Where Execution Breaks When a Company Grows

A company at $30 million rarely has an effort problem. Sales is selling, operations is building, finance closes the month, and inside each function people are working hard and most of the work gets done.

What slips is everything that has to pass from one function to another.

The quote goes out three days late because nobody was sure who was waiting on whom, the job gets scheduled before the deposit clears, and the customer hears two different answers in the same week. Every one of those failures happened in the space between two leaders, and in most growing companies that space belongs to the CEO.

Why the hub stops working

In a smaller company the owner is the hub and every function is a spoke, and often the owner is personally running several of those spokes. Communication flows in and out through one person, and that works, because one person can still hold the whole picture in their head.

Then the company grows, and the CEO promotes or hires functional leaders, sometimes people who are strong technically but have never led before. The org chart changes. The wiring doesn't. Information still flows up to the hub and back down, only now there are more spokes, more customers, and more fires burning at the same time.

There's a reason the bottleneck is at the top of the bottle.

The failure here is narrower than the CEO's decision volume, which is what makes it fixable. What we see is a leadership team that reports vertically and almost never works horizontally, where each leader has a clear line up to the CEO and almost none of them have a clear line across to each other. So when a decision sits between two functions, it doesn't get resolved between those two functions, it waits for a slot in the CEO's week.

Multiply that by the number of handoffs in your business and you have your execution problem.

The first thing that breaks is visibility

A handoff can't work if the two people on either side of it aren't looking at the same thing, and in most growing companies they aren't.

We hear a lot of praise for institutional knowledge, but when a company tells us that someone is invaluable because of everything they carry around in their head, what they're describing is a process they never built. Knowledge in one head is different from knowledge in the next head, so the work gets done one way when Dave does it and another way when Dave is on vacation. There's no systematic way to execute, because execution depends on the person.

That's what breaks the handoff. The person picking up the work can't see where the last person stopped, so they either redo it, guess, or ask you.

Processes should be written down, known by everyone who touches them, and used by everyone who touches them.

Even with a visible process, ownership stays with you

Write everything down and a CEO can still end up in the middle of it, because documenting the work and transferring ownership of the work are two different acts.

A CEO who came up through operations tends to hand off the method, and it sounds like this: here's what I need you to do, do it this way, this is how we've always done it. The person nods and does it, but what they don't do is own it.

Acceptance is not agreement. Acquiescence is not commitment. When the path was your idea the outcome stays your problem, and the person doing the work has no reason to fix it when it goes sideways, because they were only doing what they were told.

Hand off the outcome instead, make sure the person understands what that outcome actually is, then ask them how they'd get there. Their path may well be better than yours. Most of us have been running the same play for years because it worked at a smaller size, and that's exactly the play that has to change as the company scales.

Which is really a question about trust

There's a reason CEOs keep handing off the method, and it's that handing off the outcome requires believing the outcome will actually arrive.

Ask a leader why they're carrying something their team should own and the first answer is almost always that they're too busy. Push once, ask whether they have the right people to do it and why those people aren't making the decision, and the second answer is the real one: I don't know that I can trust them to get it done, or get it done on time, or get it done without mistakes.

That's worth separating carefully, because we confuse these two constantly. Do I trust this person is one question, and do I trust this person to deliver their accountability on time is a completely different question. Leaders answer the first and act on the second, then wonder why the work keeps routing back through them.

Stephen M. R. Covey put a price on the second question in The Speed of Trust and called it the trust tax. Low trust slows a company down and costs money, high trust speeds it up and makes money, and every handoff in your business is either paying that tax or collecting the dividend.

You can see which one you're running by looking at your meetings. When a smaller group gathers before the real meeting, what they're saying is that things can be said in this room that can't be said in the bigger one, and the pre-meeting exists because the main meeting isn't safe enough for the actual conversation. Every issue that stays out of the room stays unowned. We went further into how a leadership team ends up performing agreement instead of producing it in why your leadership team looks aligned but keeps missing the number, and what matters here is the effect on execution, which is that a team unable to settle a hard issue in front of each other will always route it through you.

People have to weigh in to buy in.

What to change this quarter

1. Map the handoffs. 

Get your leadership team in a room and walk the flow of work across the company, asking where sales hands to operations, where operations hands to finance, and where service hands back to sales. At each crossing, name who is handing, who is receiving, what condition the work has to be in, and who settles it when those two disagree.

