Latest / The Twenty One Clear Podcast / Four Stages of Leadership - Part 1: Stages 1-3

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Four Stages of Leadership - Part 1: Stages 1-3 · The Twenty One Clear Podcast

0:06
Adam Hatcher: Hey there.
0:06
Welcome to the 21 Clear Podcast.
0:08
I'm your host, Adam Hatcher, the founder of 21 Clear, a family business consulting
0:13
firm, and in this podcast and all of them, we wanna give you time to think about your
0:18
inner family business, the unique way your family works in and owns the company that
0:24
you all have together, and help you take one more step on your chaos-proof journey.
0:30
Today, I am excited to share the first of two parts of what was
0:35
an incredibly fun and insightful conversation with Norm Smallwood.
0:41
Norm is the co-founder of RBL, Results Based Leadership Group.
0:47
RBL is a thought leader and a consulting firm specializing in strategic and
0:52
human resources consulting, helping you understand your talent and
0:57
company strategy so that you can get the most from both, have a great
1:03
career, and build a great company.
1:05
I know Norm because RBL was referred to me by a large privately held
1:13
Georgia-based family company when I was looking to restructure our
1:18
business to take it to the next level.
1:20
Norm has been an instrumental part of my career, of our family company's
1:24
journey, and has worked with family companies that are privately and
1:28
public- privately and publicly held, and those public ones are still controlled
1:33
by families, but publicly owned.
1:35
So he has spanned from mid-size to large to publicly owned
1:39
family or family-based companies.
1:41
But he's also worked with publicly and privately held companies
1:44
that weren't family controlled.
1:46
So what I enjoy in this interview is Norm's experience both understands the
1:51
unique dynamics of a family company, but can see it in that broader conditional
1:56
business world that we know doesn't care if you're family owned or not.
2:00
It's just what can you do in the marketplace for your customers.
2:04
In this episode, Norm shares something I wish I had either known on day
2:09
one of my career in the family company or the first day I became the
2:14
vice president of human resources.
2:16
It's the four stages of leadership.
2:20
If you have ever had that concern Am I seen as a high performer?
2:27
Can I be seen as a high performer?
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Or the family members that I'm responsible for leading or
2:33
supervising, are they high performers?
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Or is this organization I have with people that I've known for a long time that
2:42
care about me and my family, are they up for what is next for this company?
2:47
That's a concern all of us carry, and it's a critical part.
2:51
Understanding that is a critical part of building a great company
2:57
while you keep your family together.
2:59
Norm has a simple but deep way of thinking about it that I found helpful, and many
3:07
other family companies have as well.
3:09
It's the four stages of leadership.
3:12
This was a long conversation between the two of us.
3:15
So this is part one.
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Norm and I in this, he's gonna introduce the four stages of leadership and
3:24
then spend time on the first three.
3:27
That's episode one, and we will take a break.
3:30
Then in episode two, we will pick up with the fourth stage of leadership and
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then take some time and talk about the consequences of understanding and applying
3:42
th- this idea, these four stages, the consequences for you personally and for
3:48
your organization, both its health, job satisfaction for your employees, and
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ultimately the value of the business.
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So stage one, two, and three are in the first episode, stage four and
4:01
some time thinking about application inside your business in episode two.
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Enjoy this first part.
4:09
I have really both enjoyed the conversation and listening
4:13
back to it with Norm.
4:14
I hope you enjoy it as much as I do.
4:17
And with that, here's Norm Smallwood.
4:20
Well, Norm Smallwood, welcome to the 21 Clear podcast.
4:24
What a privilege.
4:26
Norm Smallwood: Great to be here, Adam.
4:28
Looking forward to the conversation
4:30
Adam Hatcher: Norm, when I introed this episode, I told people
4:33
you and I have a tr- history.
4:35
Uh, I, you and I got introduced by a large Georgia, privately held Georgia
4:39
family company when I got to the point in scaling our family's business that
4:44
we'd done a few acquisitions, and it just felt too hard to run, and it felt like we
4:49
needed a new understanding of leadership, and that's how we got introduced.
4:53
So as we're going through this, I want the listeners to know it's not just
4:57
that I've read your books and looked at the material you've produced.
