My last three consulting jobs have been with businesses that are experiencing tremendous growth. While, for the most part, this type of growth is a good thing, making the change from a two- or three-person business to a 10(+/-) employee business is a huge transition that can lead to a variety of growing pains.
Why is growth, especially that of the rapid variety, so hard on the small business owner? The reasons are twofold.
First, most small business owners aren't prepared for the managerial demands of a growing business. For most kitchen and bath dealers, their expertise is in design and sales. Owners are often untrained and unskilled in the areas of financial management, human resource management and marketing. To make matters worse, many of the management skills required to run a growing business usually run counter to the way the owner is accustomed to doing things.
Second, the bigger the company becomes, the further the owner fades from the action. In the beginning, the owner makes all of the decisions, does all of the creative designs and drawings and accounts for most of the sales. As the business grows, it's virtually impossible to "do it all." The owner becomes separated from the customers, vendors and employees.
There are a number of traits required to be a good manager. Most of these traits come into play as the company grows. The ability, or inability, of the owner to adopt these skills will determine the ultimate success of the business.
Following is a list of traits that a successful manager must learn:
- Focus. The successful manager focuses on the project at hand,
no matter what else is going on. The typical kitchen and bath
owner/ manager would stop a task to respond to the latest
- Attention to Detail. The successful manager dots the i's and
crosses the t's religiously. The typical kitchen and bath dealer is
often too busy or simply not the type to enjoy dealing with
- Follow-up. The successful manager knows that employees need to
know their work will be evaluated. The typical small business owner
doesn't take time to perform this important task.
- Conflict Resolution. The successful manager views resolving
conflicts as an important part of his job description. The average
dealer sees it as an intrusion on his time.
- Training. The successful manager views training as an important investment. The typical entrepreneur sees it as an expense.
This is not to say that all kitchen and bath dealers fit into this profile. Nor is it to say that they can't make changes in some, if not all, of those managerial traits that they lack. However, the transition to manager is not an easy one and involves some basic, and often wrenching, changes in the person who originally founded the business.
The Peter Principle (that is, sooner or later, everyone peaks and ends up in a job beyond his or her capabilities) is constantly creeping up on all of us as our companies grow. We all have our limitations managerial and otherwise.
If you notice that the Peter Principle is hanging over your management skills and you're having a difficult time making the transition from entrepreneur to manager, it may be time to consider the four alternatives available:
- Downsizing Your Business. This alternative involves shrinking your business back to where you are able to spend your time doing those things you enjoy. Before you make this choice, ask yourself: What are the downsides of shrinking the business (loss of income, reduced market value of the business, letting go of customers, laying off employees)? Will you be able to emotionally and financially cope with these losses?
If the answer is "no" to either of these questions, then consider the following alternative.
- Taking a Personal Inventory. This includes assembling your own "managerial defect list." This is a list of personal traits that make managing your business difficult. Consider which entries on this list you could, and would, change in order to make a managerial transition. Ask yourself these questions: How many of the traits on your managerial defect list can you delegate? How many of the traits can you train others to do? Of those traits you cannot delegate or train others to do, what can you reasonably expect to change?
This exercise will tell you what you need to do to improve your managerial skills and how to go about it. Assuming, as a result of the answers, you can make the transition, then get busy! Start hiring, training and delegating. . .and where applicable make changes.
Assuming you decide you can't, or won't, make the transition, it's time to consider the next alternative.
- Hiring a Replacement. This alternative includes hiring a president or a general manager to run your company. This person would run the overall business and free you up to do what you do best and enjoy the most. Before hiring a replacement, ask yourself: Is your company big enough and profitable enough to afford this new position? Can you let go of the day-to-day operating functions of the business?
If the answer to either of these questions is "no," you'll have to go back to either of the preceding alternatives (downsizing the business or making personal changes) and decide how you can adapt one (or both) to your situation. You might also consider a fourth alternative.
- Selling the Business. Before you decide to take a step as big as selling your business, there are several questions you would have to ask and considerations you would have to evaluate: Would you emotionally be able to walk away from a company you have built? Is the financial history of the business attractive enough to attract prospective buyers? Are policies, procedures and structures in place that would make it easy for the new owner to take over the business? Is the company salable at a price that works for you?
Ultimately, the best decision for you might be to sell the business and move on to something you're better suited to do.
If your company has or is experiencing growing pains, and you ignore the symptoms, these pains will become chronic. Now is the time to step back and analyze where you are and where you want to go.
Hank Darlington, Darlington Consulting, is a consultant, writer and teacher. You can contact him at (916) 852-6855 or e-mail at email@example.com.