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5 Business Situations Every Leader Needs To Know


STARS Model

Transitioning into significant new roles are the most challenging times in the professional lives of managers.   Success or failure during the transition period is a strong predictor of overall success or failure in the job.


But effective leaders strategically change their leadership behaviors depending on the type of business situation they encounter.  They make decisions and take actions differently in different situations. 


Michael Watkins in his book, The First 90 Days, introduced the STARS Leadership Assessment Model as a simple way to assess the business situation you are entering as a new leader.

 

STARS is an acronym that stands for Start-up, Turn-around, Accelerated Growth, Re-alignment, and Sustaining Success.  Each situation brings its own set of opportunities and challenges that requires we be ready for AND have the ability to navigate.


Understanding this model can help you make decisions about your current situation, it can help you determine future leadership opportunities, and it can help you if you are hiring for a leadership role. If you are a manager, you may find you have teams in a different situation, so it's important to understand the skills needed to define your approach.


Here's what each situation looks like:


In a Start-Up, you’ve got to assemble the capabilities (people, funding and technology) needed to get a new business, product or project off the ground. If the business situation can be described as a ‘Start-Up‘, then:

  • Degree of Urgency: HIGH

  • More Learning or Doing: DOING

  • Offense or Defense: OFFENSE

  • Tough Calls: MAKE NOW

  • First Action: ASSEMBLE TEAM & RESOURCES


In a Turnaround, you take on a unit or group that is in trouble and work to get it back on track. Both start-ups and turnarounds involve a lot of resource intensive construction work — there isn’t much existing infrastructure and capacity for you to build on. To a significant degree, you get to start fresh, but both require that you start making tough calls early. If the business situation can be described as a ‘Turnaround‘, then:

  • Degree of Urgency: VERY HIGH

  • More Learning or Doing: DOING

  • Offense or Defense: DEFENSE

  • Tough Calls: MAKE RIGHT NOW

  • First Action: CUT TO DEFENDABLE CORE THEN REBUILD


You are managing a rapidly expanding business which requires you put in place structures to scale. This will feel like a departure from the “innovative & autonomous” culture of a start-up. Balancing standardization with improvement is key. The focus is on building structures to spread your culture as you integrate new employees. If the business situation can be described as a ‘Accelerated Growth‘, then:

  • Degree of Urgency: HIGH

  • More Learning or Doing: DOING

  • Offense or Defense: OFFENSE

  • Tough Calls: LEARN THEN ACT

  • First Action: LEARN QUICKLY, PERMIT MISTAKES


Your challenge is to revitalize a unit, product, process or project that is drifting into trouble. Your main focus is helping the team-which is typically in denial- see the problem and forthcoming impacts. This requires that you reinvent the business. If the business situation can be described as a ‘Realignment‘, then:

  • Degree of Urgency: MODERATE

  • More Learning or Doing: LEARNING

  • Offense or Defense: OFFENSE

  • Tough Calls: LEARN THEN ACT

  • First Action: STUDY THEN REDIRECT RESOURCES


In a Sustaining Success situation, you’re responsible for preserving the vitality of a successful team and taking it to the next level. Keep people motivated by inventing a new challenge. If the business situation can be described as a ‘Sustaining Success‘, then:

  • Degree of Urgency: LOW

  • More Learning or Doing: LEARNING

  • Offense or Defense: DEFENSE

  • Tough Calls: LEARN THEN ACT

  • First Action: STUDY THEN CREATE URGENCY FOR CHANGE


For more information about the STARS Model, see Michael Watkins’ book, The First 90 Days.