Business leaders strive to achieve a consistent growth in their business and entrepreneurs may find that there comes a time in their business life where their enthusiasm and ambition need to be bolstered by the infusion of the hard headed realism which experienced management talent brings.
The 23 year old founder of a business we advise is far sighted enough to recognise that he needs to invest in a strong CFO and COO, who will handle the “day to day” in which he acknowledges he is less interested. This allows him “time to think” as he continues to achieve his staggering initial growth. However, such foresight is rare and often the fear of increasing overheads mitigates against such a hire.
Yet deciding when to bring in professional management is something which should be addressed at the earliest possible stage in a company’s development. It is a fundamental process which unfortunately frequently gets swept aside in the first years of growth.
What occurs then is a situation whereby the founder struggles to relinquish what has effectively become their life. The emotional investment, irrespective of whether the company is an SME or a large plc, often gives the founder a sense that no one knows the business better than they do. While it may be true that they have a wealth of embedded knowledge, that does not mean that they are indispensable nor that they are best placed to take the company to the next stage of its development. Equally, they may still have a fundamental role to play in the evolution of the company but such a role is almost bound to be different to that which they previously undertook.
Generally speaking, by nature entrepreneurs are bored by the day to day management of a business. Their strengths lie in innovating and being creative thinkers. However, entrepreneurs often migrate into a management role as the business grows, failing to realise that this does not play to their strengths and can be holding back the development of the business.
Some experts suggest that company founders should not only know their limitations, but when the time comes to handing over the reins they need to do so completely, without interference. However, that does not necessarily mean that they have to abandon the business entirely. Entrepreneurs such as James Dyson have successfully handed over the “management” reins, allowing others to take over the day to day roles while retaining a pivotal role in the development of the organisation.
It can be extremely difficult for founders to step aside from a business. As the business grows, even the most brilliant business mind will need the support of a solid managerial team to maximise growth potential.
There are a number of ways to address this:
• Founders need to be aware from the outset that the challenges they face at start-up will change as they grow, requiring them to make difficult choices. They need to prepare for this at the earliest possible opportunity and decide how their attributes can be best deployed at each stage in the company’s development. be prepared to recruit people who will challenge them and not be “yes men”.
• They need to be cognisant of their motivations, strengths and weaknesses and how these will impact on the development of their company. They need to identify how their strengths can be enhanced and their weaknesses alleviated.
• They should fully understand the benefits of management succession planning soon after the business is off the ground. As with our young client, this is when they need to start putting in place the right management talent to allow the business to achieve its maximum potential.
• Understanding the mechanics of garnering an experienced management team that support a new business venture and can optimise their business accordingly is key to an organisation’s successful growth.
Without doubt there are plenty of examples of successful entrepreneurs who have stayed with the company through many stages of growth (from Jeff Bezos at Amazon to Akai Morita at Sony), yet they have all surrounded themselves with a strong, independently minded management team who can debate robustly and enhance the founder’s vision. However, such foresight is not always easy for those who have put their heart and soul into the development of a business.