Latest / The Enterprisors / The Journeyman Problem: Why Your Early Team Could Be Holding You Back
Transcript
- Tim Meadows-Smith: Welcome back to the enterprises. In almost every founder led business that has stalled between 5 million and 50 million, part of the answer lies in the leadership team. The people who are brilliant at 3 million are not always the right people at 30 million. The founder knows it somewhere. Acting on it feels disloyal. So it doesn't happen or it happens too late. Tim, so we have actually touched on on The Journeyman as a concept ⁓ in a couple of episodes previously. We have. The title of this episode is going to make some founders uncomfortable. Who is a Journeyman player in a team and in the business? I think everybody understands this when they think about sports. Yeah. So it doesn't matter whether you're football or cricket or rugby or American football or whatever it is that you follow. If you end up with a player from a couple of leagues below, they're not gonna fit in the team. They just won't be able to keep up. And it may well be that that same player exposed to the same training and circumstances of one of the top players would have been there too. So it's not necessarily raw talent or ability, it's a combination of physical ability, attitude, training, understanding, but you know, there are, I think somebody told me there are half a billion people in the world who play football. Half of them think they should be playing for one of the premiership teams. Yeah, I'm sure, I'm sure. But the reality is that they probably wouldn't even get into the fifth tier of the football league because they, you know, they, don't have never had the training. They don't understand how it all works. And they are, if you get somebody who is in, I don't know, league one or two of football, they earn about the same as a manager in a medium-sized company. So they are, that's their job and they make a reasonable living from doing what they do in football. But the difference between them and the people who are being paid a quarter million pounds a week for playing football is enormous. And you've got Journeyman and you've got Superstar. Now, in a business sense, when you start out in business, you're not hiring people who would be in League Two, you're hiring people who would be four leagues down. who do it part-time on an amateur basis, because it's a bit of fun and they don't know else And also that's all you can afford at the beginning. Exactly, it's what you can afford. It's essentially a person with a bit of common sense. Yeah. And you take those and they help you to get through your very early founding stages and you start to build your business. Unless you train those people and develop them, they won't... they'll hold you back. They won't enable you to progress to the next league. But you also talk about the weight of the loyalty of having those people who've been in it with you from the start. You do. How do you handle that? With some difficulty. If you find yourself having hit one of, if you go from five million to 30 million, you probably will hit four or five ceilings along the way where you get held up for a year or two of very low growth until you solve some problem that was blocking you. The difficulty is you only solve one problem at a time, not all of the problems. And one of the problems is that when you get to 30 million and you've got, I don't know, 60, 70 people around you and you haven't invested in any training whatsoever over the 20 odd years you've been in business, know, guess what? They won't be very good. Yeah. So we're back to that. Yeah. Invest in your people, develop your people, trust your people. Otherwise it is your fault as a founder. It's always your fault. know, hindsight's a great thing. And the difficulty is none of us know what we don't know. And if we're getting advice from people who are smaller than us and from where we came from, we're never learning about what we need at the next stage and what we can do to be loyal to those people, which is to help them have a job that they're good at and to develop their skills to reach their potential. But actually all we want to do, all we have done is take from them. We've paid them, but we've taken from them. everything that they know how to do and we haven't helped them to learn new things. Interesting. Yeah. And there's a line in your book as well, because there are, there was also that fear. Well, there is a fear, isn't there, that your best trained people might leave you. But actually the fear should be that your worst trained people stay. Indeed. And that ties into. And again, this is going to sound really brutal. Usually the worst trained of the lot is the founder. Is you. Leader. It's you. Yeah. You are the one who has spent your entire working life since you founded the business, investing your time, building and improving the business. And you have totally ignored your personal development. And in some instances it suits. you, the CEO, to have journeymen and not anybody that's going to threaten you because there is an ego involved as well, isn't there? There is, and they're easy to manage. mean, what you need... Journeymen? Yeah, they're very easy to manage, but they don't take you very far. And what you actually want is to hire a few people who are really difficult to manage because they're a handful because they want to... They want to challenge, they want to develop, they're trying to tell you what it is you need to do to get better as an organization. And if you have one of those in each of the key areas leading, so you as the new emerging leader of your business spend your time developing your leadership skills, but developing a series of leaders underneath you, now you've got the capacity to grow. Fabulous. And so what are the signs then that a founder is sitting on conversations and not having that they've, what does a team look like when they've reached the ceiling? They don't reach the ceiling. A ceiling. They reach a ceiling. So ceilings occur usually. There's one, the first one is how do you get beyond a hundred thousand pounds a year on your own? self-employed effectively. Yeah, you've created yourself a job. So you've created you a job. Then once you've got beyond that, there's another ceiling at about half a million. There's another one at about a million. There's another one at about three million. There's another big one at about 10 million. There's another one at about 15 million. There's another one at about 20 million. I'm not just trotting off round numbers. They're real. you can see them, you can go and spot the signs of why this business is no longer growing and is finding it difficult. there different signs at each stage then or is it similar? You plateau, you stagnate? The common cause is a lack of vision, a lack of understanding of what good looks like and a lack of preparation for where you're going and, you know, to coin the football. analogy, it's really good standing in front of the trophy cabinet, admiring the cups and studying last year's league table. But it's not going to win the match this week. And what you've got to do is not, you know, win the match this week and next week and the week after in order to move on to the next league. But the difficulty is, and these ceilings in business, are like trying to get out of the league that you're in. It's exactly the same sort of problem. And in order to break out of that league, you've got to usually import some players from the league above to help you to win the league, move on, and then you can start to get more