The Right Chief Executive at the Right Time
Self-Awareness + Humility > Leadership Skills
Much has been written about the ideal traits of the Chief Executive. In many construction companies, they hold the title of CEO, Owner, or President. Whatever you call it in your company, I’m talking about the highest-level decision-maker in the business.
Should this person be a visionary? Should they be a technical expert? A great and inspirational people manager?
I'm a student of books such as Verne Harnish’s Scaling Up, Michael Gerber’s The E-Myth, and Gino Wickman’s Traction, and I believe in much of what each of these writers has to say about the ideal leader. In my work as an advisor to construction companies, I’ve also seen far too many exceptions to the rules laid out in those books to give myself over to any single formula for success. My experience tells me a company can thrive regardless of the skills that the Chief Executive brings to the table if that leader is self-aware and humble enough to work on themself.
Stage Matters
One of my mentors, Greg Alexander, writes about stages of business for professional services firms in his book The Boutique. While this book is far more relevant to my consulting business than your construction company, like many things, there are universally applicable lessons to be learned. Greg outlines three business stages.
Growth is the first stage. This is the stage in business focused on striving for consistent viability. The company is heavily reliant on the Chief Executive to wear many hats in the Growth Stage. The more revenue you make at this stage, the more pain the Chief Executive will experience, so once financially viable, the business should quickly shift to stage two.
Scale is the second stage. At this point, the company is established and consistently profitable, and the focus must shift to routinizing everything it does and delivering results through others. The Chief Executive should no longer be needed as the head of estimating, business development, operations, human resources, or finance at this stage. Instead, the Chief Executive should be able to supervise a team of other executives to deliver ideal business results.
The third stage is the exit. Companies in this stage must now reduce reliance on key people and prove an ability to thrive based on company processes and systems virtually alone. The focus of a business in the exit stage must be optimizing profitability, business system automation, clear succession planning, and everything else that can drive up business valuation. The Chief Executive should have someone else supervising their team of executives if they want an ideal exit from the business.
Matching the Leader to the Stage
In the growth stage, the Chief Executive must confront and overcome their weaknesses. If you’re a visionary-type that doesn’t much enjoy details and disciplined execution...too bad. You’re going to need to figure it out. There’s not enough money in the business for you to completely offload any aspect of leadership! That doesn’t mean you have to wear every hat, as you should be looking to hire to offset some of your weaknesses as quickly as possible, but you absolutely cannot absolve yourself of things you’re not good at. You must work through your weaknesses, which means longer hours and withstanding pain, to get through the growth stage. From what I’ve seen, I believe 50% of contractors are perpetually stuck in the growth stage because leadership is unwilling to grind through it.
In the scale stage, the Chief Executive should play to their strengths and aggressively seek to offload responsibilities prioritized in order of their own weaknesses. If you are a technical expert, bring in big-picture thinkers to lead business development efforts as your first order of business. By the end of the scale stage, the Chief Executive should have offloaded each of their departmental oversight responsibilities, and for the technical expert, the final one may have been estimating, for example.
In the exit stage, the Chief Executive must replace themselves at the top of the organization. Whether you plan to pass the business down to the next generation or you’re looking to attract an outside investor, you must diminish your role to the greatest extent possible. When you’ve become completely unnecessary to business operations, you’ve done it.
And we’re back to self-awareness and humility. Can you honestly assess what stage of business you’re in? Will you acknowledge your own weaknesses, and both work harder to overcome them in the growth stage and hire well to offload them to others in the scale stage? Finally, can your ego handle the idea of becoming unnecessary to your own business so you can hand the reigns over to others?
We help construction Chief Executives in every stage of their business to assess the right steps. If we’re not already, let’s talk about where you are and what you need to do now to experience success.
The Spark Notes:
In the construction leadership landscape, true success is rooted in self-awareness and humility, transcending mere technical skills or visionary capabilities.
The business lifecycle encompasses three distinct stages: growth, which demands hands-on problem-solving; scale, which focuses on delegation and systematization; and exit, which aims for a smooth leadership transition.
During the growth phase, leaders must directly confront their weaknesses, enduring the necessary trials to establish the company's foundation.
As the company progresses to the scale and exit phases, leaders should strategically leverage their strengths, delegate areas of weakness, and ultimately prepare to step back, ensuring the company's longevity and legacy.
