Latest / The Start, Scale & Succeed Podcast / Over-Visioned: You’re Not in Whitewater… Yet with Scott Ritzheimer (stages 3,4,5) - Ep. 430

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Over-Visioned: You’re Not in Whitewater… Yet with Scott Ritzheimer (stages 3,4,5) - Ep. 430 · 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
0:06
grows with you through all seven levels of your journey as a
0:09
founder. I'm your host Scott Ritzheimer, and while we talk a
0:13
lot about those seven levels, we're actually here in part two
0:16
of our series. You're not in whitewater yet to talk not about
0:20
the levels that you go through as an individual, but through
0:23
the stages that your organization will go through
0:27
with you at the helm. Most notably, we're going to talk
0:30
about the whitewater stage. And if you were here in the previous
0:35
lesson, you know what whitewater means, and and you know that
0:38
more than ever, folks are finding themselves in this
0:40
whitewater stage prematurely, and when you do, you end up
0:44
having to deal with all the terrible parts of whitewater,
0:47
which we didn't go into a ton. But I just want to lay out here
0:50
to kind of set the stage for why this matters so much. And the
0:55
first thing that'll happen in whitewater for many
0:58
organizations is that you'll start making a bunch of
1:00
mistakes, there will be a bunch of errors, and you'll start to
1:03
recognize it's not just one or two people, it's not just one or
1:06
two things, it's just systemic problems all over the place.
1:09
Doesn't sound good, does it? No, not at all. Second thing that
1:13
you'll notice is because of those mistakes and errors,
1:15
oftentimes we start running into profitability issues again.
1:18
That's not fun either. The third thing that will happen is that
1:23
we will try to overcome those mistakes and errors. We will try
1:26
to redeem profitability, and we won't be able to. And so, what
1:33
happens is, as a leader, we'll start to doubt ourselves and
1:36
we'll start to lose confidence. Many of you may recognize this
1:39
is a big part of what can happen in level four, or if you ended
1:44
up in whitewater prematurely, actually back in level three of
1:48
your founder's evolution. the The thing that happens when you
1:52
start to lose confidence, when you start to lose confidence in
1:54
your leaders, is that you start to see some frustration and some
1:58
infighting on your leadership team, and a big part of that is
2:02
because you're trying to get visionaries, operators, and
2:04
processors together, and maybe synergists too, and and that's
2:07
just a messy problem. But if you got into whitewater prematurely,
2:11
that's actually part of the reason why you got into
2:15
whitewater prematurely is because of the composition of
2:18
your leadership team. And so, what we want to do is help you
2:23
to recognize that if you want to get to predictable success,
2:27
which many of you likely do, the way to get there isn't by doing
2:31
the things that you do in predictable success, namely
2:34
getting visionaries, operators, processors, and synergists to
2:37
work together and create high-quality decisions. Instead,
2:41
we have to do the things in fun that allow us to to grow as big
2:46
as possible in fun, so that we can be in this nasty whitewater
2:49
stage for as short as possible. There are a few things that get
2:54
in the way of that, and notably for this series, what I want to
2:58
talk about is the effect of leadership imbalances and how
3:02
they can unintentionally but very really pull you into
3:08
whitewater prematurely, and again, that's a big deal. We
3:12
don't want that to happen because then we end up having to
3:14
fight the the whitewater thing and a growth thing all at the
3:19
same time, and it's really really hard, and the three big
3:22
ways that we tend to get this wrong are that we tend to be
3:26
overvisioned, overprocessed, or over synergized, and we tend to
3:33
do so because we have too many visionaries, too many
3:36
processors, and/or too many synergists. In other words, the
3:40
only real way we want to end up in whitewater is because we were
3:44
so effective at leading through so many operators, the fourth
3:48
style, that we were necessarily thrust into whitewater because
3:53
of the complexity of us, the size and scope of the
3:57
organization, and that's really important because that tells us
4:01
what actually puts us into whitewater isn't so much that we
4:05
have too much of any one given thing; it's that too much of any
4:09
one given thing will create too much complexity.