players and grow through that league. and the same thing happens in business. The difficulty is that usually the manager at League One is not gonna be the same manager when they get to the championship and not the same manager when they get to the premiership. And even when they get in the premiership, they usually have to change managers, because everybody wants them to be further up that league than they are. And it's the whole team is really well suited for where you've come from, not where you're going to. So is it a combination then of ⁓ importing new players, buying new players in and properly training your players and then sitting down with the players that are unable to perform at the level of the next league level and saying, what do you do? Say goodbye. So you don't, you know, you do need to remain loyal, but loyalty isn't keeping somebody who is stressed and underperforming and telling them they need to do better. No, well, that's what we've, but that's we're used to. Loyalty is about identifying what that person's really good at, what they would like to be doing and helping them with the training that they might need to get from where they are. where they want to be. It's about taking away from them responsibility for things that they're not good at. Loyalty as a leader is not to one person, it's to everybody. And you would not believe how frustrating it is for everybody else if you allow an ineffective person to remain ineffective out of loyalty. Because you're being, maybe being partly loyal to that person. you're being totally disloyal to everybody else. And even the person you're trying to be loyal to actually would be better off and happier if you freed them up to do something different. And you don't have to kick people out. You find something that they're good at and can be appreciated for. And you hire in small numbers of new people who've come from a higher place to help everybody else understand what good looks like and to be ready for the next stage. Interesting. So it's not as bad as you think. It's not just, it's not, everybody and start again because they're all useless. But but it is, it does mean that it, I mean, you've been getting away with growth on the cheap because you've sucked all of the skill out of the people you've got until they've got no more to give. you now reach a ceiling because you didn't invest in them and their development or you and your development. Because the reason that you've not spotted all of this is you've not grown as a leader. I was just about to say, why do founders find it so difficult to see clearly what that is, how that situation can be improved and what it is and what needs to do with Because we know what we know, we know a little bit about what we don't know, and we don't know what we don't know. Yeah, And there's an awful lot of we don't know what we don't know. And there's an awful lot of assumption that a bigger business is just a small business with more sales. More people. It's not, you know, at each of those ceiling points, there is something about the dynamic that needed a different environment to thrive. And it's people, it's systems, it's thinking, it's a whole raft of things. that get in the way of breaking through that ceiling to go from one league to the next. Right. And have you got any examples of companies that have managed that well and companies that haven't quite managed it or is that a difficult question? Lots. mean, all the companies that I work in have some element of that and it's identifying quickly what the key issues are. and then doing something about those that frees up that blockage. It's a different sort of problem solving to, know, the lorry's broken down or the production doesn't match or somebody's not coming in. Entrepreneurs are really good at problem solving, you actually have to But this is a different problem though, isn't it? This is not something... is... It's kind of intangible, isn't it? Not really. the first thing you need to know to solve a problem is that a problem exists. I was about say that there is a problem. So if you think what you've got is good, you're not looking for a problem. so that's the bit that I meant is intangible because sometimes you don't see it. Yeah, exactly that. But the thing that is really missing in most businesses is business intelligence. from the data that they've got. This is not people intelligence. This is the organization delivering intelligence, giving a clear message that there's a problem to be solved and evidence as to what you need to do to solve it. And if you organize yourself well, so that you get great business intelligence, then you can remove blockages and start to progress. But if the intelligence is hidden, You can't solve the problem. Well, okay. So that, yeah, so in order to do that, you need to, again, we're back to as an entrepreneur, it's very, very easy. It's easy to get involved in the business, but that's the best saying is like, know, don't work in the business, work on the business. And therefore you need to pull yourself out to see, have a better view of what's going on, not just with the people, but with the data and what the data is actually showing you. Yep. That's a skill. There's lots of them. This is not simple. No. It's very complex. The bigger a business get, the more complex it becomes and the more help you need from systems and processes to enable you to do that effectively. the journeyman finance director has not progressed from being a good management accountant. they are doing a thoroughly good job on what they're good at and they don't know what they don't know about what's going on in the operation. They don't know what they don't know about data science. They don't know what they don't know about economic analysis. When you have all of that come together, new intelligence comes out that when presented to the board says, we need to do something different. when all you get is last year's sales were, you know, 5 % smaller than this year's sales and our profit is, you know, up 5 % from last year and our cash is all right. And here's a lot of chance to prove it by customer. You learn nothing. There's lots of information and none of it useful to you to drive the business forward. If you understand that you are employing 20 people to produce the same as somebody else is only using seven people to produce the same output. You can then say, what do we do to drive up the productivity of those 20 people? You don't have to fire them. you've got, free up resource to deliver more. But if, and the blockage may be the equipment. there's all kinds of things they could be. It might be that your supply chain is out of alignment and people are hanging around waiting for materials before they can work. There's all sorts of things in the operation that hold you back. It's quite exciting as well. It's exciting. It's quite exciting. So in terms of actually moving from ⁓ journeyman to somebody who becomes your star, is again, we go back to the training and it's not just training of the journeyman, it's training of yourself. So you are actually able to see that and anticipate what might happen and learn how to analyze the data and the actual activity in the company. look, mean, the characteristics, the personal characteristics you need to begin to optimize progress are firstly, humility. I can be wrong. Yeah. Curiosity, I wonder what we could do better. a thirst for learning, how do we get the knowledge in place to actually put an improvement into place and keep improving? Humility, curiosity, knowledge. a thirst for knowledge. Thank you, Tim. Good.