| |
Moving from the “Mom and Pop” to the “Professional” Company
Why do many great small companies fail to make the leap from a “mom
and pop” company to a medium-size, professional company? Seventy-six
percent of all companies have fewer than three employees, and less
than 4 percent generate more than $1,000,000 in sales. Growing a
company beyond 10 employees takes courage, foresight and, hardest of
all, the ability to reinvent yourself at each level of growth. Quite
simply, what tool you to one level will not take you to the next.
The first step to take as a leader is to determine your company’s
current growth stage. Stage I, externally sales driven, is all about
survival. Generally, there are fewer than 10 people in the company.
The company has loose structures, a flexible and creative environment,
lots of trial and error, and a family environment. In this stage, the
mission is clear – bring in sales and generate cash flow.
By Stage II, the company has a niche in the marketplace and sales of
$1,000,000 or more. The focus now shifts internally and is operations
driven, with tasks delegated and supervisors hired and promoted.
Functional departments emerge and many of the people who helped the
CEO launch the firm are promoted and given raises in appreciation of
their hard work.
Stage III is often characterized as chaotic. Acceleration leads to
turbulence. With more transactions, more clients, more personnel, the
systems that used to work no longer do. Communications break down, the
company loses touch with customers and barriers emerge among
departments. At Stage III, the CEO may also lack clarity of vision and
not really know what comes next. With an even greater internal focus,
the company performs reactively instead of productivity. This is where
the recreating and transforming begins.
In order to get this far, the CEO must demonstrate the ability to
do three things:
1. As the company goes from Stage I to Stage II, the CEO must be able
to delegate. A business owner who cannot turn over tasks and
responsibilities to others and allow them to make mistakes will never
become a CEO. In order to delegate and grow, you must rely on good,
well trained people capable of making independent decisions on a
day-to-day basis.
2. Be ready, willing and able to fire people who do not have the
skills to take the company to the next level. Managing people is one
of the greatest challenges in growing a company. CEOs can find many
reasons to continue to employ personnel who are holding the team back.
But a smart leader knows great people are three times more productive
than good people—and it is your job to hire the best and fire the
pest.
3. Reinvent yourself, As you grow beyond 25 people, your company
requires systems and solid organizational skills. This requires most
CEOs to re-focus their energies, upgrade their skills , and get out of
their comfort zones. This is a good time to join CEO groups where you
will be able to interact in a safe environment with other CEOs facing
similar challenges.
A professional company has the right people, the right processes, and
the right culture in place. The business is no longer driven by
personality, but by systems, leaders, and managers who understand what
their job is. The mantra we use is: “Managing the status quo is far
more dangerous than launching into the unknown.”
Rich Russakoff is CEO of Bottom Line Consultants. He can be reached by
phone at 800-359-2521 or go to his Web site at
www.bottomlineconsultants.com.
|
|