5:00
You and I have actually worked together, and I have seen your ability to look
5:03
into an organization and its leadership.
5:05
Uh, so thank you for that, and again, excited to be here today.
5:09
Norm Smallwood: Yeah, me too.
5:10
And you've got a gift for doing the, the same thing that you just
5:13
credited me for, so it's, it's fun to be here and talk about it
5:19
Adam Hatcher: Well, I hope everybody enjoys this mutual admiration society.
5:22
Norm Smallwood: Yeah.
5:23
And
5:23
you're, and you're younger, handsomer, and thinner than me too
5:28
Adam Hatcher: That'sâ¦
5:29
Thankfully, no one can see that, I guess unless you're watching on YouTube.
5:33
Norm Smallwood: Okay.
5:33
Yeah, well, I'll just tell them it's true
5:36
Adam Hatcher: Norm, there is a concept when we were working together you
5:39
introduced me and our company to, and it's something that you've written about
5:43
and studied I think every family leader, or even if you've just started in your
5:49
family company, you should understand.
5:51
You have this framework of four stages of leadership, but if people think
5:56
this is just an intellectual exercise, I actually, having lived the family
6:01
business, believe four stages that you explain that we're gonna talk through
6:06
answers two fundamental fears that every family leader has to face at some point.
6:12
The first fear is, what do I actually need to do to be seen by non-family
6:18
members as a strong performer?
6:20
Or maybe even, was I ever a strong performer?
6:23
Am I one?
6:24
Um, that's a fear we have that I think your four stages gives
6:27
a practical framework for.
6:29
But then also, a lot of times families go decades a good way to assess family
6:34
members, and it ends up costing the business, and they can't see it till
6:39
later, and I think your stages actually help people see it before it happens.
6:44
with that, the four stages of leadership, so this is something
6:49
you've written and you've talked about, the question that I've seen you
6:53
frame it with is, what do I need to do to be seen as a strong performer?
6:59
So can you talk about how the four stages, then we'll go through each
7:01
one, but just in general, like how does it touch that question?
7:04
Norm Smallwood: Yeah Well, the, my first, uh, partners, uh, were in a
7:12
consulting firm I had before, uh, we started the RBL Group called, named,
7:17
uh, Gene Dalton and Paul Thompson.
7:20
And Gene and Paul were professors at the Harvard Business School, and they were
7:25
looking at engineering obsolescence.
7:29
And the idea of engineering obsolescence was that, um, if you hired an engineer,
7:39
a few years later, you wouldâ¦
7:42
The question was, should you fire that engineer and hire a new one
7:46
because the skills that, that that engineer brought with him or her had
7:53
now become obsolete, and you needed somebody with, uh, more recent skills.
8:01
And so when, when they looked at that, uh, originally at RCA was the
8:08
original company that, that, that, uh, they studied, they found that there
8:16
were-- that, that if you looked at the subject through the lens of age, that
8:25
at about age thirty-nine, on aggregate, engineering performance declined.
8:34
But that if you looked at it at an individual base, like if you were
8:38
to do a scatter plot of engineers, you would find that some engineers
8:45
became more highly valued over time as they got older than others.
8:51
So their question became: What differentiates the high performers, those
8:58
who become more highly valued as they get older, than the aggregate who became
9:05
less valued as they, as their performance was seen to objectively decline?
9:13
And so, um, with that question, they, they looked at a number of variables.
9:19
They looked at the number of hours worked.
9:23
And actually, there is a slight correlation, but not much, right?
9:26
It's not really a statistically valid comparison.
9:30
It looked at, it looked at l-level of education, bachelor's
9:34
degree, master's degree, PhD.
9:37
No, no correlation to performance.
9:41
Number of patents, no correlation to performance.
9:44
So what did become clear is that expectations change, and that so
9:51
the longer you've been in your job, there are-- like if you're doing
9:56
the same work at age thirty-five that you did at age twenty-five,
10:04
people begin to ask, "What's wrong?"
10:07
So what became clear to them is that there were what they called stages of
10:14
performance, and that some peoples, um, were, were able to change the
10:21
nature of their contribution and stop doing what made them successful,
10:28
uh, at one stage and begin to take on a new set of knowledge, skills,
10:36
expectations or perspectives that met the demands of, of expectation over time.
