Avoiding the Pitfalls of Developing an Ownership Culture
This post continues last week’s post Developing an Ownership Culture.
Clarifying ownership creates agency. Giving people agency grows the capacity of the people and the organization. But it’s not easy. Here are some traps to avoid.
Photo credit: HippoPX.
The most important thing for scaling an organization is developing an ownership culture. Ownership Culture means that every individual is aligned to the mission and has accountable autonomy in their area of responsibility. This leads to an explosion of productivity and engagement.
But don’t fall into these traps!
Trap #1: Sloppy Delegation
It is not uncommon for a manager to think something has been clearly delegated, while the subordinate has no idea that a task has actually been assigned or when it may be due. When the manager eventually comes asking for results, both parties end up frustrated. Good delegation is clear on the why, what, who, when, and success measures. Let’s break those down:
Why: What is the mission for this project, product, or area of ownership? How does this contribute to the overall organizational mission?
What: Be clear on what exactly you are delegating. What is in scope and out of scope? Where are they likely to need to coordinate with other people who own related areas? What resources will they need?
Who: Be clear on who is the owner, who is the sponsor (or delegator), who is available for support, and who owns areas requiring coordination.
When: When is the overall project due? For longer-term or more ambiguous areas of responsibility, the first step of delegation may be for the prospective owner to propose specific milestones that will demonstrate progress. It will be important for the delegator and the new owner to agree on these milestones.
Measures: Once you agree on everything above, you will also need to agree on how and when success will be measured both at the end and at key milestones. Are you increasing sales of product X by 15% by June 1? Are you hosting a staff event with an 80% satisfaction rate? Are you completing the beta test by End of Year?
When you assign ownership to someone, you (as the sponsor) will typically give to them (the who) the why. Together, you will work out the what, when, & measures, and then they will decide on the how (maybe asking for your input on key decisions). Simply clarifying these points will greatly increase the likelihood of success. You will have alignment on what success looks like, and your team will have ownership on how to move forward.
Trap #2: Assigning Tasks not Delegating Ownership
When you are leading, you assign ownership and give freedom and resources. When you are micromanaging, you assign tasks and control the details. Make a poster. Consider a tattoo on your right arm. This is where the magic is.
Managing tasks not people tends to reduce the agency of the people working for you. Therefore, they become passive, and they don’t work as hard. They don’t make decisions freely, and then you actually end up doing more work as the leader. If you manage tasks, you’re keeping the monkey on your back not giving it to them. You need to get the monkey off your back!
Next to sloppy delegation, this is probably the most common delegation pitfall, especially for founders. Here are a few warning signs that you haven’t delegated ownership.
If you haven’t formally outlined the why, what, who, when, and measures then you probably just had an ambiguous conversation that will result in frustration and dropped balls.
If you are making the decision, you are still the owner. You have only outsourced some of the tasks of information gathering.
If you are driving the action (gathering the team to work on it, collecting the information, identifying the solutions, etc.), then you are still the owner. If you delegate ownership, the owner does these things, and you only support as needed.
If you are personally making the presentation to the CEO (or your direct leader) to report progress on the issue, then you probably haven’t delegated ownership.
If you can’t answer the question, “Who gets fired if this thing blows up?” then you are probably still the owner. Someone’s ass needs to be on the line. If that’s not clear, then ownership isn’t clear. If it’s still you, then you haven’t actually delegated. (Usually, this is a figurative question because most problems are not “fire-able” offenses, but the metaphor stands. On the other hand, for bigger catastrophes, more than one level of leadership may be held responsible.)
Focusing on tasks not people forgoes the benefits of compounding interest. The more you invest in your people and let them manage the tasks, the more capable they will become and the more tasks they will be able to take over. Eventually, they will follow your example and become effective delegators as well. Together, you will take over the world, so to speak.
Trap #3: Keeping Ownership at High Levels
In the early stages of the company, the top executives will be the owners of most areas of responsibility. However, as the company grows, the executive team shifts from working on tasks to working on people. [See also: Beyond the Three Musketeers.] Throughout this transition, the top leaders are shifting more and more from working on tasks to leading people.
When you have an exec who tends to keep ownership, then you probably have a team of B players. Controlling leaders tend to hire less competent people who are willing just to do tasks. They may be very competent at completing tasks as assigned, but they are probably not great at taking initiative within an area of ownership. They are happy to have the monkey on someone else’s back.
Instead, your leadership team needs to grow into coaches who hire A players who want the monkey, and who embrace the responsibility to solve critical problems. When you review your Areas of Ownership, if most of the names on the list have a C or VP in front of their title, that’s a warning sign that your organization may be hoarding ownership of critical responsibilities.
Trap # 4: Founders vs. External Hires
One common area of conflict is between executive founders and executives who are hired from established companies. Established companies have already developed their form of ownership culture, so new executives there simply need to learn how to do it like everyone else is doing it. On the other hand, founders of companies in the process of scaling up need to unlearn the patterns that made them initially successful (getting their hands dirty by doing whatever needs doing) and learn new patterns of leadership that will help the company scale (delegating ownership and focusing on people, not tasks). This is often a difficult transition in mental frameworks.
Each group has an important growth opportunity here. The founders can learn from the newer executives who have more experience in well-developed ownership cultures. Also, the incoming execs probably have important insight into some pitfalls to avoid with institutionalization.
The leaders newer to the company can also grow by developing empathy for the founding crew. When they started the company, you couldn’t operate with this model because there was nobody else to empower. That is the Three Musketeers model: We’re all in it together, and we do the work. With the Coaching Staff model, the leaders have to move to the side of the field so the players can do more and more of the work. The founders are basically shifting their organization from propeller engines to jet engines while the plane is in flight. Understanding their fellow executives will also help them lead their own teams who are likely going through similar mental shifts.
Trap #5: Thinking about Outcomes, not Teams
Leaders often see the outcomes they want but are frustrated that they can’t seem to get there. They ask in frustration, “Why can’t I just ask for what I want, and it gets done?” These leaders are thinking of only one step: the outcome. Instead, you have to think of your job as being two steps removed: building a machine (systems and teams) that will lead to the desired outcomes.
This is a new level of thinking, and it can feel scary at first. Leaders often think, “I’m here for the outcome, not the people, and if I don’t do it, it might not get done the right way.” People can’t usually relax into this system until they experience it. Once people run it a few times and see that it actually works, then they can buy in and adjust their whole Area of Responsibility to this model.
Trap #6: Neglecting Systems
Often founding leaders feel that they do not have time to develop robust systems of delegation and accountability because they are too busy doing the actual work of the company. This mentality handcuffs the company, limiting its growth to the capacity and bandwidth of the founders.
Without robust ownership systems, the founders get stuck in a vicious cycle of not having time to develop good systems. After all, they are spending all of their time putting out fires because they do not have good systems. The only path forward is the combination of a bias toward developmental action and developing an ownership culture. Without those, you will either accept (by default) a lack of growth or sell the company to someone who will probably deploy the systems we are describing here.
Summary
If you want to scale your company, you have to scale yourself. This is how.
It’s not easy. It’s quite difficult to change our mindsets and our behavior patterns. The systems are actually the easiest to change initially but the hardest to make stick because we keep getting in the way!
To make this kind of personal and organizational evolution really work, you will likely need a coach and an intentional peer group. This is hard work, but it is necessary to fulfill that crazy dream that led you to start a new company. Therefore, cultivating an ownership culture is some of the most rewarding work you will ever do.