GTT Featuring Ron Carucci

The Challenges in Leadership to Scale Growth with Ron Carucci

You have a culture that is either intentional or not. When you focus on creating a culture, you have to look at the long-term benefits. You have to let go of the excuses of being too busy and Every role in a company has its challenges. Leaders have a unique set of challenges when they focus on how to scale growth. Leadership requires clarity in the face of uncertainty. Leading others takes confidence at the same time as you acknowledge your fear. Today’s guest is Ron Carucci, Managing Partner of Navalent. Ron writes about his work for Harvard Business Review (HBR) about leadership transformation. The drive to scale growth is not new, but at this time, it requires you to face unique difficulties in leadership. Join me for today’s interview on how to scale growth by facing leadership challenges.

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Ron Carucci: The Transcript

Target Audience:Ron Carucci is a Contributor Leadership Strategy. ABOUT. I am co-founder and managing partner at Navalent, working with CEOs and executives pursuing transformational change for their organizations, leaders, and industries.

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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

Ron Carucci
To many leaders struggle to do to realize that sometimes leadership means the ability to discipline people in a way they can absorb. And they don’t they want to purchase well, too, they want to purchase happiness. And so they go out way too many YES’S and dilute the resources of their innovation rather than the hardest word for a leader to say is No. and narrow the focus of the position, these leaders could construct really hard choices that knew what data what voices to include, and what part of their intuition or experience to blend into a great choice and they could do it consistently and transparently so people could decode.

Intro [0:36]
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs, the fastest-growing privately held companies. I am the host, my name is Jean hammock. I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow?

Gene Hammett [0:53]
Your job as a leader is to scale growth when you think about creating all the strategies The people, it’s all to scale growth, right? And growth may not mean financial growth. Most the time it does. Maybe it means growth in your side your market share, maybe it means penetration inside of certain accounts. When you think about leadership, you’ve got to scale growth. That’s your job. Today we’re going to have a special interview with Ron Carucci. He is with Navigant and you share some of the research behind thousands of leaders and what does it take to scale growth. When you think about what types of skills are necessary, we go through the four main aspects of his research, we look at them. And the surprising thing is, if you have three, you’re still as likely to fail as if you just had one. You may not see the correlation there. But inside the interview, we explain exactly what we mean by that. And Ron shares his research specifically and why all four necessary for you to thrive as a leader to scale growth. Now here’s the interview with Ron.

Commercial [2:03]
Before we dive into the interview, I wanted to remind you that you can actually get a tool that I’ve been working with clients with for the last couple of years. I’ve refined this tool this gone through several iterations. Now we have it completely automated, you can actually go online and fill out the leadership quiz. To get the leadership quiz. Just go to theleadershipquiz.com that’s pretty easy right? theleadershipquiz.com what you will get when you do that is you will answer a few questions. You will see where you rate based on the core principles of fast growth companies. If you’re ready to grow your company are you want to see where you are? Then make sure you go to theleadershipquiz.com inside it you will get insight to where you are, understand where you want to improve. And you will get them mapped into the 10 areas that are most specific to fast growth companies. Again, go to theleadershipquiz.com and you can get that right now.

Gene Hammett [2:56]
Ron, how are you?

Ron Carucci [2:57]
Gene, Great, good to be with you.

Gene Hammett [3:00]
Excited to talk to you about leadership from a different perspective today. I know there are some challenges that a lot of people face as leaders when they’re trying to scale their companies. But before we jump into that, tell us a little bit about Navalent.

Ron Carucci [3:14]
So we’re a boutique consulting firm, we’ve been around for about 15 years, we sort of spend our days roaming the hallways of organizations, alongside CEOs or division presidents or people who are founders. And they’ve gotten their organizations to a certain place and now find themselves at a T intersection or in a ditch or some opportunity seems out of their reach. And there’s something more transformative required than just the normal routine of executing business plans. And our job is to help construct that journey with them to help them realize the transformational needs of getting from here to there. A lot of times we walk into organizations and it’s the classic case of 100 million dollars. Company trapped in the body of a $20 million organization. The organization grew but it didn’t scale. And now it’s like a teenage boy and his dad suit. You know, he’s just sort of there. The sleeves are too long, the classic, you know, golden retriever puppy hasn’t quite gotten to his paws yet. And you can hear the seams of the organization ripping, you can hear the place stretched beyond capacity. But for many founders, that looks exciting. It’s the energy of a startup. And for many of the days, they struggle to realize it’s time to do something different.

