Having founded and developed several businesses, I am familiar with the issues that can arise when your company starts to grow rapidly. Sometimes you get to a point where there are too many things waiting for your attention and however many hours you put in, you never seem to get to the bottom of the pile. That starts to cause problems quite quickly: issues are not dealt with as soon as they are spotted; decisions are postponed. At some point you realize that you have become the bottleneck to change.
It is tempting at this point to think the answer is just to hire more people to take on some of the tasks that are piling up, but that may prove to be a less straightforward solution than it sounds. You may find you can’t hire people immediately with exactly the rights skills, or it takes time to build up confidence in them. You are reluctant to hand over important decisions, because you are keenly aware of the consequences for your business of them being mishandled.
Rethink the processes
At the foundation stage, many business leaders hire people from their existing networks whom they already know and trust. The team works very closely together, and people can hand over tasks to each other with relative ease and informality. This generally works well when the company is smaller than the “Dunbar number,” based on the size of a medieval village, which is 150 people. In a company of this size, everyone knows everyone and the distance between the most senior and the most junior person is small. There is less need for formal processes.
But past this point, the dynamic of the business starts to change. There are too many people for the informal operational practices that worked in the past to be effective. The founders are no longer bringing on board people they already know and trust, the net is cast wider and the new hires are unknown quantities. They may have lots of relevant experience, but it takes time to establish trust and confidence.
At this point a company which was previously agile, and dynamic can start to slow down. The business author Geoffrey Moore talks about high trust networks and low trust networks – at the smaller company stage many things operate on trust, but as it grows the company tends to move to a low-trust situation where there is a lot more control and supervision. More and more decisions tend to get pushed upwards and pile up on the same few people’s plates. This threatens the ability of the company to grow successfully.
Unblock the flow
At this point, change is necessary. Just trying to work harder and harder and dig through the pile is not sustainable. The company where the CEO makes all the decisions is the company where the CEO doesn’t sleep!
The first thing to do is to review the underlying processes. In “You’re probably focused on the wrong metrics – here’s how to fix that,” I talked about how important it is to set the right metrics for the business. Collecting the right data, keeping it up to date and sharing it across the organization helps to support the right behaviors. If everyone knows what success looks like and what their particular department is supposed to contribute to the overall picture, they can get on with it. Metrics can yield powerful insights into how the business is performing.
Push decision-making downward
Hold people accountable for the performance of their part of the business. As long as they have control of the levers they need to affect the outcomes, they will be able to take responsibility for specific choices. Even a junior member of staff can be given control of the budget for a particular area and held accountable for managing it.
For senior managers to be confident about handing over the important decision, they need to have visibility of what’s happening in the different areas. Use data so that they will be alerted if the expected courses of action are not being followed.
Be strategic in how you utilize your most senior and trusted team members. What often happens is that business leaders recruit new people to do new things and move less-experienced people into start up areas – because it is new and/or small it is perceived as low risk. But if it is strategic to grow that new area you should do the reverse and put your most experienced person into it. It will also generally be easier to hire someone with appropriate skills to handle the more mature areas of the business.
Support staff to self-manage
In the last century, bigger companies used to operate in a very hierarchical way, based in one office with everyone under the eye of supervisors. But the digital workplace works better with empowered, autonomous staff who can make decisions and take responsibility.
Technology provides a way to ensure the visibility and accountability which makes this possible. Sharing up to date, real-time information across the company gives the visibility which allows business leaders to feel confident about handing over those vital decisions – because they know that they will be alerted to areas of the business where issues are emerging. Having generally accurate forecasts also means they can immediately see which areas are diverging from prediction.
Pushing decision-making down your organization is vital for maintaining an agile and dynamic company culture as you grow. And once you have stopped being the bottleneck and handed over day to decision making to people throughout the business, you can focus your energies on leading the business in the right direction.