Most leadership teams have never done this once, and when they do, two things fall out immediately: handoffs nobody owned, and decisions that have been climbing to the CEO for years with no reason to.

2. Make the work visible. 

Every handoff you mapped runs on a process, so write down the ones that currently live in someone's head, starting with the crossings that fail most often. The test isn't whether a document exists, it's whether the person receiving the work can tell where the last person stopped without having to ask.

3. Move ownership with a scorecard. 

A scorecard documents what a role is accountable for, and you build one for the CEO seat first, then each leadership seat, then down through the company to every functional role.

Once the person in the seat has agreed to their scorecard, have them audit their own week against it, asking whether what they're doing is on their scorecard and, if it isn't, whose scorecard it belongs on. That second question is a handoff, and naming it is the whole point.

Then run the 80/20 by asking what 20 percent of your scorecard produces 80 percent of the value, and move the rest to the scorecard where it belongs. Do it again next quarter, because as your best 20 percent grows to fill your week, there's a new 20 percent inside it.

Glen uses a line, from Dan Martell’s “Buy back Your Time,” on the CEOs who resist this: “80 percent done by someone else is 100 percent freaking awesome. Progress over perfection, and people learn from their own mistakes rather than from watching you avoid the mistakes for them, so coach hard enough that the failures stay non-critical and then let them happen.

4. Give the cross-functional work one room a week. 

Every commitment that crosses a handoff gets three things in writing, which are what the outcome is, who we're counting on to deliver it, and when it will be complete. That third one is the accountability mechanism and it's the one teams skip, even though it's what tells everyone downstream when the work will arrive so they can plan around it instead of chasing it.

Then hold a weekly huddle where the team tracks those commitments, surfaces what's stuck, and gives approvals in the room, with priorities capped at three to five per leader, two to three being better, each with a named owner and weekly milestones.

That last part matters more than it sounds, because a weekly huddle is where cross-functional decisions get settled between leaders, in front of each other, on a schedule. It's the replacement for your inbox. 

The shift

Your people are probably capable, and the wiring is what's holding them.

A leadership team that has mapped its own handoffs, documented its own processes, and settles its own cross-functional decisions doesn't need the CEO in the middle, and that team executes at a speed you can't produce by working more hours, because your hours were never the constraint. The problem was never how much you were doing, it was that the work had nowhere else to go.

Your calendar is the clearest evidence you have. Look at last week and count how many items on it were handoffs between two of your leaders that neither one felt free to settle without you.

That number is your execution ceiling.

FAQ

Why does execution break down as a company grows, even when the people are good?

Work moves horizontally across functions while authority still runs vertically to the CEO, so a decision sitting between two functions has to climb to the CEO and come back down before the work can continue. Growth adds handoffs faster than it adds ways to resolve them, which is why the delay compounds even though nobody is working less.

What's the difference between institutional knowledge and a documented process?

Institutional knowledge is a process that only exists in someone's head, so it changes depending on who does the work and leaves handoffs invisible, because the person picking up the work can't see where the last person stopped. A documented process is written down, known by everyone who touches it, and used the same way regardless of who is doing it.

Why doesn't delegating solve the problem?

Because most CEOs hand off the method rather than the outcome, and when the path was the CEO's idea the person executing never takes real ownership of the result. Handing off the outcome, then asking the person how they'd get there, is what actually moves ownership across the table.

How does a CEO tell whether the problem is trust or capability?

Ask the two questions separately: do I trust this person, and do I trust this person to deliver their accountability on time. Leaders tend to answer the first and act on the second, and if the honest answer to the second is no, that's a scorecard and coaching conversation, and sometimes a seat conversation.

How do you map handoffs on a leadership team?

Walk the flow of work across functions and stop at every crossing, naming who hands off, who receives, what condition the work has to be in, and who settles it when those two disagree. Most teams come out of that exercise having found handoffs nobody owned and decisions that had been going to the CEO out of habit.

What belongs on a CEO's scorecard and what doesn't?

Audit the week against the scorecard first, since anything you're doing that isn't on it belongs on someone else's, and naming whose is the handoff. Then run the 80/20 on what's left, because if someone else can do it to 80 percent, they should be doing it.