Gene Hammett [4:35]
One of the things we talked about last week was the new models of leadership. And you have done some research on this. You’re working with it in the trenches with different companies, what are those new models of leadership that we should be aware of?

Ron Carucci [4:49]
Well, so we did a 10-year longitudinal study with more than 2700 leaders to understand why is it that so many leaders as they rise up in their careers as they take on broader positions of leadership as they become CEOs, that more than half of them fail in the first 18 months. And we wanted to understand why that was. So we, you know, went back 10 years with and looked at 2700 interviews, we isolated 100 executives in mid-ascent sort of on their way to the pinnacle roles, to see if we could find out what are the landmines that are getting in their way. And we discovered lots of them. And in our book rising to power, we documented every stone we could on the turn to say here is the treacherous journey of an ascent. And then the great news was that in the research, we were also able to isolate, what are the other half doing, if they’re sticking the landing and thriving when they get to the top? How are they doing it? And we were able to isolate the patterns of behavior and leadership that those folks are succeeding with.

Gene Hammett [5:53]
When you would love to go a little bit deeper with that as I’ve seen some new approaches to leadership. And one of them specifically is kind of a military approach was based on authority. And they direct a lot more than I see other types of leaders. And that’s more of a style issue. When do you think about leaders like what are the different models that you’re seeing specifically?

Ron Carucci [6:17]
So we found so you know, being very declarative being dictatorial or authoritarian, you know, I think there’s a lot of allergy to that kind of leadership now that the flip side is it doesn’t mean you don’t have to be directive, directive and clear as a leader. autocratic is a different issue. Right? So we have the four patterns we found in our executives that actually set themselves apart successfully.

Ron Carucci [6:42]
The first was context. So these leaders could read tea leaves, they were curious, they understood. We wanted to understand why things were the way they were. They looked at competitive disruptions coming their way. They looked at cultural things that were odd about evolution, and they recognize that they had to adapt that they weren’t They’re just to impose an answer or to, you know, affect change if they had to set the context had as much to change in them as they had to change in it. So it was breath. So when you get to the top of an organization, you know, you, you see the fragmentation, you see the silos in very different ways, suddenly their modes apart. And if you grew up in finance, you no longer have the luxury of seeing the world economically. If you grew up in marketing, you no longer have the luxury of seeing the world through consumers. If you grew up in operations, you no longer have the luxury of seeing the world through process or cost. You now have to see how all the pieces fit together. So gretz these are the leaders that could stitch the seams that could make the parts of the hole into some of the parts into a hole and create cohesion out of the fragmentation.

Ron Carucci [7:44]
The third was the choice. So these are the leaders who could make our choices many leaders struggle to do to realize that sometimes leadership means the ability to discipline people at a weight they can absorb. And they don’t want to purchase loyalty they want to purchase Just happiness. And so they go out way too many yeses. And dilute the resources of the organization rather than the hardest word for a leader to learn to say is No. and narrow the focus of their tradition, these leaders could construct really hard choices. They knew what data, what voices to include, and what part of their intuition or experience to blend into a great choice. And they could do it consistently and transparently so people could decode them.

Ron Carucci [8:25]
And the last one, not surprisingly, was a connection. These leaders had amazing relationships with their boards, their bosses, their peers that directs these. These are the leader’s everybody wanted to be around. Every company has them. Nobody wants to work for these people. And the interesting thing about them was the way they prioritize their stakeholders was not based on who they could get something from or who they needed in their network to succeed. Their priority stakeholders were who could help people be successful? Who whose agendas could they contribute to? They were on the hunt to make other people more successful. And that’s what made them attractive. So, Brett context choice connection, the hardest part about the research gene was that it was all for the success group did all for a well, if you did three of the four, well, you were in the failure group. So we get and we did 99 different regression analyses to sort of making sure that if we had to say it was all four, we could prove it. And so the great news is they’re all learnable. You can go acquire those capabilities, and learn them, of course, your career, the issue, the challenges. Don’t wait until your first vice president role. Don’t wait till you found your first company to start learning them.

Gene Hammett [9:35]
So what I’m hearing behind that is our first-time leaders because it’s a real struggle within this audience that I’ve heard back from them through my research is how do we develop the first level of leaders like that frontline leadership is such an important piece to growing and it is about talent, but it’s also about how do you truly lead people I love these four And I want to go just a little bit deeper with this, you know, the regression analysis. I mean, I took a look at a lot of the statistics and probability in the inside of my engineering degree 20 years ago. But what does that really tell us? I mean, other than you got to have all four.