10:43
That-- And that's what became known as the, as the four stages of performance
10:50
Adam Hatcher: So it's the people who began to perform different functions
10:54
as time went on versus doing theâ¦
10:58
I've heard the phrase used in non-family and family companies, "She did the same.
11:04
She didn't work here for 30 years, she said, did the same one
11:06
Norm Smallwood: Exactly.
11:08
Adam Hatcher: This is people who did different, different things.
11:11
So then what is, what stageâ¦
11:14
Let's walk through them.
11:15
What
11:15
Norm Smallwood: Sure
11:16
Adam Hatcher: A- and I think it's fascinating as we go through
11:18
this, you can't necessarily just work really hard and move
11:22
Norm Smallwood: Right
11:23
Adam Hatcher: you could work really hard and do year one 30 times.
11:27
Norm Smallwood: Yes.
11:28
No, that's exactly, yeah, that's exactly the, the dilemma.
11:31
So what happens, you enter the workforce, let's say in your early twenties.
11:40
You've got a degree, a, an undergraduate or a graduate degree of some, some kind.
11:46
This, this I said it started with engineers, but it's been over time it's
11:51
been expanded to every type of knowledge worker in, in virtually every industry.
11:57
But so when you, when you enter the, the workforce, you tend to be
12:03
psychologically dependent on others.
12:06
You need direction.
12:09
You need to learn how things work around here, the culture of the organization,
12:14
and you need to pay attention to details.
12:18
And, uh, if you can do that, people think you're a, a, a high
12:25
performer with plenty of potential.
12:28
The problem is that over a couple of years, uh, for most jobs, uh, even the
12:36
most technical jobs, you have to move from that dependent contributor where you're
12:45
reliant on others for direction to become an expert or an individual contributor.
12:51
And so what made you successful in this first stage as a dependent
12:56
contributor was that you were looking for others to tell you what to do.
13:00
You were looking for assurance that you were on the right track, um, and so on.
13:07
Now I'll-- let me throw out a, a piece of information that became really interesting
13:13
is that the average age in, in like a Fortune 1000 company for somebody doing
13:24
that kind of work is thirty-eight.
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So it's not-- The expectation would be that would be a good performer
13:32
at twenty-two, but when people are describing you that way at thirty-five
13:39
or forty, that's not good anymore, right?
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Because you, you haven't made the shift from dependence to independence.
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So that's the first one, right?
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From one to two.
13:53
Go, go ahead.
13:54
Go ahead.
13:54
Adam Hatcher: and, uh, if I've seen you use the word, uh, stage one is like
13:59
apprenticeship, and it reminds me it doesn't have to be a privately held,
14:02
publicly held, family held company.
14:04
I remember I went to law school and then was a, a prosecutor, assistant district
14:09
attorney, and I re- I didn't have these words back then, but I remember the
14:13
DA saying to me, he said, "Year one, you're gonna mess up every single day.
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I-- That's why you have a team lead.
14:21
will make a mistake every single day, and it's going to take you
14:24
three years to actually begin to contribute back independently to this.
14:29
For your first two years, my expectation is you are learning the ropes, you are
14:34
building trust, you're gonna be closely supervised, it really is not gonna beâ¦"
14:40
So I guess he was saying you are stage one, and then I think where
14:42
you were going as stage two was when he told me, "The next step is me
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beginning to trust you independently in
14:50
Norm Smallwood: Right
14:50
Adam Hatcher: of a prosecutor."
14:51
So is that stage two is beginning to contribute independently?
14:56
Norm Smallwood: Yeah, absolutely.
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So the shift psychologically is from being dependent on the team leader, uh,
15:05
DA to I'm an individual contributor.
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I'm a lawyer who knows how things work around here.
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I'm considered an expert.
15:15
Um, you can rely on me to, uh, to, to do the job right.
15:22
One of the characteristics of individual contributors is that
15:29
competence becomes their way of comparing themselves with other people.
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So they're always, you know, "How do I compare to you?"
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I mean, what-- When we're-- If we're both prosecutors, uh, I start to spend a lot
15:46
of my time comparing my successes to your successes or my, uh, school that I went
15:54
to, to the school that you went to, right?
