15/07/2024

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Diagnosing Your Business Leader: Builder, Decorator, Remodeler, Or Realtor?

Diagnosing Your Business Leader: Builder, Decorator, Remodeler, Or Realtor?

Diagnosing Your Business Leader: Builder, Decorator, Remodeler, Or Realtor?

by Dan Adams, founder of The AIM Institute and author of “Business Builders: How to Become an Admired & Trusted Corporate Leader

I’m on a quest to reinvigorate corporate America. My goal? To put more Builders at the top — or, at least, to inspire those already at the top to behave more like the leaders who brought them to the party.

Your company — and every company you can think of — was founded by a Builder. And while the prevailing belief seems to be that it’s okay for mature companies to ‘move on’ and be led by non-Builders, this is not true. When those at the top reject the Builder mindset, they start making errors that slow their company’s growth. Truly, in some cases, it would be better if such leaders sat at home and did nothing.

There are two conflicting leadership “types”: Builders and Decorators. Builders drive profitable, sustainable growth by delivering differentiated value to customers, as they brush aside business fads, short-term distractions, and financial gymnastics. Decorators focus on looking good to investors, quarter after quarter after quarter.

What about your own business leader? Does he or she think like a Builder? Here’s a brief profile of each type that will help you determine who’s in charge of your business.

Builders.

These leaders have a passion for organic growth. They focus on strategic markets and voice-of-customer research. They have a strong R&D project portfolio. They think in years, not quarters, because they know that’s what it takes for new products to deliver needle-moving revenue and for employee training to deliver serious change. For a Builder, nothing matches the satisfaction of understanding what customers want, delivering meaningful innovation, and watching the sales roll in.

Builders are proud of their work and inspire loyalty in their employees. It’s fun and exciting to work for a Builder, because they value people’s contributions and give them a chance to stretch themselves and develop their skills.

Decorators.

To these leaders, curb appeal is everything. They’re focused on how the place looks, and life is all about the quarterly financial report. But their work becomes an unending cycle. After each financial reporting period, they begin the same activities all over again, and in the end, their business does not change. (It’s like a business version of the movie Groundhog Day!)

Decorators think they’re doing meaningful work, but they aren’t really making a difference. The energy they put into this quarter’s financial report is squandered energy. Next year, no one will even remember that quarter that seemed so important at the time.

Decorators are near-time-horizon types of leaders, thinking in months or quarters. “If financial results were published every fortnight, their time horizon would be fortnights. Where a Builder would ask, ‘How can we grow this business?’ a Decorator would ask, ‘What costs can we cut?’ But while a Builder keeps building, at some point, a Decorator has nothing left to cut.

There’s nothing wrong with Decorating in itself: Why not look good to investors? The problem arises when Decorating occurs at the expense of Building. And it very often does, as many short-term actions degrade long-term profitable growth.

Remodelers.

These leaders are forever fixing up the place. They focus on improving quality, boosting productivity, eliminating wasteful costs, etc. These are commendable endeavors, but if nothing new is built, the company reaps diminishing returns.

Imagine you’ve been working on quality improvements. Good! But what will you do after you get to zero defects? Perhaps you’re driving down labor costs. You’ve finally reached full automation with a lights-out factory. Your productivity is fantastic, but what will you do next? You’ve reached diminishing returns.

Remodeling is good, but Remodeling without Building is a race to the bottom. It ends in commoditization. Your competitors eventually match your quality or productivity with similar products, and then the price wars begin. Bottom line: Keep Remodeling, but never stop Building.

Realtors.

These leaders love to buy and sell, reaping their rewards during mergers and acquisitions. Realtors are rewarded when the hard work of others’ hands is transferred into their hands. Realtors mostly redistribute wealth that others have created.

Research shows 70–90 percent of acquisitions fail. But some can be helpful, especially when acquiring a competency that helps your business change its growth trajectory. When you have a Builder at the helm, the acquired business can become a Building block in their Building program. With Realtors… not so much.

The problem with many Realtors is that they don’t know how to grow what they acquire. Their acquisitions become enormous distractions from the Builder’s work needed for organic growth. As a result, many Realtors are just building a house of cards.

Builders, Remodelers, Decorators, and Realtors all have their purpose, but where they fulfill that purpose makes all the difference.

If you have anyone other than a committed Builder leading your business, sooner or later you’re going to be in trouble. There’s room for the other roles discussed here… but they should be in supporting roles. Now is the time for the business leader to take a hard look at his or her mindset and beliefs about company growth — or for the company itself to rethink who is steering the ship.

 

*excerpted from Business Builders: How to Become an Admired & Trusted Corporate Leader (The AIM Institute, 2023, ISBN: 979-8-854-42618-3)

 

Dan Adams

Dan Adams is the founder of The AIM Institute and author of “Business Builders: How to Become an Admired & Trusted Corporate Leader“. He is a chemical engineer with a listing in the National Inventors Hall of Fame. Dan has trained tens of thousands of B2B professionals globally in the front end of innovation and works with senior executives on driving profitable, sustainable growth.