Ron Carucci [10:18]
So I wanted to, I didn’t want to say that I wanted to say, Well, can we have two of the four and then maybe learn the other two along the way. But we wanted to understand, you know, if half or 60% of these leaders are flailing and swimming out in the first few months, why? And each of those dimensions was the cause of failure. It’s right. So you could still have three of them and do them well, but one of them was enough of a significant outage that would cause you to fail. And each of them has theirs has a component of failure. So for example, the context of the relationship causes you to fail faster, like in the first six months, meaning you missed the tea leaves, you didn’t read the script, the strategic requirements, you had assumptions you didn’t test.

Ron Carucci [11:00]
Connection means you lie and keep going, you needed to succeed. And other stakeholder groups, peers, and direct reports were the two that could cause you to fail fastest. choice and breath were slower fails because ordinations by their nature are fragmented, there are silos. governing systems organizations are often clumsy and decision making is often convoluted. So if you, if you suck at one of those, you might just blend in a little longer before it comes back to bite you. But anyone of them is they’re so critical that any one of them could cause you to do rail. For founders and CEOs. Context is a major one whenever I walk into a company, to founder CEOs and I ask them, tell me your strategy. Tell me why you’re here. I get Gene, I get so many counterfeits. I get the mission statement. I get the vision statement. I get the purpose statement. I get the annual operating plan. I get the product photos. I get Costco call. That’s the strategy.

Ron Carucci [11:56]
We try to have to gear up for new lines to meet their demands. And I say to them, that’s all very interesting that does not tell me who you are. Tell me why a customer you that you want to serve, would pick you over the five other people to do what you do within five miles of here. What makes you special? What makes you unique? What makes you better than the other options? And until you can answer that question, you can’t tell me who you’re saying no to you can’t tell me what customers you don’t want to serve. And when you can’t tell me that you have no strategy. You may have aspirations, you may have goals, you may have things you want to accomplish, you may have the money you want to make, but you have no identity in the marketplace to distinguish yourself. And that is the fundamental of scalability. Because no matter how small you are, you could be 10 million 15 million, even at that size. Strategy work isn’t just for big companies, picking a swim lane where you want to win and sticking to that swim lane, even when other revenue opportunities come your way, is the most fundamental aspect of scaling a company and most entrepreneurs don’t Want to say no?

Commercial [13:01]
Let’s make a real distinction here around what context is, I wanted to jump in and add a little commentary because a lot of people confuse the word content and context. Content is what we’re creating. For example, this interview is a piece of content. The context around it is what’s most important. It is to be a better leader is to see insight to gain information and wisdom around how you can show up to improve and scale your own growth. And that’s just an example. How does that relate to your business where your job is to see context across data across departments across everything Ron says it well to inside this interview is the ability to read the tea leaves. When you have context, as a leader, you are able to see future things that the team must do and hopefully align them around that in a very predictable consistent way. Context is very important. Back to the interview.

Gene Hammett [14:01]
There’s a huge danger if you look at like a company like Amazon, and you saw how big they are now, and you’re like, Oh, well, they have all these revenue models, right? All these different business units and all these things, but you got to remember, they started in books.

Ron Carucci [14:18]
And it wasn’t even it was just textbooks. It wasn’t even all books. And so, um, you and they stuck to it. And you know, that Jeff has made their culture you know, every day is day one. That’s a big reason why they’re so agile is you’ve got to earn it every day. And you and you can’t emulate Amazon right beat be who you’re meant to be and be the best version of that but decide, and don’t just do it because you have a whim many, many entrepreneurs think I’ve got a great idea. You know, I have an answer looking for a question that nobody’s asking. And, and so you know, you be sure you have something somebody wants to pay for. Be sure.

