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INC.: You're saying that problems are here to stay.
ADIZES: Absolutely. When you stop having problems is when you stop changing, and that happens only when you are dead. Change causes problems, and problems require solutions. So you go out and solve those problems, and guess what? The solutions cause more change and more problems. All you've done is create the next generation of problems.
And the more successful you are in solving today's problems, the more difficult will be the problems you face tomorrow. My New Year's card to clients says, "I wish you bigger problems next year than this year . . . that you can handle!" Because you're as big as the problems you can contend with. Some companies cannot contend with big problems, so what happens? They stay small.
INC.: That's not a very comforting thought to someone who is feeling overwhelmed by the problems of a small business.
ADIZES: The question is, What kind of problems are overwhelming you? Are they the normal problems a company has at your stage of development? If so, don't worry. You will outgrow them. They are like childhood diseases -- unpleasant, but you must have them to build up your immunities. If you have abnormal problems, then you will need help to get over them.
INC.: How can you tell the difference?
ADIZES: You have to understand the patterns. You have to look at where you are in the corporate life cycle. The point of my work is to show that companies change according to a predictable pattern, and there is a predictable pattern to the problems they encounter along the way. The specifics will vary from company to company, and the stages overlap, but the patterns are very clear. If you know what they are, you can identify the problems that are abnormal and require special attention. This is the difference between being smart and being wise. Smart people learn from experience; wise people learn from the experience of others. You should try to be wise.
INC.: Let's take the example of a company that's just getting started. What are the normal problems, and what are the abnormal ones?
ADIZES: You're talking about a company in infancy. That's really the second stage in the corporate life cycle. The first one is courtship, when you are dreaming about your business, talking about it to everyone you can find, making a lot of noise like an airplane getting ready to take off. What you are really doing is building commitment -- the commitment you are going to need when you actually take the risk and start the business.
Then you are in infancy, and there is no more time to dream or talk. Now is the time to do. If you have to have a meeting, you hold it in the elevator going down to the parking lot, and you make the decision by the time the doors open. You are working all the time. When someone in your company says, "I've been thinking . . .," you say, "Please don't think. What have you done for me lately? Tell me what you've sold." There is no time to think because you have no money. You are undercapitalized. So everything is do, do, do.
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INC.: Those sound like problems to me.
ADIZES: They are, but they are normal problems. Being undercapitalized is normal in infancy. What's abnormal is to be surprised by it -- to run out of cash and not know it. Normal is to have an autocratic, opinionated, strong-willed founder that nobody can argue with. Abnormal is to have a founder who delegates. Whom are you going to delegate to? People who are better than you? If they were better, they would not be working for you at that stage. Your company is too small. Look at the people you hired. Somebody who wandered into your office by mistake. A temporary you forgot to fire. Even if you're lucky enough to have good people, you can't delegate because you don't know what you're doing. Everything is trial and error in infancy. If you turn important responsibilities over to other people, they could make decisions that might destroy your company, and you will not even know it. Delegation at this stage is abdication. And it's a sign that something is wrong.
INC.: I thought the idea was to get everyone working together.
ADIZES: That comes later. An infant company needs a strong, opinionated leader to get it to the next stage, the go-go stage, when cash flow turns positive and the company really takes off. But you're raising a good point because what is normal behavior in one stage of the life cycle often becomes abnormal, and dangerous, later on.
INC.: How does strong, opinionated leadership become dangerous?
ADIZES: It begins in the go-go stage because the company is growing like crazy and it seems to be out of danger. Now this opinionated, strong-willed, nondelegating founder becomes arrogant as well. He thinks, I did it; I can do anything; let's go. He meets a developer on a plane, and suddenly he's in real estate. He goes to Hong Kong, and he gets into the trading business. He sees opportunities everywhere, and he's running the show. Put arrogance together with centralized management, and what you have is a Molotov cocktail.
INC.: Well, yes and no. We've seen companies go on like that for years and years without blowing up. Sometimes they become very large and successful.
ADIZES: Go-go can last for years, but eventually something is going to happen. Sooner or later the company is going to get involved in a product or a market it knows nothing about, and it will get hit over the head. The more arrogant you are, the bigger the hit will be. Because there is no structure in go-go, no clear responsibilities. The information doesn't flow very well. Cost accounting is a mess. The reward system is a patchwork of deals. Yes, the company is growing rapidly, but there is no accountability. It's a prescription for disaster.