4:14
That's the real problem: is that too much complexity is actually
4:18
what leads us into whitewater. Now we can do that because we
4:22
have to, because there's no other way, because we've
4:24
over-operated and we've done everything that we can in the
4:27
fun stage. We've won everything that we can win, and now it's
4:30
time to change the game. Great. However, if we end up there for
4:35
some other reason, like the one that we're going to talk about
4:37
in this episode, which is if you end up there because you are
4:41
overvisioned, that's going to be a really big deal. Because if
4:47
you end up there overvisioned, then now you have two problems
4:51
that you have to solve. First, you have to get appropriately
4:56
visioned. You have to have less vision, and. You also need to,
5:01
if you're going to solve for whitewater, you also need to add
5:04
systems and processes and how you make decisions. And really,
5:07
the third problem is, and you have to get enough operators to
5:10
pull you through all of it. And and so, what ends up happening
5:15
when we end up overdoing any one of these things is it it
5:18
multiplies our problems. Well, how do you know if you're
5:22
overvisioned? What does that actually look like? This one
5:25
used to be the most common of the three wrong ways to get into
5:29
whitewater, and and it might still be, but the others are
5:32
catching up very quickly, and and we tend to see this. The
5:36
best example that I can give is actually the high tech world,
5:39
the venture backed model. Many of these organizations are
5:44
overvisioned. There's this idea that we can be unprofitable for
5:47
decades because we have this big vision that's worth everything
5:50
one day. And what happens is because we we have so much
5:56
vision, we create so much complexity. I was just actually
5:59
in a meeting with a gentleman who was in the the early
6:03
struggle stage, and he was stuck there. And I believe that a big
6:07
part of why he was stuck there was because he was trying to
6:11
over engineer his vision to become, you know, not
6:17
necessarily even for the wrong reasons, but to become like a
6:19
billion dollar startup right away, and so because of that, he
6:23
was saying yes to all of these things, and he was he was
6:26
creating all kinds of complexity by being over vision, by being
6:32
too visionary, instead of recognizing, hey, here's a
6:36
problem, here's a solution, let's go and sell the blank out
6:41
of that solution. Let's get as many people on that solution as
6:44
possible. He thought, well, let's help as many people by
6:47
doing as many things as possible. And so, I think even
6:51
by his admission, he had like five businesses that all existed
6:54
inside of one. That's a classic example of someone being
6:58
overvisioned. Historically, if you were overvisioned, you
7:03
didn't really end up in whitewater because you never
7:06
made it that far. Most overvisioned organizations
7:10
actually fail in early struggle because most early struggle
7:15
organizations start with a visionary. This is true for
7:17
businesses and nonprofits. We'll get to nonprofits in a couple
7:21
episodes because they they tend to have their their struggle in
7:24
another area. So being overvisioned usually is that we
7:29
say yes to too much, we pursue too many shiny objects, and
7:34
again, usually that that there's a Darwinian effect to that. That
7:37
if you can't say yes to the right things and then stay
7:40
focused enough on those right things. You're usually going to
7:43
struggle with early struggle, and you're probably never going
7:46
to get out, or you're going to kind of be permanently stuck
7:49
there, thinking you're one idea away from a billion dollars. But
7:54
let's say you you you get enough of those operators around that
7:57
we're looking for, and they get to work doing this thing over
8:00
here, you can still get yourself into whitewater by being
8:04
overvisioned by tackling too many new things at once. If
8:09
you'll remember when I briefly went through the stages, the
8:12
goal of early struggle is to find a profitable, sustainable
8:14
market. The goal of fun is to sell so you can mine that
8:18
market, so you can make as much revenue from it.