15:56
So it's very competitive, uh, as an individual contributor.
16:00
And so, so let me make the, the, the beginning of the shift.
16:05
You can stay as an individual contributor for your entire career and be considered,
16:12
uh, a valuable resource to the, uh, to the business, the organization.
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But, um, it's harder to stay there because Your technical discipline usually, like
16:29
that was the engineering obsolescence question that wasn't quite right, but
16:32
because-- b-but, but your, your discipline changes, so your success is dependent
16:39
on your ability to keep up with the changes in your area as a lawyer, as
16:44
a banker, as a human resources person.
16:48
Whatever your technical discipline is, you've gotta keep up with, with that.
16:54
The average age, I, I did the average age in the, in the dependent contributor.
16:59
As an independent contributor, the average age is exactly the same.
17:03
It's about thirty-eight.
17:05
So there's-- So what we're gonna find here as we go through these, this
17:09
isn't an age-related thing, right?
17:12
So, uh, which is really funny because a lot of organizations have, uh, time and
17:19
seniority systems set up for compensation, so they're not contribution models.
17:25
They tend to be time and position.
17:28
Like, we want somebody who's been here for ten years or fifteen
17:32
years or whatever, and it turns out that that's not a good basis toâ¦
17:39
Time and job is not a good basis because as you started out with, I could be
17:43
doing the same job over and over again and not really learning and changing.
17:49
So the next shift is from independence.
17:54
You don't have to make this shift, but some people do, is the shift
17:59
to stage three from stage two, from independence to influence.
18:03
Adam Hatcher: influence.
18:04
Norm Smallwood: the--
18:04
Adam Hatcher: we make
18:05
Norm Smallwood: Yeah.
18:06
Yep
18:07
Adam Hatcher: so in stage two, contributing independently, and I
18:12
think when you start in your family company, sometimes you're just
18:15
thrown, thrown, thrown to the wolves.
18:18
But many times someone's given a mentor, a supervisor.
18:21
It might be a relative or not, and there is this, particularly
18:25
if you're the younger generation, there tends to be this desire of I
18:28
want to be trusted independently.
18:31
And that'sâ¦
18:32
But that stage two, I've seen you write that there are four requirements,
18:36
just to highlight them for people.
18:38
So you do have a technical expertise.
18:40
This isn't chief waiting for mom to retire officer or vice
18:44
president of lots of opinions.
18:46
There's a specific thing.
18:48
It's being an engineer.
18:49
It's being a sales professional.
18:50
It's being a project manager.
18:52
There's the ability to operate autonomously.
18:54
I mean, it doesn't mean you don't have a boss, but it's like back when
18:58
I was a prosecutor, I went to court and nobody was over my shoulder.
19:01
That's what you wanted.
19:02
You demonstrate initiative.
19:04
You don't just wait to be told, which in family companies can be hard.
19:08
Your family system can teach you growing up, will always tell me
19:12
when to take the trash out, but now that I work with Mom, wait for that.
19:16
Like, I need to show initiative.
19:18
But then the last one, you have the requirement when you're
19:21
there in stage two, a willingness to accept accountability.
19:25
And I find it, like, if you're managing family employees, I guess,
19:30
Norm, maybe the reason that the age, the average age is the same, forâ¦
19:36
If you are managing a, a stage two, so someone with technical expertise,
19:41
who's autonomous, who demonstrates initiative, but as their manager,
19:44
you're their leader, you never shift the accountability up for them.
19:47
You never change what's expected of them.
19:51
That could be one way they end up just staying in stage
19:53
two for a really long time
19:56
Norm Smallwood: Yeah, no, I, I think you've nailed it.
19:59
It's the, umâ¦
20:01
And I, I think some people enjoy that, uh, it- it's kind of a stage at which
20:09
you can be kind of a know-it-all in your area of, of expertise, right?
20:15
Nobody knows more than me about engineering, about
20:20
sales, about, uh, whatever.
20:23
And so again, um, you know, your accountability in stage two, you
20:30
define your accountability as being accountable for being the best expert
20:36
in, in this narrow area, uh, that, uh, that, that there could be, so.
