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For a business to advance from stage 1 to stage 2, the business requires that the role of the Oracle be supported or replaced by a business development person. I refer to this new leader as the “General.” In our McDonald’s example from a previous post, it was a guy by the name of Ray Kroc.
Ray Kroc bought the business from the McDonald brothers and took McDonald’s from stage 1 to stage 2. This cycle continues to repeat itself over and over for any business that continues to grow and evolve past basic survival mode.
Thomas Edison was an Oracle. By himself, Edison invented many things. However, he was not capable of growing his inventions into a really profitable business. Edison didn’t have the desire or skills to take his ideas beyond a stage 1 business and was always looking for funds to continue his research. It took the likes of JP Morgan, a General, to take Edison’s ideas and turn them into the company we know today as GE.
Sometimes the Oracle acquires the skills of the General, such as with the case of Henry Ford and JD Rockefeller. However, this is less common in more modern times.
Frequently, the Oracle and General get paired up early in a company’s lifecycle based on the perceived strength and weaknesses of the founders. For example, Stephen Wozniak was the Oracle and Steve Jobs was the General for Apple. Bill Hewlett was the Oracle and David Packard was the General for the Hewlett-Packard Company. Paul Allen was the Oracle and Bill Gates was the General for Microsoft. You get the picture.
For many stage 1 businesses, the Oracle sells either all or most of their business after they reach the limit of their skills. The business is then acquired by the General.
For the General, expansion is the name of the game. For the General, their mission is clear and urgent. They like being in charge and making decisions. The General is often accused of being authoritarian and not consulting others before making a decision. They have little patience for planning and administrative tasks. The business General, like their military counterpart, have undying loyalty from their followers based on their “take no prisoners” attitude.
However, while Generals are charismatic leaders, they are so focused on moving forward there is no time for any kind of succession planning. When business Generals die or move on, their businesses often collapse without their leadership. No one is there to pick up the flag after they are gone.
Generals are motivated by a single goal and hard-wired to excel during periods of crisis. However, when the objective is achieved, they fail to recognize or rise to subsequent challenges. At this point, stage 2 has often gone as far as it can go and the General needs to be replaced to move to stage 3.
Are you a General of a stage 2 company?
Next post in the Series: Stage 3: The Athletes and Performers of Business