8:20
One of the things that overvisioned organizations do is
8:23
they start too many things too quickly, and the result of that
8:27
is that they have too much of their organization stuck in
8:31
early struggle. Because everything that you start, no
8:33
matter what stage you're in right now, that new thing starts
8:36
in early struggle, and you can imagine how complicated that
8:40
makes things because you've got this kind of core business
8:43
that's that's that's not all that solid. Like it's doing all
8:47
right, but the core business starts to struggle under the
8:51
weight of all of these little new business ideas that are
8:54
sucking life and cash out of it. You see this happen a lot with
9:00
with with you know not necessarily franchise but like
9:03
multi location organizations like a multi site church or a a
9:08
new coffee store chain or anything a new restaurant
9:12
anything like that that has little locations, you'll see
9:15
that they can get over visioned where they grow faster than
9:19
their capacity. They they add a store. It works. They you know
9:22
they fight scroll fight fight and scroll. They fight claw
9:27
scratch and itch their way to success. And then they think,
9:30
hey, let's do another one. And they learn some things, and
9:33
they're able to get that other one up off the ground a little
9:35
bit faster. What they don't recognize is when they try that
9:38
again the third time, it's not that they don't know how to
9:42
start a restaurant; it's that they don't know how to lead
9:44
three restaurants. Again, it's another example of being
9:48
overvisioned, and so you can end up in whitewater by biting off
9:52
more than you can chew from a vision standpoint by saying yes
9:56
to things that your operators can't actually execute. And this
10:00
is the one that's probably the hardest to discern between you
10:04
know the the natural legitimate cause for whitewater and this
10:08
one. And so, how you can figure out if it's that you're over
10:11
visioned or that you're you're just over operated and you're
10:15
legitimately in whitewater. The first thing that I'll point to
10:18
is not perfect, but it's a pretty helpful guideline, and
10:23
that is, if you have more than 40, 5060, people, then there's a
10:30
good chance you've run the right place long enough that you're
10:33
actually in what we would call capital W Whitewater, because to
10:37
get to that point, it requires that you structure things pretty
10:41
well for operators, so that's the first one that we want to
10:44
look at. If if you're hitting whitewater, we're screwing up,
10:47
we're making mistakes. Your best people are spending all their
10:49
time firefighting. It may be because you said yes to too many
10:54
things too quickly, especially if that happens at five or 15 or
11:00
25 people. You don't want to be in Whitewater at 15 people.
11:05
That's a really, really big deal, and it's a really, really
11:08
bad sign. That is not a mark of accomplishment. That that's
11:12
usually not because you created so much success and fun,
11:15
although it can be. These aren't these aren't unequivocal. But
11:18
generally, if you're in Whitewater at 15, you've unless
11:22
you can figure out how to get back to fun, which we'll talk
11:26
about in a moment specifically for this problem, then again,
11:31
whitewater is going to be really, really hard because
11:33
you've got a long way to go and a lot of work to do to get to a
11:36
size that can sustain predictable success. So that's
11:40
the first one. Pay attention to the organization size. The
11:43
second one that you want to pay attention to, and this is a
11:45
little bit more qualitative over quantitative, and I'd encourage
11:48
you not to just ask it yourself, but to bring in a couple of
11:51
those trusty operators that you have around, and I want you to
11:57
ask if you have fully mined your market. If you offer some type
12:08
of service to the Northeast region, right? There, there's
12:12
probably a a very very big market that you can access, and
12:17
so let's assume that it's not all of the Northeast, but it's
12:20
in a drivable three-hour range, just to give ourselves some
12:23
parameters.
12:25
If you are not reaching that whole market, if you've not
12:30
mined that whole market, if you're not to the point where
12:33
you have so much market saturation that things are not
12:35
just slowing down because you're bored with what you're doing,
12:38
but slowing down because you are running out of clients to to
12:41
bring in, and that's usually going to be at a minimum 5% of
12:48
the market, right? The total market. So you can compete with
12:51
20 other people the same size as you or bigger. That's not a
12:56
scientific number. That's just a ballpark figure that we're not
12:58
talking about like a 10th of a 10th of a percent of the market.