20:42
Um, and what we'll see is issues like accountability
20:45
and initiative change, right?
20:47
'Cause you could be doing the same job, but depending on what stage
20:50
you're in, you would be doing those different assignments differently
20:55
Adam Hatcher: Well, and this is gonna come back in stage three,
20:57
but I'll just a pin in it here.
21:00
Norm Smallwood: Yeah
21:01
Adam Hatcher: uh, a- and it's, can be, any of us can be successful
21:04
in a family company in stage two.
21:07
The challenge I heard you give was have to be an expert in something,
21:11
and it's not an expert relative to your other family members.
21:14
It's not an expertise relative to the other people in your business.
21:19
It's actually an expertise against your peers outside the business.
21:25
A, if when I was the general counsel of the company, or, uh, let's say the head of
21:29
corporate strategy, it wasn't was it I had the best strategic planner in our company.
21:34
Compare me against our competitors.
21:37
Norm Smallwood: Right
21:37
Adam Hatcher: did I hold up to them or even to some of the thought leaders in
21:41
Norm Smallwood: Yeah.
21:41
Adam Hatcher: planning?
21:42
Norm Smallwood: No, that's right.
21:43
And if you think about professional associations, like, um, I, I remember
21:48
years ago when, when, uh, Gene Dalton and Paul Thompson were together
21:55
at Novations, we did a project with the IEEE, and the IEEE is an
22:01
association of electrical engineers.
22:04
And we looked at their career model, and their career model was, you know, they
22:10
had stage one right, which was, um, you know, to be learning, be an apprentice.
22:17
And then stage two was, you know, to become an expert in
22:21
engi- in electrical engineering.
22:24
And then stageâ¦
22:25
Now, they didn't really call it stage.
22:27
Then they said the next career level was to be an even bigger expert so that you
22:32
were kind of a super expert, and then you could become an even super super,
22:38
like a world-renowned super expert.
22:41
And, and they just kind of missed the logic of, you know, that in, if you
22:49
looked at it through the stages lens, it's really about contribution, uh,
22:55
to the business and to the, maybe to the field, which isn't to be better
23:02
and better in a, in a very narrow area
23:05
Adam Hatcher: Mm.
23:05
So let's take that and move to st- c- 'cause you called it super expert.
23:10
But stage three, I've heard you say you go from, you know, stage one, apprenticeship,
23:14
stage two, contributing independently, stage three, contributing through others.
23:20
Norm Smallwood: others.
23:20
Yeah.
23:21
Adam Hatcher: ex-
23:21
Norm Smallwood: So con- so contri- so you're an expert, you're, you're a
23:26
super expert, doesn't matter, right?
23:28
Uh, but, but then you begin to broaden out and to look across
23:34
technical areas becauseâ¦
23:37
So let's say I'm in sales, I need to begin to think about, well, what
23:43
about, uh, what about manufacturing?
23:45
What about our strategy?
23:47
What about the, the engagement of the people?
23:50
Are we-- But we begin to take a broader perspective in stage three that, that
23:58
al- that allows me to consider not myself, just myself and to optimize me.
24:06
It's really how do I optimize the team or the function or
24:10
the area that I'm a part of?
24:12
And I can only do that by looking across, not just within
24:16
my own technical expertise.
24:19
So stage three people turn out to be really, really important.
24:25
Even we're gonna go to stage four, which is, you know, uh, seems like it's the
24:30
more, even more senior, but stage three people are where everything happens.
24:35
You know, you think about a family business or virtually any
24:38
business, it's that influencer, the person who can make things happen.
24:43
It's the person who knows how the company works, has the right network
24:50
and can, you know, in hockey metaphor, can stick handle through the bureaucracy
24:57
and sort of land things, whether it's a project, a new project, new product, um,
25:05
it, it becomes, uh, the critical role.
25:08
And you don't-- The funny thing about being in these stages is to
25:13
move from stage two to stage three, somebody doesn't need to promote you.
25:18
You can just start based on your understanding of how
25:23
things work in your company.
25:25
You can sort of self-promote, right?
25:28
You can start doing things differently.
25:31
Uh, and you don't, you don't need a, a promotion.
25:35
You should get, uh, compensation and so on that, that is commensurate with the
25:43
contribution, but you might not, right?
