Some things in business seem to be universal
Growing Pains Inevitably Happen
After having worked with around 100 small businesses in the last 45 years, I can see emerging patterns in top management issues so in this blog, I’m going to refer to owners only. However, a full-charge manager of a small business can create the same disastrous results for a small company that we will be discussing.
My directive from my clients, over and over again, was to aid in company growth. My specialty was guiding companies from bankruptcy level, or at least making very little profit, to growth and profitability. I’m now retired from the work – it’s very high-energy work, lots of long hours, and I aged out of the arena and now own a boutique website/digital marketing firm.
One of the most debilitating issues for small businesses is when the owner doesn’t personally grow as the business evolves. One of my first evaluations of a business was to evaluate whether the owner was performing the core functions of business management, and, if not, why not. What functions was the owner actually handling?
Working with the owner on how to define their evolving responsibility for their business and to let go of non-core duties was a very touchy subject every single time. Every single time, with lots of push-back.
When a business is very small, the business owner is involved in every single tiny detail of the decisions made, of client management and customer service. Many business owners gain a lot of satisfaction in knowing exactly the status of every detail of a client’s account. The owner and the client develop a strong and personal relationship based on direct contact.
This gives the owner a feeling of safety, of control, and a regular “hit” of dopamine to their brains, the “satisfaction” and “motivation” hormone. The owner gets the kudos from the clients, the owner goes home at night feeling satisfied.
However, as a business grows and expands, if that same owner doesn’t re-work his own job description inside his own company and LET GO of the portions of the workload that are unrelated to top-level company management, the company will suffer greatly. Growth will be limited, employees will be unhappy, and eventually the clientele will implode.
That’s usually when the owner would find me. I would be hired to “fix” the company. 100% of the time I had to “fix” the owner before I could get anything done in any other part of the company.
Letting go of the direct client management is very hard on small business owners. When they start stepping away from the direct client interaction, they give up a measure of control and that feeling of safety. And often they are forced to hire their own replacement for the job duties that are not longer applicable to their company’s needs.
As I worked through the core job duties for the growing company with a company owner, a job description would also be created for that critical replacement person. Not only would the duties for the newly created position be decided, we would also work through the needed skills, the personality traits needed, and the background required by the new person in order to satisfy the owner that the job would be handled appropriately.
Then came the hiring process.
In a small business, often the newly created position meant a critical drop in cash flow first, before additional income would be generated by the new person. It’s a catch-22 that stresses the financial structure, which in turn stresses the business owner. It’s a difficult decision for the owner to make, and inevitably somewhere during the hiring process the owners start to drop off requirements in order to hire someone for a lesser amount of money than for someone fully qualified.
This is a siren song that business owners hear every time. They start with “on-the-job-training” and “teach the new person MY way of doing business” and “growing with the company.”
Now, keep in mind the owner has created a new position because they themselves are completely out of the resource of time. They don’t have TIME to babysit an unskilled person. They will end up having to micro-manage the client relation portion of the job, which defeats the purpose of the new position.
And the process fails most of the time. The company suffers, and the owner suffers, because now he has client relations problems and possibly production problems. The company stutters, finances are worse, and the owner becomes distressed and depressed.
When I could, when a really good and qualified candidate was available, my recommendation was to suck up the financial drain and take a leap of faith. Hire the person who had a history of success in a corresponding position. Successful people aren’t successful just once – they generate success wherever they go. They bring fresh air to a company, fresh knowledge, and successful endeavors.
Only after I had detailed how the job duties would be split would owners grasp the context of how much a qualified person would help the company grow and prosper. Sometimes owners would have to get financing to support the newly created position – sometimes with family members, sometimes at the banking level. It really was a leap of faith, and not once were the company owners sorry for having made the decision to hire the qualified person.
There were several times where the newly hired person turned out to be a bad fit for the company. This might have nothing to do with skills. It might have to do with the new person being a bad fit for the company’s individual environment. Here’s an example: A Level A person might be hired, and the company environment might be laid back and casual. The new person might come to work in a suit and tie, and everyone else would be in casual clothes. This simple personal presentation difference could create a barrier to the two sides becoming comfortable with each other. Without comfort and trust, a team is very difficult to build.
The good news is that even then, the new person would have firmed up the parameters of the new position, making it easier to interview and hire a replacement. Every single time, there was a positive outcome from hiring a qualified person.
So when company owners approach me about company growth, I always start with the owner interview and get a feel for how willing they are to give up a lot of the direct client management, OR production management, OR financial management, whatever arena they are planning to fill with a new hire. We go through an exercise demonstrating how the top management position in the company will change and what that means.
And then I let the information sort of sink in for a week or so. By the time I get back to the company owner, they may have worked through the ideas of change.
And that’s a good thing.