Why The Capability Gap™ is bad for business
Building capability in your team will enable you to make the shift from ‘doer’ to ‘leader’. This is a big step.
Standing in the way of this step is The Capability Gap™ (see figure 6.1). It causes a lot of problems in growing businesses and makes founders ill-equipped to grow capable teams. This gap in capability between the owner and the next most experienced person in a small but growing business is a problem. It is also a hurdle to overcome if you want to upscale with the right people in place.
It does take a leap of faith to employ more experienced – and more expensive – people to join your team while being mindful of overheads as you upscale.
Impact of the gap in experience
All questions and problems apply an upward force of pressure on the founder, escalated on a daily basis, by a team that is unable to bridge The Capability Gap™.
The Capability Gap™ is usually big. Avoiding employing the right (more experienced) people when the business and owner need it most is due to several factors, most of which are based in fear:
- The business owner lacks certainty around what resources or structure is needed, beyond some help with daily tasks. Therefore they employ someone to do low-end tasks rather than taking on someone who would be capable of much more responsibility.
- They are reluctant to pay too much, especially if it means the new person is earning close to what the owner is paid.
- They hold back on making this investment into their business because they fear making this commitment.
- They are unsure how to work with or manage a more senior or experienced employee.
- Control issues are perpetuating a fear of letting go.
The inexperience gap results in questions and problems reverting back to the owner, who is the only person with enough experience to address certain situations. This doesn’t actually help the owner or the business. It means the company’s employees still need to go to the owner for answers and problem-solving because they don’t have the capability to handle problems themselves. There are more people in the business, and more costs because of that. But, the business owner is still mired in the day-to-day.
As the business grows and becomes more complex, all questions and problems are directed to the owner daily, by a team that is unable to bridge The Capability Gap™.
Closing the gap
It does take a leap of faith to close The Capability Gap™, and the leap is essential to upscaling. So, how do you move closer to taking this leap?
In my experience, when it comes to resources to manage new (and sometimes exponential) growth, business owners fall into one of two camps. They either reactively throw more people at the problem (figuratively, of course) or they take on more and more of the workload themselves. Neither of these approaches is right and both result in more work for the owner.
As difficult and time-consuming as it may be, this is when the owner needs to understand how things get done in the company and who is involved. It helps you map out what needs to be done. Break activities down into what is best done by the existing people in the team and what needs to be done by the owner. Highlight other activities that need to be done (but not by the current team or owner) that represent a gap in resources. Once this process done effectively, then resources can be added exactly where they are needed. Costs of increased headcount can be planned for.
Bridging The Capability Gap™ between the owner and the next level in the company needs a fresh perspective. What could the company look like from a resource and structure perspective if more experienced people are placed where they could add the most value? That kind of structure would add considerable value to the owner and make a positive difference to how the business is able to expand in a manageable way.