25:45
And, uh, certainly not in the traditional way of, of, uh, time and grade
25:53
Adam Hatcher: I, I'm guessing people hearing you talk about stage three
25:57
are thinking this, the key sign, the key indicator of moving to that
26:03
stage and contributing through others is that now you're leading a team.
26:08
And when we hear stage three, depending on the size of our company,
26:12
we think it's a team of three or a team of 15 or a team of 50 or 100.
26:18
Uh, for the introverts listening to this, Norm, do you have â¦ I,
26:23
I think you just answered this, but I wanna call it out explicitly.
26:26
Do you have to, to contribute through others, do you have to also lead a team?
26:33
Norm Smallwood: No.
26:34
No.
26:34
As, as a matter of fact, that's why I said, uh, to lead a team formally,
26:40
somebody needs to promote you and, and assign you a, a role to be the, to be the
26:48
leader of the team, like I'm a manager.
26:51
But you could also be a coach, a mentor, an idea leader, which are sort of more
26:57
on the technical side, not a people leader, but your, your influence is,
27:04
is felt not necessarily in an assignâ¦
27:08
It could be.
27:09
You could be a coach or a manager, butâ¦
27:11
Or not a coach.
27:12
You could be a, a manager, a team leader in an assigned way, but it, it,
27:18
uh, it doesn't have to work that way.
27:20
And one of the things that you hear in, in the shift from individual
27:25
contributor too to, uh, idea leader, mentor, coach, is that sometimes people
27:33
will promote the best Uh, expert to become the formal leader of the team.
27:42
And when that, when that happens, the person who isn't really in stage three
27:49
gets the role, the formal role, it's easy to say, you know, we lost a good engineer
27:55
and got a crappy supervisor because remember we said that the nature of people
28:00
in stage two is to be very competitive,
28:10
micromanager.
28:11
So, um, in every way imaginable, if you're not in stage three, if
28:13
you're not like this broad technical perspective, you know, care about
28:19
others, you know, a developer, an integrator, a synthesizer, an influencer,
28:26
um, if you're not that, then it's really hard to scale the company.
28:32
So if you were talking about family business, one of the biggest problems
28:35
is if you have a family member who's a, is a, is a stage two expert, they're
28:42
put in a, the head of something, whether the whole business or a team
28:47
or a function, and then they're really competitive and micromanaging, you
28:51
can't grow the business because that person cares about the, the, whatever
28:58
their area is, the financial side, the too much about the product side, only
29:04
about the-- it's not an integrated view.
29:07
Then very quickly employees don't feel valued or developed.
29:13
Um, the customer experience, you know, you have to have a stage three person
29:18
to get the customer experience because those are the people that care about
29:23
making sure that the employee and the customer have the right experience.
29:27
Everything happens at, you know, for your business, it's critical to
29:31
g- to be in that stage three role.
29:34
And the challenge is some people just don't like doing that.
29:38
They want to be experts.
29:40
So
29:42
Adam Hatcher: a big shift hearing you talk about it, mentally or professionally or
29:47
maybe even from a humility perspective.
29:52
In stage two, working with a family recently, and we were exploring this
29:57
concept of being for each other.
30:00
I'm gonna build trust with you by showing you I am for you and for your
30:04
good and for this company's good, not just out for my own interests.
30:08
But in stage two, competitive part, there's a little bit where you've been
30:13
given guide rails, and you can kinda be f- like you're f- you're probably
30:16
in an area you like, and you get good at it, and you wanna beat other
30:21
people and be competitive, and that's that conditional nature of business.
30:25
You've got, you've got to be good and be getting better.
30:28
Stage three, it feels like you actually are starting to leave that, and you
30:32
have to prove to people, "I'm not just for me and being good at what I do.
30:38
I'm for you.
30:39
I'm managing this project 'cause I want you and the customers
30:42
to be successful, not me.
30:43
I'm mentoring you not 'cause I wanna be seen as a great mentor,
30:46
because I want you to develop.
30:48
I'm not an idea leader like a chief, chief complaining officer that
30:53
you're not doing a good enough job.
30:56
trying to help create organizational ideas or structures for the business
31:01
and for you to be successful.
