The STaRS Business Model

Dear Managers and Leaders!

As I told you in a previous post, I’ve been reading the excellent book “The First 90 Days” by Michael Watkins. I liked the book so much that I want to give you a flavour of what you can find in the book. This and the next few posts will be dedicated to presenting some concepts found in that book. There is nothing like reading the original of course, but I wanted to share a few ideas presented by Michael Watkins that I particularly liked.

The first concept that I really liked in the book is the STaRS business model. According to Watkins, there are 4 states in a business: Start-up, Turnaround, Realignment, and Sustaining Success. A start-up business is a new business that needs to get off the ground. Products must be created, people must be brought in and trained quickly, and projects must be launched in very short order. Note that a start-up business is not necessary a new company. Even established companies have sections in start-up mode when a new project starts, when a new product is created, or when a new team is formed.

The second business state is the turnaround state. A business is in that state when the situation is dire. A business is losing money, its best talents are jumping ship, the team is totally demoralized and not working anymore, or anything else that makes the business at risk of shutting down.

The third business state is the realignment state. In that state, the organization is still not in trouble, but there are signs that the team is drifting towards problems. The main risk in such a situation is that many people in the organization are in denial about the situation and believe that no changes are required.

The last state in the model is the sustaining success state. Leaders want their business to be in that state! The business makes money, people on the team are happy and work well together, etc. This is the easy state for the leader, the state you always want to go back to.

The interesting thing about that model is its dynamic view of businesses. A start-up business will either enter a sustaining success state or will fail and lead to the business shut-down. A realignment business will either end up back in sustaining success if it succeeds or in a turnaround when it fails. A turnaround business will either succeed and lead to a sustaining success state or fail and lead to the shutdown of the business.

The main point that Watkins brings up is that as a leader, your actions and style must be very different depending on the current state of your business. Therefore, analyzing the state of your business accurately is absolutely essential!

In my next post, I will discuss Watkins’ framework for a successful leadership transition.

So, dear leader, in what state is your business?

Until next time,

Remi Cote