Last week, in the first part of this series, we started to look at the barriers a lot of business leaders encounter when faced with the challenge of real growth.
The first barrier we identified was that of being able to look objectively at your company and ask “what do we have to do differently to reach the next barrier?”, and assuming you manage to answer than question, things will undoubtedly need to change. A CEO might have had nine people reporting to them directly when they started up and functioned perfectly well, but it’s impossible to cope with 45, 50, even 75 direct reports.
If you want to grow your company, you’re going to need to recruit leadership talent.
It’s pointless hiring new leaders if you don’t change your own leadership style. What’s appropriate for a start-up company doesn’t work nearly as well for an established business looking to grow. You can micromanage a small team, but if you continue to do that once you have a leadership team in place, at best, you’ll demotivate some of your leaders. At worst, you’ll micromanage your new leaders right out of the company.
You hired your leaders to do a job. Let them get on with it.
The Power of Your Leadership Team
This is a tricky position for a company looking to make it through the second barrier. You need to invest in talent at the first barrier to make it to the next one, but your balance sheet might not stretch to that.
When is it too soon to start hiring those new leaders and when is it too late? If you move too late, you may never make it through to the next level. And what do you look for? People who can do the job really well at the first barrier size company of around ten people or people at the 50-75 mark. However, the more experience you hire for, the more expensive those leaders will be, so you have some challenging questions to think about as you look for your first leadership team.
Organising Your Company for the Third Barrier and Beyond
If you’re going to take your company up to a couple of hundred full time employees, you’ll need a level below your current leadership team level. Once again, you’ll be faced with challenging leadership issues, as you’re faced with the issue of recruiting, training and assimilating a whole new level of management/leadership.
You’ll need to decide what to look for with these mid-managers. Do you want people who can do the job in the second barrier size company or are you looking ahead for people who can function in the third barrier size company? Do you want to look for them now and find people with the ability to grow within the company to become part of the future senior leadership or are they going to peak and leave you with the issue of needing to bring in outside recruits to higher level management?
With all of this, you’ve also got to pay attention to your bottom line. You may find that the answers to some of the questions are dictated by your budget. It’s a difficult balancing act and one which needs to be determined by your individual business needs.
Assuming you’ve successfully surmounted the third barrier, it’s organisational structure that makes all the difference. In recent times, there’s been a move towards broader spans of controls, with more employees reporting to a single leader with fewer levels in the org. chart. Many large Japanese companies, even multi-billion-dollar ones, frequently only have between five to seven levels from the CEO to the lowest level front line staff.
In comparison, there are some US companies that can have up to 17 levels between the CEO and the lowest level employees. You can imagine how hard it must be to be at the bottom of such a complicated structure. If you can get access to information, it won’t be timely and will have been filtered countless times.
So when structuring your growing company, you have the power to keep your org. chart as broad and flat as possible so that the flow of information is fast and accurate while your business can be agile, responsive and flexible to your customers’ requirements. Make sure you keep the structure under control.
Grabbing the Tiger by the Tail
When you break it down, there are really only four areas in which you, as the CEO, can contribute to your company; four things that cannot be delegated to other staff or senior leaders:
1. Setting direction for your company
2. Get the right people on board and develop them
3. Make sure your people have the resources necessary to do their job
4. Remove any big obstacles in people’s way so that they can do the things you’ve asked them to do.
That’s it. Four important processes that cannot be delegated and need to remain in your control.
The problem is that often we get bogged down in distractions and tasks that really should be done by someone else. If you find yourself correcting Excel spreadsheets or running spell checks over documents, stop. That is not your job and if your staff cannot provide you with accurate documentation, then it’s time for some tough conversations.
Because when you get caught up in all this minutiae, who is driving those four important processes? If you’re not, nobody is.
That’s where your focus should be, regardless of how small or large your business is – your time on the business as opposed to your time in the business.
What barrier is your business currently facing? What are your plans to adapt your leadership to break through to the next level? Tell us about your vision in the comments below.