31:03
actually, s- you stage twos are gonna get more of the credit 'cause you're gonna
31:07
be doing the work and contributing."
31:09
It, it feels like a really big and maybe even difficult shift from the
31:13
comfort of, "I proved I'm good," to, "Now I have to make others
31:18
good," clients, company, employees.
31:21
Norm Smallwood: It's not about me anymore, it's about the success of us.
31:25
So yeah, so the, the sh- so let's go through the shifts again.
31:29
The shift from in, it, the, what you have to be great at in one is dependence.
31:35
You have to be willing to rely on others to show you the ropes,
31:40
and you have to listen and learn.
31:43
That's-- Then you have to stop doing that.
31:45
You have to stop doing that, then you become this independent contributor.
31:50
You have to be somebody who's got, who's an expert, who's
31:53
self-reliant, who's competitive.
31:56
Then you have to stop doing that to get to three, and you have to s-sort
31:59
of shift from, it's about really increasing my expertise in this narrower
32:07
area to caring about the integration.
32:11
So from, from individual expertise to integration, to synthesis, to influence,
32:20
to, you know, to coaching, to developing.
32:25
It's, it's again, it's, it's about from, from me in one and two to us in three.
32:32
So it's, uh, they, they, they're huge psychological shifts.
32:37
That's why they're hard, right?
32:39
And the term novation, because you're a lawyer, I will say this, is, is,
32:46
is actually a legal term, and the term means a renegotiation of an
32:51
expectation with concerned parties.
32:54
So every time you make a, a career shift, you have to renegotiate your role in the
33:03
organization because the expectations, not that you have, but that others have
33:09
of you are what you've been doing, right?
33:11
So everybody expects you to be an expert, and now you're
33:15
interested in the broader issues
33:19
Adam Hatcher: One of the hardest things in a family company is where you this
33:23
sense that you drift between roles, and you could actually be drifting from one
33:29
to two to three as far as expectations without ever this moment of reinvention.
33:35
I hadn't thought about that till you said it.
33:37
The import- uh, the importance of declaring a reinvention when
33:43
you're working with your family is it lets you reset expectations.
33:47
Iâ¦
33:47
Last week, friend of mine was promoted from lieutenant colonel to colonel,
33:52
and I went to the ceremony, and I watched one of his sons read the
33:56
orders, and the other son took his pin and replaced it with a colonel
34:01
pin, and it was a distinct reinvention
34:06
Norm Smallwood: a symbolic, uhâ¦
34:08
Yeah, it's very symbolic, right?
34:10
And I, I love the idea of the symbolism of saying, "I've changed ranks and
34:18
the, and there's an expectation that I can't do things exactly the
34:22
same way that I did them before.
34:24
I have to do things differently," right?
34:27
I, I'm, I'm expected to do differently.
34:31
The problem is when people are expected to do differently, but then they really
34:37
are unable to do it because that's not really what their predisposition
34:41
is, and then there's that gap, right?
34:44
Adam Hatcher: well, and my guess is to that, in your, the first two
34:48
stages, the average age was 38 or 39.
34:51
I'm guessing the average age of stage three is also 38 or 39?
34:57
And-
34:58
Norm Smallwood: there's, there's, there's-- it is not age-related.
35:01
It is-- The other-- There's two things that people think these s-stages
35:05
are related to because it's, it's standard practice to think that it's
35:13
either age, older people have, um, you know, the, an ex- a different
35:20
set of perspectives or it's position.
35:24
So, um, you know, it's, it's, uhâ¦
35:28
I remember the first time we were, we-- early on, we started with Gene and Paul,
35:34
we would do these, um, you know, look at expectation in senior leadership groups.
35:42
And I remember the first time a CEO said, "Gee, I'm in stage two."
35:47
And the senior leadership team around him was saying, "We know."
35:51
Right?
35:51
He was a finance guy, and everything that they did had to go through all of these
35:59
hurdles that, you know, were self-imposed.
36:03
And, um, and he was-- uh, this, this company, I won't say the name of it,
36:07
but this company has continued to grow partially because he took himself
36:11
out of the CEO role and, and hired somebody to do that role that really
36:18
was able to do it better than he was.
