Transform Your Business from Scrambling to Scaling

UPDATED: July 31, 2014
PUBLISHED: July 31, 2014

“I was always doing things that were very entrepreneurial,” says Rand Stagen, the managing director of Stagen, a Dallas-based management consulting firm with a client list focused on mid-market corporations such as Which Wich and Studio Movie Grill. In high school, he says, “I was doing things like printing out T-shirts with our school mascot on them.” In college, he started an underground Greek newspaper. By age 23, he had gotten enough investors (37 in all) to start an alternative newsweekly called The Met, and was soon running a small publishing company. Before selling The Met in 2000, he had already teamed up with friend Brett Thomas to launch Stagen. He and Thomas shared a passion “for the idea of developing others,” he has said, and 15 years after teaming up, their work is being praised and recognized by executives nationwide.

Q: Who is your typical client?

A: Our clients really fit two profiles: entrepreneurs and family businesses. They’re all growth businesses, and they’re coming to us because they’re committed to learning and being better. A lot of times they’re either stuck (they’ve been high-growth for many years and now they’re plateauing), or they realize that if they don’t improve, they may get stuck at some point in the future.

Q: And how do you help them?

A: We originally thought that we could help organizations go from scrambling to scaling. A scrambling organization is highly entrepreneurial and opportunistic and exciting and firefighting, and there’s lots of heroics. A scaled business is a professional business that’s more mature. And so to help them go from scrambling to scaling, we thought we could work as consultants in a more traditional sense, where a CEO or a business owner would hire us to come in and work with his or her organization. But we found that when we worked with organizations where the owners or the CEOs weren’t actually engaging in their own learning simultaneously, we failed to create the results we all wanted. However, when we had executives who were actually engaged with us in our leadership training, who were also working alongside their companies, we had much more success. And so we started to better understand the relationship between the business owner and the business itself.

Q: What is that relationship?

A: I often say, “Leaders get the organization they deserve.” Their organization is nothing more than just a big reflection of who they are. All their strengths and weaknesses are reflected in the organization.

Q: Can you give us an example?

A: An entrepreneur comes to me and says, “Rand, I  need your help. We’re having a lot of issues with sales, and my sales leader is just not doing a good job.” Then he’ll say, “I also need help with my CFO, because the reporting I’m getting is not effective.” And he may go across his team and complain about two or three key people. And I’ll ask the entrepreneur, “Who hired those executives?” And he’ll pause and be embarrassed and say, “Well, I did.” And I’ll say, “Then who are you complaining about? Are you complaining about the executives, or are you actually willing to take responsibility for hiring those executives? And if those executives aren’t doing their jobs, then either you don’t have them in the right role or you’re not being effective at helping them be successful. This isn’t really about them, it’s about you, so let’s stop having a conversation about them and start having a conversation about the source of this problem, which is you.” That line of thinking is basically our philosophy—that to transform a business, you have to transform the leader of the business, and then the business will have space to do incredible things.

Q: So, how much time would you recommend a business owner spend on learning and growing versus managing the day-to-day operations?

A: If the business is really in startup, you can expect 90 to 95 percent of their time is spent working in the business versus working on the business. If you’re working in the business, you’re not thinking, you’re just doing. You’re experimenting, you’re being opportunistic, you’re learning. You’re learning through experimenting, right? So it’s a different kind of learning. It’s very hands-on. Then, as a business moves to higher levels of success over time, entrepreneurs who were doers are like, “Leadership training? I don’t have time for that.” Because they didn’t have time early on. But as they develop success by being a doer, by micromanaging, by being involved, by being a hero, their identity becomes completely connected to the doing. And then when a person says, “You should go through a leadership program or get an executive coach,” they don’t know how to reconcile that. They know how to be in the trenches with the teams, but they don’t really know how to delegate…. They don’t really know how to empower, they don’t really know how to select the right people to get on the bus with them, and they struggle because they’re not being asked just to spend more time working on the business; they’re actually being asked to create a new identity for themselves of what it means to be successful. That shift in identity—of what it means to contribute, what it means to create results—is critical to address.

Q: What are the three most common mistakes you see business owners making?

A: They’re micromanaging too much. They’re not delegating. They’re so involved in the details, they’re not leading the people.… What happens is that most owners get so busy staying in the business that they don’t pause and ask, “Are we going in the right direction? Do we need to make an adjustment?” And if they’re so into the details, it’s very difficult to make adjustments.

Q: What’s one way you can help?

A: We ask questions like, “Why are you micromanaging?” And they’ll say, “I don’t trust that other people can do it.” Then we give them tools and techniques that actually teach them how to delegate, that teach them how to create space for people to learn and grow. Very specifically, we teach people how to become coaches of their own employees. We teach them how to create safe and recoverable environments for their employees to learn and grow. And then what happens is the employees start to build capabilities. They start to learn on their own. But it can be very threatening to some of our clients, because they think, If I teach people how to do the things that only I know how to do, then what am I going to do?

Q: What’s your response to that?

A: We’re like, “Well, you need to actually learn how to do new things. You need to come up with new ways of creating value in the business.” And they go, “Wow! I actually have to get comfortable with my own discomfort around all these talented people I’ve hired who are now doing all this great work, and I’ve got to come up with what I’m going to do next.” They’re really reinventing their own roles and responsibilities, and that’s a very difficult process.

Q: Do you have your own executive coach?

A: I have a mentor who’s been working with me for 10 years, and I have an executive coach whom I’ve worked with for the last seven years. I’m on the learning journey as much as our clients are. I’m a living expression of the age-old idea that the more one learns, the more one realizes how little he or she knows.

Read more of Rand Stagen’s management insights—valuable leadership lessons from major brands, including Whole Foods, Zappos and Patagonia.