't mean that
18:04
that vision is wrong. It just means that you probably have to
18:07
be more pragmatic about your approach to that vision. You
18:12
have to be less dogmatic about the hyper leadership, hyper
18:15
synergist culture that you hear from very big, very successful
18:20
people. And it's not that they're wrong. It's just that
18:22
they are wrong for right now. There is a right time for a lot
18:26
of that, not all of it, but a lot of it. But it's not here and
18:29
right now. Most of that stuff finds most of its merit in the
18:33
predictable success stage. So if you love that stuff and you want
18:36
more of it, then do the things that you need to do to get to
18:40
the predictable success stage. I once heard it described this
18:44
way. It's kind of like going up to someone in the gym and asking
18:47
you know, and and you know who has great abs, and taking
18:50
whatever workout they do. You know, you see them doing bicep
18:53
curls, and it's like, well, bicep curls must create great
18:55
abs. And so instead of doing what what got them here, you're
19:00
doing what they do now that they are here. That doesn't work. I
19:05
heard it recently. You want to model the rise, not the result.
19:09
That's a great way of putting it. You you need to do the thing
19:12
that will get you to predictable success, not just pretend you're
19:16
in predictable success. You can't be like my son Liam and
19:20
just put on the clothes of an adult when really you're still a
19:24
kid when your organization is still a kid, and that means that
19:28
we have to just embrace the fact that having an organization
19:31
that's still a kid is not a bad thing. The best thing for a kid
19:34
to do is to be a kid on route to becoming an adult. The best
19:39
thing for your organization to do is to pour into the operators
19:43
on your team to to to find that operator way and cultivate it so
19:49
that you can get big enough and then add the systems and
19:51
processes that you need to create predictable success and
19:56
then and only then can you really fully invite all. Four
20:00
styles: the visionaries, the operators, the processors, and
20:03
the synergists-all four styles to come together and contribute
20:07
because that's what happens in predictable success. So, for all
20:11
of my over-synergized folks, please know I love you. You're
20:14
awesome. You're amazing. You're also probably making your life a
20:18
lot harder. And if instead of again trying to hyper leadership
20:23
everything, if instead of that you just recognize we need to
20:26
manage this group of operators well right now, we need to give
20:29
them what they need to succeed. You'll find yourself having a
20:33
lot more fun and enjoying the fun a lot more too. A couple of
20:39
signs that that you can do this. If you have you know 10 people
20:44
on your team and five of them need to weigh in before you make
20:47
a decision, you're probably over synergized. If you're hitting
20:50
whitewater where it's super complicated and everyone's
20:53
overworked and it's exhausting and it's really hard, and you
20:57
have less than 45 employees, there's a good chance it's
21:00
because you're over synergized.
21:03
If you find yourself regularly trying to use whatever resources
21:06
you have to make your team's job easier instead of helping them
21:10
get better, you're probably over synergized. And so this is the
21:17
final of the three kind of categorical errors for what gets
21:21
us into whitewater, and and for those who are over synergized, I
21:25
I hope you recognize. But to just be clear, the path back is
21:29
to say whatever this extra synergy, leadership, HR, you
21:35
know, nice guy thing is that is causing things to be too
21:39
complicated for us to succeed. We need to unwind some of that
21:43
for now and build up to a place where those actually make sense.
21:47
And you'll find that some of them do make sense later. You'll
21:50
actually find that some of them never make sense, and and that's
21:52
another lesson for another time. But you need to you need to
21:56
simplify. You need to double down on your appreciation for
22:00
and your your optimization for the operator style, and they
22:06
might rub you the wrong way. Not all operators are great people,
22:09
but not oper all operators are bad people either. And so, if
22:13
you can find some really quality operators to come in and help
22:16
get things moving in the right direction, you're all going to
22:19
be better off for it. Once they come, take good care of them as
22:23
well, in the way that they want to be cared for, which is not
22:27
the same as you as a synergist. And when you do that, you'll be
22:31
in great shape. You can create a lot of growth very simply and
22:34
have a lot of fun doing it. It really, really is pretty cool.
22:40
So that's it. the The top three ways that we end up in
22:43
whitewater when we shouldn't is by being overvisioned,
22:47
overprocessed, or over synergized. And the way that we
22:50
solve all three of those is by actually going back a little
22:54
bit, simplifying so that we can bring that operator style up,
23:00
give our operators what they need, and then let them make it
23:03
happen. But what if you're in a position where you don't really
23:08
have that luxury? What if you have to get to predictable
23:12
success, or what if you're struggling with one of those
23:15
things, but you're already up in the 4050 or or 450 range? What
23:20
do you do? Well, that's what we'll talk about in the the
23:23
final episode in this series, where we talk about how you can
23:26
achieve predictable success, even when you have an imbalanced
23:31
team. I hope to see you there, and it's going to be a good one.
23:34
It'll be a lot of fun. Take it easy. Hey everyone, Scott
23:41
Ritzheimer here. Thank you so much for listening to the Start
23:44
Scale and Succeed podcast. I hope this episode gave you
23:46
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