13:01
If you haven't really saturated the market to that extent, then
13:05
you probably have a lot of mining left to do. And if so,
13:09
you want to find a way to get back to fun and mine that
13:12
market. Get to five or 10 or 20 or even 50% sometimes depending
13:16
on how good you are. Instead of again trying to fight whitewater
13:20
and this market problem at the same time. So, think about how
13:24
much of the market have you accessed. Now, if you're sitting
13:27
there saying, "Well, it's only a small percentage, then the
13:30
question, the next question is, "Well, why? And oftentimes, if
13:34
you're overvisioned, it's because you're too busy chasing
13:36
other things. You're too busy chasing other products or or
13:39
adding other locations somewhere else. You've artificially
13:42
created complexity. An example that I have of this: there's a
13:45
local business here, and they were thinking about. They were
13:48
sitting just under $5 million, I think. They were in fun. They're
13:51
having a great time, and they had an opportunity to open
13:54
another location about eight or nine hours away. And when I sat
13:59
down with the founder and we talked through this. I
14:01
recommended that he really strongly consider not doing
14:04
that. Ultimately, it was his decision, and and you know I
14:07
could show help him figure out how to build an organization
14:10
that could span that type of a distance. But I asked him. I
14:13
said, "Well, how much room do you have to grow here? He's
14:16
like, "I don't know, maybe 3x, maybe 4x. I'm not sure. And so I
14:23
encouraged him just consider it. And ultimately, he decided to
14:26
just stay here in Atlanta and double down on this location.
14:29
And so instead of what he thought he was going to do, have
14:32
a location sitting around 5 million and another location
14:34
hopefully getting to 3 million in a couple years, he was able
14:38
to create an organization that exceeded $20 million dollars.
14:41
Last time I checked, I think they were around 25. With one
14:45
location right here, didn't have to travel anywhere. Didn't have
14:48
to, you know, lead a whole nother team some in some other
14:51
state. He could do all of it right here. That's the power of
14:57
not overvisioning your organization of. Adequately
15:00
visioning it, but not too much. So, adding that other location
15:04
that far away would have dramatically increased
15:06
complexity, but it wasn't necessary-at least not yet. And
15:11
that's the really big deal with overvisioning an organization.
15:16
The last thing that I want to point to here, because this is a
15:19
really common factor, and it's going to be a little bit more of
15:22
a personal one. Most of the time, overvisioning is a pure
15:26
reaction from the founder, and this is kind of true for all
15:30
three of these problem problem approaches that we're going to
15:34
talk about. But this one in particular is pretty poignant
15:37
because a lot of founders are very strong visionaries. It's
15:40
kind of needed in the early part of the game. Very visionary
15:47
leaders often struggle to do the type of management that
15:51
operators need. They get bored with it. They get frustrated by
15:55
it, and they make the mistake of thinking, "Well, I wouldn't want
15:58
to be led that way, so I'm not going to lead them that way. And
16:03
the truth is, and the the best thing that I can give you right
16:05
now is that you have to recognize that you're not
16:08
managing you. You're not managing you. You're a
16:11
visionary. They're operators. Now operators don't want to and
16:15
can't be micromanaged. It's not going to work.
16:18
But they do like to be managed well, even if they wouldn't use
16:22
that language, what I mean by managing well, most operators
16:26
will thrive in that kind of an environment. What is managing
16:29
well? It's giving clarity on the vision and expectations. It's
16:34
delegating authority, staying out of their way is a better way
16:37
of putting it, and it's holding them accountable when the job is
16:41
done to the results that you expect. When you learn to do
16:46
that effectively, you can generally get the most out of
16:50
your operators and create an environment for them to thrive.
16:54
And when you do, you can do like this gentleman here in Atlanta
16:58
did and grow to four and 5x what you are right now without ever
17:03
leaving the fun stage, without ever having to overcome
17:06
Whitewater. Imagine like he could have hit Whitewater at 5
17:11
million and hit it really hard, but instead he's going to get to
17:14
hit Whitewater at 25, 30 million. Who knows? That's a
17:18
huge difference. You have so many more resources. You have so
17:21
many more opportunities. You have so many more great leaders.
17:24
You have the ability to pay even better leaders. When you can get
17:28
big in fun, it really really helps. Now, how do you do that?