36:21
It just was-- it didn't match his interests or perspectives.
36:26
But he'd grown a, you know, billion-dollar company as a stage two guy.
36:32
So, but it didn't make it easy
36:35
Adam Hatcher: And that is, I remember w- I, I was actually
36:41
playing golf at a event, and I wasâ¦
36:45
And we were walking the round, and so it gives you a lot of time to talk.
36:48
And I was walking with a guy that was late in his career, CEO of a
36:53
family company, had successfully onboarded generation three.
36:57
And he had that moment, Norm, that I have heard so many times, but this was
37:01
the first time I heard someone say it.
37:03
He said, "You know, Adam, I kinda always wondered if I'm
37:07
as good as my title and if I
37:09
Norm Smallwood: Yeah
37:10
Adam Hatcher: this responsibility outside of my family company."
37:14
And underneathâ¦
37:15
I didn't have those words back then, underneath it, what he was saying
37:19
was, have the title commensurate with a stage four, but, uh, but am I a
37:26
stage two reality, and could I have gotten to this title somewhere else?"
37:32
And what you've just touched on, I think it's this fear that itâ¦
37:36
For ev- every family leader I've ever met, we all wonder the same thing, if
37:41
you haven't worked outside the company or worked outside the company much.
37:45
Could I have done this else?
37:48
So then stage fourâ¦
37:50
Norm Smallwood: the way, by the way, the comment for me on that one would
37:53
be it's very easy in a-- Like, in a family company, it happens because
37:59
you've got the right last name.
38:01
In a, in a growth company, it happens because you're available.
38:06
So it can happenâ¦
38:07
You don't have to be in a family company to find yourself in a role which doesn't
38:13
match where the, where the incumbent in the role doesn't have the expected
38:20
knowledge, skills, and perspectives.
38:22
That happens all the time.
38:24
We see that, uhâ¦
38:25
So it's-- I understand why it would be a concern because maybe
38:30
it was, you know, the, the gift of, of family that, that I got here.
38:35
But, uh, it is-- I mean, every time we do these, uh, we, we do these, what we
38:43
call them, is pipeline audits, we see the same thing going on because somebody's
38:49
available when the company's growing, so they get put in that, uh, in that role,
38:53
and it creates all kinds of problems
38:56
Adam Hatcher: from a negative family business perspective, it can happen
38:59
because of nepotism, but the same thing can happen in non-family companies.
39:04
Availability is what you've seen.
39:06
I think from a positive family business perspective with negative consequences,
39:10
sometimes it happens 'cause you've got someone who can buy the company.
39:14
Norm Smallwood: Yeah.
39:15
Adam Hatcher: to
39:15
Norm Smallwood: Yeah
39:16
Adam Hatcher: 'cause you can finance the company, just because you have a
39:20
certain degree, just 'cause you work a certain amount of hours or are a
39:23
certain age, doesn't necessarily mean you're stage two, three, four, just
39:29
like being available doesn't mean it.
39:32
Uh, so what isâ¦
39:35
So that is stages one, two, and three from our conversation.
39:42
In the next episode, we're gonna pick up stage four and then apply
39:46
it or talk about some practical applications for you personally, for
39:50
your family, and for your organization.
39:53
I hope that you've got some ideas running through your head after this episode.
39:57
Every episode we record, our goal is to give you things that will let you
40:02
sit and think about your inner family business, that unique way you work in and
40:06
own your company together, and take some of these concepts and apply them to it.
40:11
A couple things in the show notes I wanna share with you.
40:13
There's a link to RBL's website where you can get in touch with
40:17
Norm, and you can also, uh, get in touch with other members of his team.
40:22
Second, weâ¦
40:24
There are a couple of books that Norm has done that I really like, and
40:28
I've linked to one of them called The Leadership Code in the show notes.
40:32
There's even an assessment in it that when I took it, made me ask some pretty tough
40:35
questions about myself and my stages, but it ultimately helped me in my career.
40:41
So those two things are in the show notes, and I hope those
40:44
resources are helpful to you.
40:46
Look for the next episode where we finish the conversation with Norm Smallwood.
40:50
My best to you and your inner family business and its health and journey, and
40:54
as my grandfather would have said, thank you so very, very much for listening.