Ron Carucci [14:58]
Don’t just fall in love with your idea or your product or your design or your code, make sure there’s somebody else that’s going to be as in love with it for the same reasons you want them to be, and that they’re going to pay you for it. Because until then you’re just sort of its pie in the sky, you’re just, you’re just you’re running a whim, you were the guy that didn’t want to work for them anymore. So I’ll go be my own boss, I’ll, you know, start selling my garage, and I’ll be the next Jeff Bezos. And, you know, if I hear one more entrepreneur, say, I’m going to be the Uber of you know, it’s you. This is not sure you hear all the great passion stories, the curled up on the floor, and in my bathroom, crying for nights suffering, get my business launched, and then you hit these glory stories. That’s not real life. And that’s not really how it works. And so if you want to scale a business, if you want to go from being a founder to an executive, to go from being a startup to a grown-up, there is it’s hard, predictable work. It’s not magic. There’s no pixie dust you sprinkle on it. It will do take work?

Gene Hammett [16:01]
Let’s go a little bit deeper because there’s something we talked about last week in the pre-interview that I want to highlight here. I’ve never heard this before, but I’ve seen it. So you’ve put words to it, you put research to it, but it’s the difference between scalable structures and bolt-on bodies. I can imagine what the bolt-on bodies would give us the start thread. What is this bolt-on body thing?

Ron Carucci [16:23]
Well, you may think about your clients, how many clients have you heard celebrate the notion of we went from 20 employees to 100 employees in six months. Okay, what are the other 80 doing? What I mean, you just know they went on a hiring frenzy. They got the series money they got you to know, the angel investor, give them a check what you whatever their funding model is, and they just want to bring in bodies. And those bodies are running around. Most of them have no idea what they’re doing. They were told to that cubicle, write that code, call those customers to answer those phones. But if you went around and asked any of them, why are you here? What are you contributing to? Most of them are that you have 100 different answers. And so you just can’t both on growth.

Ron Carucci [17:08]
Scaling means you understand that not all of the work in your enterprise is created equally. There are different kinds of work. And if you don’t understand who you are strategical, you know, what are the most important differentiators that you’re trying to bet the farm on and set yourself apart with, then you’re going to see all the work is the same, but you have three types of work. You have competitive work. That’s the work that if you put $1 into that work, $5 comes in the door. This is the work that makes you special. It’s the work it’s the reason customers are calling you. It’s what you’re going to become known for. And it’s about 15% of the work in your whole portfolio work.

Ron Carucci [17:45]
There’s competitive enabling work, there’s the work that directly supports that critical work. So if you’re in analytics as a field, you know, your your your your intelligence, gathering mechanisms are your competitive work. Your and your analysts. So your competitive work, your technology is your competitive anymore. Right? That’s another 15% of your work. The rest of the work about 50 to 60% of it is necessary, keeps the lights on keeps you out of jail keeps you compliant. But if you don’t get paid any more money for doing it like everybody else, the problem is we mixed the competitive and Esterbrook all together, it all gets diluted. And people are running around with their hair on fire. And when they’re making trade-offs every day, because somebody’s screaming at them.

Ron Carucci [18:28]
The necessary work always wins because it’s always nearer term. It’s always shutter priority. It feels like it’s productive. You love checking the boxes off, competitive and competitive nearly orcas a little bit longer-term work. You don’t measure it in days and weeks, measured in weeks and months and maybe even years. So unless you protect that work and separate it because you have to do competitive and enabling work better than anybody else. That’s where you put your money. That’s where you get talent. That’s where you hire people. You have to do the necessary work as efficiently and cheaply as possible maximum efficiency. least cost automate it, outsource it whenever you got to do and keep them apart, but if you don’t know which is which, and it all looks the same to you, then you’re just going to put a sea of bodies on it and they’re all going to chase whatever activities, someone screaming at them for.

Gene Hammett [19:14]
When you talk about the power of executive leadership compared to a hub and spoke leadership, what does that mean in your world?

Ron Carucci [19:24]
So many, you know, many executives, as organizations grow around them, their identity becomes very linked, right when you’re a founder, you know, if you can separate out your identity from your idea from the organization you’ve built, then you are pathways lead to you the organization becomes unnecessarily and excessively dependent on you. So you’re like a hub and a bunch of spokes, all decision pathways or resource allocation choices, all strategic decisions on the product decisions. You’re involved way too much. We all heard the Steve Jobs story.

Ron Carucci [19:56]
We’ve all heard all the stories about the leaders who were involved in details and stayed on Forever and some of them will tell you in hindsight they wish they hadn’t. So part of building a scalable enterprise, even at you, from wherever you are, is making sure the origin can don’t rely solely on you. So executive leadership means you’re creating cohesion means you’re creating leadership as a capability, meaning other people are leaving beside you. Breath, context, choice, and connection we talked about before are permeating down the organization, to the question you asked before change your first-line supervisors know as soon as you have new layers of leadership, they’re all thinking the same way. They’re all aligned.

