Are you the barrier to growth?
Bruised egos aside, are you holding your business back?
Gerard Burke, founder and MD of the Your Business Your Future programme, asks whether you’re holding your business back and offers sound advice on how you can start to fire it up again
Did you know that almost two thirds of senior staff in small firms leave within two years of joining – and mainly because their relationship with the owner-manager has become too frustrating?
Take a look at your own relationships with staff. Do you believe that you still do most jobs in the business better than anyone else? Are you the person who sorts out all the problems and fights all the fires? Do your managers need your approval before they make a decision? Do you keep them waiting while something sits in your in-tray? Do you throw in new ideas at the last minute and delay projects?
If you answered “yes” to any of these questions, then you could be what’s holding the business back. Entrepreneurs, whether through a need for control, ego or pure enthusiasm, regularly become a bottleneck to progress. To grow your business beyond the constraints of your own time and energy, you must get the right people working for you and trust them with your ‘baby’. You need to step back from managing the day-to-day business and concentrate on the future, or you will be running a static business forever.
First, it’s important to take a hard, honest look at yourself. Most owner-managers will change as their business moves from start-up to established company. We have called these phases: artisan, hero, meddler and strategist. For your business to meet its real potential, you need to become a strategist. You must find time to work on the business, rather than in it, looking outwards and forwards to craft the future you want for your business and for you.
From artisan to strategist
Virtually all firms start as artisan businesses, set up by someone who has a particular skill, profession or trade. In the early days, artisan entrepreneurs spend most of their time producing a product or delivering a service. Artisan businesses are unlikely to grow beyond a certain point because management skills are often weak and too little time is devoted to planning.
Mike Richards is a real artisan. He set up MR Recruitment, which provides treasury specialists, almost six years ago. “I love my job and get a buzz from talking to candidates and clients,” he says. But in 2007, he was suffering from work over-load. He was also conscious of not knowing where to go next. “I knew I wanted it to be more than just me, a desk and a phone, but didn’t know quite how. All I wanted was to enjoy my job and have a thriving business, but I couldn’t see how to grow the business past a certain point.”
Richards used to spend up to 40% of his time on day-to-day administration. Now this is more like 10%, and he devotes around 20% of his time to planning and strategy, compared to a maximum of 10% before. He’s also increasing the time he spends doing what he loves: working with clients and candidates. “I realised the business would atrophy if I didn’t change something,” he recalls. “I needed to let go of some parts of the workload.”
The company now employs seven staff and Richards is in the process of slicing the business up into “bite-sized chunks” that other people can handle. His aim is to be executive chairman in five to 10 years’ time.
Richards, who participated in the Business Growth and Development Programme (BGP) at the Cranfield School of Management in 2007, has found there are many benefits of letting go. “I can do more of what I like and get less stressed,” he says. “I work on the business rather than only in it. I have time to tackle the ‘important’ stuff rather than just the ‘urgent’. But most importantly, I now have a defined goal – growing turnover from £1m to £5m in five years – and a plan of how to get there. And I know what’s in it for me.”
Many owner-managers are heroes or meddlers; both are dangerous for a growing business. Heroes still believe they perform most jobs better than anyone else. They probably still own the key customer relationships, and spend lots of time managing day-to-day operations and fire-fighting.
Eventually, heroes might start to delegate some responsibilities and create a management team. But some slip into the role of meddler. They find it hard to hand over routine management tasks and cannot resist getting involved with the team’s work.
Ruth Allington admits to having strong hero tendencies. She is joint senior partner and chief engineering geologist at GWP, an independent consulting partnership focused on earth and water resources projects. The business’ founder left in 2004, and, since then, Ruth has been one of two senior partners.
Before 2005, Allington was working very long hours, taking work home and feeling guilty about not doing as much billable time as her partners. But battling hero tendencies is hard. In the 18 months after BGP, Allington acknowledges she was probably still more hero than strategist.
“I still have tendencies in that direction, but I try not to work more than 35 hours a week, or take work home (especially at weekends), and recognise that someone’s got to run the place,” she says. “I do more thinking about the business and have particularly enjoyed bringing in work for others to do, without getting stuck in myself and insisting on being involved and informed with all the minutiae. So, I’m probably not quite the consummate strategist yet, but I’m certainly more than halfway there.”
Relinquishing the power
The key to becoming a strategist is to let go. The single biggest obstacle to the development of your business will be your inability to do this. You need to recognise that if you alone are the source of all power, decisions and leadership, then the business can’t grow beyond the limit of your resources. It’s crucial to have a team in place to provide the launch pad for long-term growth.
To let go of power, you must trust your team. But before you transfer your powers to others, you must first have the confidence to let go emotionally.
Sumitra Francis, who runs Concorde Graphics, is a case in point. Her parents started the company in 1973 and she has been involved for many years. But, as she admits, an absence of experience outside Concorde created a lack of confidence. It also made it hard for her to have an overview of the business.
A symptom of this lack of confidence was where she chose to work: her desk was stationed within the production office. Moving into her own office made a huge difference. “It wasn’t so easy to get sucked into the day-to-day running of the business,” she says. “I realised I had spent around two hours a day on routine tasks and trouble-shooting. It was also clear that I had not let staff take responsibility; they were used to looking to me for guidance.”
Francis has made a big effort to stay out of the production environment, giving herself more time to focus on sales and strategy. The result is that her staff have got used to dealing with problems when they arise. “They have responded well to the change, and there has been an upturn in people’s performances, partly because I have given them the responsibility to make decisions and sort out crises,” she says. “If you’ve got the right people, trust them and let go, and then stay away. You have to be firm with yourself.”
Francis is moving from hero to strategist. “It takes a long time,” she says, “but now mentally I have made the break.”