The SR71 (now retired) used to fly its missions 15 miles above the earth – an altitude that allows you to see the coast of California from Arizona. When we talk about organizations and how growth is built within them, sometimes it’s useful to pull way back and get that kind of perspective. By taking the truly high-level view, we can find insight and perspective that eludes us at runway level. Things look cleaner and simpler from that height, and it allows us to see relationships that might not be clear to us when we’re on the ground.
When we get this kind of perspective, we can see that organizations are built of two distinct boxes:
- The first box I call the Matchmaker. I term it the matchmaker because it’s constantly working to match the firm’s products and services to the most relevant market niches. In this box, we have the strategy team, customer insight group, product development group, marketing, and R&D. The purpose of this box is to find, form and deliver value propositions at scale, which serve a unique and winsome customer need. This box is where the creative functions live, and in most firms, it has a variety of people, systems, and processes to produce a high-quality portfolio. Measurements for the Matchmaker are things like cycle time, differentiation, pricing power, and market share.
- Tightly coupled to the Matchmaker, we have the Same-Maker. The Same-Maker is an amplifier at scale. It takes the outputs from the Matchmaker and builds processes and systems that allow the firm to deliver the Matchmaker’s intellectual property at scale. In this box, we have planning, logistics, production, quality, and distribution. This is the box where the operators, (that is those who thrive on “doing” and “optimizing,”) live and build high-quality, very repeatable systems that deliver what is needed on time and with great efficiency. When we talk about measurements here, we speak of inventory turns, cycle times of production, cost-per-entity produced and on-time delivery performance.
These two boxes are bridged by the Growth Leader functions. This includes the Corporate staff officers and those key mid-senior leaders that work across the boundary to harmonize, govern and align the firm as a whole.
Working Within the Box
When you get a chance to work inside a firm, it’s very clear within a few minutes which one of the boxes you are working with:
- When you’re on the strategic side of the firm, you hear words like strategy, business model and product market fit.
- When you’re on the operations side of the house, you hear words like plan, forecast, earnings and inventory turns.
The language reflects the core focus: on the operations side, you are looking at execution of the current state. Where on the strategic side, it’s all about the execution of a plan to get to a better future.
In a static world (somewhat like the 1950’s and 60’s) you could build these boxes, and they would stand for a very long time and produce products and services with minimum intervention. As the world became more complex, however, the need to morph and change our boxes became hugely important. In the current realm, even with the best tools, we are seeing in the press that there is a very real possibility a modern corporation’s life will slump to under 10 years.
In fact, how a firm deals with the tensions between these two boxes will very likely make the difference between its success and decline. These tensions occur across dimensions of time (future vs present), communication (conceptual vs precision) and view (high level vs very granular).
Signs That Tell us we Need to Strengthen our Growth Leadership
The key insight that this high-level view affords us is the ability to examine the strength of the two larger boxes and connection between them, and consequently the high stakes in getting it wrong.
Left on their own, the Matchmaker and Same Maker have a lot of inertia to stay the course and follow their niche. The challenge of getting the two teams working together shows up in a variety of ways, usually with the firm drifting into a less productive territory, or missing a shift into a market zone. Specifically, we see:
For the Matchmaker:
- Loss of the compass heading – When the matchmaker begins to drift, we have strange things start to happen to the firm and its brand. For example, Harley Davidson co-branding imported lightweight motorcycles and snowmobiles and Jeep co-branding clothing lines.
- Keeping the guard rails too tight – While it’s important to get the firm to scale in the early stages, once scale is achieved, we need to make the narrow road wide enough to stay out the ditch of obsolescence. The Swiss watch makers famously ignored the quartz oscillator until is was too late.
- Putting on the headphones – When we keep the matchmakers away from doing real, on the ground research in the market, we set them up to have the big miss. This usually happens due to an over focus on the internal viewpoint that creates a lack of “truth telling” about what’s really happening in the market.
For the Same-Maker:
- Feeding it low ROI projects – When we send a stream of diminishing return projects into our Same-Maker, it begins to sputter, pricing power is lost, and the margin is not far behind.
- Using it as a prototype shop – This box is meant to run at scale. When we make the mistake of moving from scale to job shop batches, the efficiency of our Same-Maker will suffer greatly. This was the great lesson taught to the North American automakers by the imports – you don’t need to have literally thousands of option combinations.
- Buying a new one and merging it with your old one – When we choose M&A over organic growth, there is a temptation to buy and merge. There is always a large debt to be paid to integrate two Same-Makers that can suck the air out of the deal. Many firms are now looking at this differently to avoid the hidden M&A curse.
How Businesses Outgrow their Boxes – and How a Growth Leader Can Help
Early on, when firms are about 125 people or less, they live in one combined box. (The number 125 is significant from the insight gained from Dunbar’s Number, which says that 125 is the maximum number one dynamic leader can influence on their own.) In this world, the creating work is tightly coupled to the producing, and communications flow through the firm very organically. Everyone likely knows the customer and the salesperson who sold the order. With this intimate relationship, needed changes and realignments are very seamless and continuous, and the firm follows its core market like a heat-seeking missile.
When the firm hits its stride and begins to scale beyond 125 people, people begin to form into teams within the boxes with more autonomy. These teams are like Russian dolls, and while its necessary for scale, the boundaries create communication issues that need to be addressed to keep the organization vital. This creates a need to communicate deliberately, vertically and especially horizontally, to allow everyone to remain on the same page. The walls of the boxes become firmer and more opaque. No one person is sitting in the heavens like the SR71 pilot to guide the minute details. The establishment of these boxes, as well as a senior leader function, is a very turbulent time in an organization’s life.
It is into this breach that we introduce the Growth Leader. The growth leader is a card-carrying member of one of these two boxes, with a “work visa” for the other. Growth Leaders usually have deep roots in one of the functions, and in the course of their work, gain a strong working knowledge of how the firm drives value by working across the org chart. Growth leaders usually have a strong, innate need to know the end-to-end process of both boxes, including the customer and market demand. They are in a unique position to find the “thru-line” of the firm as it relates to a specific client or customer need. When the Growth Leader needs to, they can find the right spot in the right box to go to work and make a variation of the product or service for an emergent customer demand. They can also see when trying to meet that demand will stretch the box too far and threaten the core deliverables of that box.
Today’s firms are very complex undertakings and by simplifying them into just two boxes, we drew out the need for having very well trained and equipped Growth Leaders in your firm. By working hard to find and quip these leaders, you will have long and fruitful arcs for the Matchmaker and Same-Maker boxes of your firm.
(For more on Growth Leaders and their work see posts here, here and here.)
If you found this useful and would like to “chunk it down” to talk about specific questions in your firm, I’m happy to talk. Please reach out to me on my direct line at (847-651-1014) or set up an appointment on the books by using this link .
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