Ron Carucci [20:35]
One of the most painful realities of most startup entrepreneurs is when they grow, they hire their friends. They’re friends with them, but their friends aren’t getting more talented. And so when it comes time to get money, the VCs are saying, Yeah, these Yahoo’s aren’t going with you. We’re going to layer over them and bring in real professional management. And then you got to fire your friends or demote them because you didn’t develop them. You made everything dependent on you. And now your funders are saying you need to install this are over them. People who can actually grow a business and you don’t like any of them they give you and then the whole thing falls apart. So you have to separate yourself from being in mesh with what you created enough to recognize that if you wanted to grow bigger, it has to grow way beyond you.

Commercial [21:17]
Let’s hold on for a second. Ron just said leadership as a capability. When you develop leadership as a capability. It’s putting the right training and support to develop your experts, the talented people, on your staff on your team, whatever you call them, and developing that leadership. When you have people that can lead others do uncertain times. When you have people that have a common understanding of how to engage and align people through their words through vision through story. All of those things become into a very critical part of the company success. I really believe this. You don’t want to create a bunch of more managers In a time like this, you want to create leaders. Are you doing enough to create leaders, part of what we do here at core elevation, which is an legal name of my company, but what do I do as an executive coach is develop leaders so that they can develop the leaders inside their organizations. If you have any questions about that, make sure you reach out to me, [email protected] back to the interview.

Gene Hammett [22:23]
I see an issue a lot, especially until they get to the point where they really built out a highly functioning executive leadership team.

Ron Carucci [22:32]
And they have to do that much quicker than most of them can do. Most of them think that’s not that’s not out yet.

Gene Hammett [22:38]
Yeah. I you know, I’m really impressed when I see organizations that are less than 10 people and they’re like, we want to put a really high emphasis on people. Which is and I asked the questions like, have you ever been told that that’s crazy because of the stage you’re in a company? Absolutely. But when they get to a point where they’ve got 100 employees, That intention around people was so important for their growth and the continued growth of the company.

Ron Carucci [23:06]
I hear a lot of startup leaders, even in Silicon Valley in the tech in the tech world, but they all say, we culture people like everything. And I think when they say they really believe it, and yeah, you have lots of VCs now who are putting coaching dollars behind their funders, putting a percent in to help, you know, develop talent, but when you actually look at the practices of the organization, when you actually look at hiring, and they all think about we give you a free lunch, we put a foosball table out there, you know, send you home early pay for your childcare that’s people-oriented. And again, it’s not that’s not what people really want. I mean, those are great. But if you to be people-centric, to be culturally centric, and not be customer-centric, right? It’s not either-or, you can have both.

Ron Carucci [23:53]
I mean, I think you mentioned last week that you sometimes ask your clients, which is more important people or customers and it’s both of them. Wouldn’t, and it’s not you can’t trade them off. But what it means to put people first is a very specific set of, of how you design your organization, how you design governance, how you design leadership, how you who gets to allocate resources, who gets to make what say, how you manage conflict. How do you deal with making trade-offs, I was saying, we’re going to do this, we’re not gonna do that. And how you navigate those moments. That’s what tells me whether or not you will be buying people for lunch every day.

Gene Hammett [24:30]
Well, perfect. Right. I really appreciate your being here on the podcast, hearing your research, and your insights around leadership and what common mistakes keep coming up. I love the fact that his research base maybe it’s because I believe in my own research and how deep I’ve gone with studying fast-growth companies and their leaders and culture. So thanks for being here on the podcast.

Ron Carucci [24:52]
Gene, it was a pleasure. Thanks for having me.

Gene Hammett [24:54]
I love interviewing people who have a deep sense of their own research they have looked at the pattern And can share with us exactly what we need to know. So that we can make some decisions for ourselves. If you know you’re at a defining moment inside your leadership, you’re an inflection point, you know that you’ve got to step up to lead in a new way.

Gene Hammett [25:15]
Then I’d love to talk to you about your business and about what’s going on right now. If you’re looking to scale growth, that’s my specialty. And I’d love to talk to you about how you must show up as a leader and some of the things you must let go of, in order to develop the leaders that you really need and to become the leader that everyone deserves. Make sure you reach out to me [email protected], and as always lead with courage. We’ll see you next time.

 

Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

 

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