17:33
So let's say you you're recognizing, hey, I I either
17:36
haven't managed my operators well, or I've said yes to too
17:39
many new visionary ideas, and I need to I need to unwind that so
17:43
that I can get back to fun, get a lot bigger before we hit
17:46
whitewater. That's that's what you do. And what's hard about
17:52
this is that it's not actually hard to understand what you need
17:55
to do. What's hard about this process is that it's not
17:59
glamorous. That's really it. When I when I help a team, and
18:04
we recognize, hey, we're over visioned. We've been chasing too
18:07
many things. It's it's causing us to to be in trouble. What do
18:10
we need to do? The answer is, you need to mine your
18:12
profitable, sustainable market. You need to find a handful of
18:16
operators, either inside your organization or a combination of
18:19
inside and outside, or you have to bring a couple in, and you
18:23
need to give them clarity, delegate them authority, stay
18:26
out of their way, and then you know help them see whether
18:30
they're winning or not with accountability. That's not that
18:36
hard to understand intuitively. If you're sitting there, you
18:39
probably already know what you've done to make things too
18:42
complicated, but here's what's uncomfortable about it: it means
18:46
you have to say no to some shiny objects, you have to say no to
18:50
some good ideas, or at least not yet. You have to exercise some
18:56
discipline that maybe you thought you had graduated from
19:00
because you were so successful, and I'm not trying to be hard on
19:03
you, but but I do want to help you see that a big part of the
19:07
reason why you ended up in Whitewater prematurely is
19:10
because of the way that you're showing up. Now that's bad news
19:14
because it means that you're a big part of the problem, but
19:16
it's actually really good news because it means that you're
19:20
part of the solution, and that's actually fantastic news because
19:23
it means that it's actually going to be relatively easy for
19:27
you to do something about it, and and so that's what I would
19:31
encourage you to do. I would encourage you to take inventory
19:34
of what's going on and how you're making decisions, and
19:36
say, am I managing my operators well, or making sure they're
19:39
managed well, and are we being disciplined in what we say yes
19:43
to, so that we can really focus on mining our profitable,
19:45
sustainable market by getting as big while staying as simple as
19:49
possible for as long as possible? And so, as we wrap up
19:54
this one, I just want to reiterate that being
19:57
overvisioned can look really great. Right, like being this
20:01
guy with a super big vision, and you might even be able to
20:03
attract really great people by having this super great vision
20:07
and being super visionary. But if you don't find a way to to to
20:13
harness that vision into a usable energy and infrastructure
20:18
for your operators, you're going to end up in whitewater way
20:22
before you should.
20:23
You're going to end up like Liam, my son, wearing you know
20:26
an adult's clothes in a kid's body, pretending to be a bigger
20:30
visionary than you are, and being frustrated by how
20:35
inadequate your team is to achieve that vision. It's not
20:38
just their fault. It's that you are overvisioned as an
20:42
organization, and so rather than fight against that, rather than
20:46
trying to de like to to minimize your vision, increase your
20:50
operator, and build systems and processes for Whitewater all at
20:53
the same time, we can split those out. We can lessen vision
20:57
a little bit, increase operator a little bit, get those back
21:01
into balance, and then drive that thing for as long as it'll
21:04
run. And then when the time comes, we can address bringing
21:09
the processes in, bringing the process soars in, and ultimately
21:13
getting to predictable success. But the best thing that you can
21:16
do is to stay in fun for as long as you can while still growing
21:19
like you want, and that's very cool. Now, what that brings us
21:25
to is the second reason why folks end up whitewater when
21:29
they shouldn't, and it has to do with those systems and processes
21:33
that I just talked about as being the key to getting out of
21:36
whitewater. And we'll talk about those in the next episode in
21:41
this series, it's going to be really important because the
21:45
fastest rising wrong way for a business to end up in whitewater
21:51
is exactly what we're going to talk about in that episode. I
21:53
hope to see you there. Hey everyone, Scotty Timer here.
21:59
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