It is a rare INC. 500 company that has not outgrown some of its original managers
JIM LITTLE AND JACK Littley don't know each other. Nonetheless, they share similar good fortunes. Each man still holds a job in a company that he helped to launch several years ago. Maybe it's not the job he dreamed of, or even the job he expected to have. But both remain important, contributing members of organizations whose rapid growth, under other circumstances, might easily have left them behind.
Every expanding firm encounters the issue: what to do about first-generation employees who were instrumental in getting the company off the ground, who were important assets when the business was small and everybody was a doer. Now, in the more sophisticated environment of a larger organization, they are likely to be miscast. They wonder, sometimes aloud and unhappily, what happened to the early days when people worked in their shirt sleeves and everyone pulled together. They chafe at being excluded from all the important decisions. With all the politics, the memos, the procedures, work's no longer fun. Worse, the guy who used to be a friend, someone who worked right alongside them, has become aloof, too busy, maybe too self-important being a chief executive to be a buddy anymore.
"I've concluded that the problem comes with the territory," says Frank Zenie, founder and CEO of Zymark Corp. (#15), which develops and markets automation equipment for chemical laboratories. After all, he says, you just can't start a company with a full complement of experienced, sophisticated managers. And start-ups being what they are, even if you could afford them, they would probably botch the job.
Getting through a successful start-up requires people like Jim Little. Zenie hired him just after start-up to design and build the sales and marketing program that Zymark would need for its innovative robotic products. "His knowledge in this area is outstanding," Zenie says of Little. "His ability to manage it is not."
When Jack Littley and Ed Bersoff were starting BTG Inc. (#150), Littley's job was to manage all the important computer-engineering projects for the company. Back then Littley fantasized about one day being the chief operating officer of BTG, or maybe even the president. As things turned out, Littley now heads BTG's engineering-services division, working for a newly hired director of operations. A stint as director of new-business development convinced him and others that sales and marketing were just not his thing.
"Being out on my own, without a staff, gave me an uncomfortable feeling," Littley says. "My strengths are in working with a customer." Now he's found a job in a growing organization that gives him comfort and satisfaction.
What sets these two INC. 500 companies apart is not that they've found a way around this problem of company growth outpacing individual development, but that they have found a way through it -- one that doesn't involve destroying careers, shattering friendships, or hobbling the business. The secret is simple: Littley, Little, and their respective CEOs were willing to acknowledge that growth is apt to bring changing roles and changing responsibilities within the management team. They throught about these problems prospectively, and talked about them openly, before the reality began to hit.
"I put myself in a position to have these problems by hiring people I knew would have to have new roles in the company when it grew," Zenie says. He and Little, for example, talked about the pitfalls of Little taking the top sales and marketing job. But, according to Zenie, "we both decided to run the risk and let the future unfold."
Happily, it unfolded in an environment in which people's value to Zymark -- and thus their own self-esteem -- is a function not of what they do but of how well they do it. "If you're good at something," Zenie says, "you ought to be put in a place where your weaknesses are not a problem."
Little's management weaknesses aren't a problem in his new corporate-development job. It wasn't exactly that he wanted to give up running sales and marketing -- that decision came from Zenie. "But since we'd talked about the problem before," Little says, "it was no surprise." And if it was gutwrenching at the time, the damage wasn't permanent. Little says that he was comforted by knowing that he would "play a senior role in keeping the company going."
At BTG, Littley, too, claims he's never feared for his status at the company, even though he now works for an outsider. "I don't have a problem with that relationship. I still wear badge number three," he points out. "Back when we" -- note the "we" -- "first made the decision to hire someone to take charge of operations, it became easy for me to say that I want to work myself into a job where I can have fun, where I can have influence, and where I can enjoy coming to work, wherever it is in the organization."
Adds Ed Bersoff, the CEO: "'Face' is the major issue, although they wouldn't put it that way."
Exactly how a CEO cultivates an environment where the face and feelings of his original collaborators are respected and preserved is largely a matter of the CEO's style and attitude. Whatever technique works is the right one.
Bersoff, for one, uses equity participation to show loyalty to his key managers. The stock allows him to point out to people whose skills no longer fit their jobs that their long-term financial well-being is more a function of how well the company does than the position they occupy within it. And it gives longtime employees the standing to talk to the CEO about almost any important corporate decision.
"These people are the corporate memory," says Bersoff. "They know the corporate philosophy. You understand them as people and they understand you. Their trust and loyalty -- it's hard to replace in a new person."
That -- replacing the old person with someone new -- is the classic solution to the problem of having jobs that change and people who do not. But the classic solution misses a point, says Zenie. "Successful people got there because they did something well. Just ask yourself, 'What things is this person really good at?' Then design a role from which he can give back to the company more than what it costs."
And here's where growth -- which created this problem in the first place -- comes to the rescue. It may be axiomatic, as Bersoff points out, that "the faster the growth, the more acute the problem becomes." But an important corollary is that the greater the rate of company expansion, the easier it is to find valuable new jobs for people who were once important to the company's success and who, given a CEO with imagination and sensitivity, can usually remain so.