Declining Productivity or Bad Design?




It is common for companies to experience a productivity decline as they grow. We hear it consistently from our clients, regardless of industry, growth, or tenure. They find themselves having to do and spend more, only to get less. Faced with this confusing experience, most leaders see the natural next step as doubling down and working harder when, in fact, that is the worst thing they can do. Through our work with thousands of C-suite leaders, we’ve found that management and clarity, rather than work and executive leadership, are the key factors driving productivity. 

Of course, leadership remains essential. Leadership is about an organization’s vision—how well-articulated, meaningful, and animated it is. Leadership creates movements and long-term opportunities and is how a company traverses adversity. Yet the productivity engine of day-to-day work is powered by management, not C-suite leadership.

A significant shift in productivity occurs as companies expand to 150+ employees. Rather than the initial design of the leader of a small organization having relationships with all employees, earning and maintaining trust, executives start to seek leverage through a hierarchy. Executives put managers and managers of managers in place, forcing themselves to take on a different role in the 4D model without realizing it. 

Authentic design starts with the future and asking:

“Is this how things are supposed to work? What responsibilities, functions, and capabilities are necessary? What needs to be in place today for the future we’re planning to be possible?” 

These questions feel conceptual and low-priority in the context of massive workloads. When ignored, things start breaking. As more employees are hired, communication changes. It becomes harder to identify confusion.

In the past, if work wasn’t getting done as expected or managers weren’t getting the necessary results from their teams, you didn’t necessarily have to do the difficult and time-consuming work of examining who was doing what and whether it made sense; you could simply hire more people. In our current climate, cheap capital is no longer available to throw at management difficulties. It’s an existential problem for many organizations, and it’s breaking down at the role-design level. Hiring a manager, or a CFO, can pass for intentional role design. However, it isn’t, and this thinking can lead to hiring failures. 

Looking across years of data from working with CEOs and their executive teams, we’ve noticed two attributes appear in every case of a failed C-suite hire (defined as a hire that exited with less than 18 months of tenure):

  1. Poorly defined role
    CFO, CMO, CRO: we all have vague ideas of what these roles entail. Still, unless the responsibilities are clearly articulated and agreed on, odds are likely that the CEO isn’t entirely sure what this person will be asked to do. With that much role confusion at the outset, it’s unlikely that anyone would be able to join an organization and navigate it effectively. Even the most experienced hire can’t overcome the confusion of having a leader unsure of what their role is actually for.
  1. Overhired for the role
    Getting the most experienced person you can find may seem like an easy path to a successful hire, but the opposite can be true. Bringing a Chief Commercial Officer from a massive organization to a small startup with a fraction of the revenue can go poorly for the simple reason that the job itself will look drastically different (for more on this, read Context Over Skills). 

Identifying these attributes is one step to finding clarity, but what action does executive leadership need to take to solve a decline in productivity during expansion? 

  1. Recognizing that organizational failures exist primarily at the system level rather than due to individuals is the starting point to end confusion. 
  2. Examine your confusion. The best way to learn about what isn’t working, experiment to improve, and push your team toward growth starts with self-reflection. 
  3. Reckon with what is needed in your organization. As a CEO, you may have to admit that you don’t know the path forward and need help to find it. 
  4. Hire a coach. You can’t do it alone, and you aren’t expected to. Having a coach to fly by your side ensures you have the tools you need to be a successful and effective leader. 

Keep reading about confusion and how Talentism can set up your organization for success. 


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