leadership

Companies transform as they grow.  You need to transform too and become a new type of leader for your growing business.

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Show Notes

Companies transform as they grow.  You need to transform too and become a new type of leader for your growing business. Entrepreneurs can fall into a trap where as they try to manage everything in their growing business, they struggle, just to keep up.  Once that happens, some of the critical decisions and strategies he or she should be focusing on, get left to the backburner.

In today’s episode we’ll talk about some of the symptoms to look out for and what entrepreneurs need to do actually grow with their company.

Key Points

*When a business is smaller it is all about the entrepreneur, but as it grows it moves to being all about the organization the he builds.

*At some point, a business becomes too large for an entrepreneur to manage and he must begin to build an organization that can help him effectively execute and continue to grow his business.

*Entrepreneurs can fall into this trap of not growing with their business.

*Symptoms include doing too much of the day to day tasks, micromanaging, decision bottlenecks, surprise problems, frustrated by workload and the lack of strategy and direction.

*To make a successful transition and grow into a new type of leader, entrepreneurs need to recognize that they can’t do it all and learn to delegate and develop trust in their staff.

*Creating trust to effectively delegate involves setting up staff for success with good hiring, clear communication and a clear organizational structure.

*Businesses can easily get into trouble if entrepreneurs become a decision bottleneck and aren’t making the transition to create structure with the staff responsibility and span of control.

*Businesses can stagnate if an entrepreneur is not making the transition from manager to leader.

*Entrepreneurs need to focus on long-term strategy, communicating the vision, mission and goals, challenging the status quo and inspiring and motivating the staff.

Resources and Links

Have you fallen in the trap of not growing with your business?

Set up a session with Lisa Roberts to talk about getting out of the trap to grow a healthy business.  Use this link to set up a session with her by following this link.

 

For further reading on the subject of leadership, check out some of these books:

True North, Bill George with Peter Sims http://amzn.to/2nIJY0U

Good to Great, Jim Collins http://amzn.to/2nIH6RW

The 21 Irrefutable Laws of Leadership, John C. Maxwell  http://amzn.to/2o2BvGu

Note: Links in this post may be affiliate links.  Lisa Roberts is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

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Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

Managing and sustaining a family business can be challenging especially as it moves from one generation to the next. In this episode, the 2nd generation owner of a nearly 100 year old business shares his secrets for success.

To listen to the episode hit the play button.

To download the episode, right click on this link  and choose Save Target As.  Go to the folder where you want to save the recording on your device and click Save or Enter.

Make it easier to get upcoming episodes by subscribing to the show on iTunes . Subscribing to the show will automatically download the episodes on your preferred listening device so you can listen to them when and where you want. And hey, if you like what you hear, please leave the show a great rating and review while you are there on iTunes.

Show Notes

A family businesses can be challenging to manage and sustain especially as it moves from one generation to the next. According to several studies the chances of survival of family businesses decreases as companies move from one generation to the next. In this episode I interview the owner of a company that has been in business nearly 100 years.  I wanted to find out what the secret for his success has been as he moves his company into its third generation. You’ll also hear some good tips about managing seasonality in business too.

Key Points

*Henry Satt, the president of Seashore Food explains how the company started from its humble beginnings as a chicken and egg store back in the 1920’s.

*The family business has evolved into a regional food service distribution company selling 5,000 different items.

*Henry tells us about his thoughts and considerations about his business and how he decided to continue to run it for the next generation.

*He tells us how he got his experience in the family business and some aspects about running a business that school didn’t prepare him for.

*Henry shares how he trained both his son and son-in-law in various facets of the company’s operation watching for their strengths and weaknesses to determine the right positions for their skillset.

*Listen to the great advice he gave to his family members before coming into the business about support in good times and in the rough times.

*Henry tells us how his family maintains good relationships inside and outside the business and how they enjoy a very healthy balance of business and family life.

*Find out why Henry likens his family to the family on the TV show “Blue Bloods”.

*Hear how this business owner handles things like compensation, performance reviews and other potentially sticky issues that can come up in a family business.

*Since his business has a seasonal aspect to it, Henry gives us tips on how he manages the seasonality and find out how a recent acquisition is helping to manage it even more.

*Pay special attention to some common themes for success surrounding relationships in this episode.

Resources and Links

About Our Guest
Henry Satt is the president of Seashore Food, a food service distribution company located in Southern New Jersey.  As a second generation entrepreneur, he has been in his family’s business for most of his life.  He has also been involved in the hospitality industry and in real estate and served on several boards of local organizations. Henry graduated with a BS in Business Management from Farleigh Dickinson University and is married with two children and six grandchildren.

To Learn More Seashore Food

Seashore Food is a food service distribution company established in 1920 and located in South Jersey.  They market and sell products to food service operators in the Southern New Jersey region.  Check out their website SeashoreFood.com  to see how their products and service can benefit your food service operation.

 

Sign Up to Get Updates

Get all the updates and information Lisa shares from Business Rx and the Healthy Business Healthy Profits show! You’ll get information, tips and strategies on growing a healthy successful business. Don’t worry, I won’t bombard you with emails.  At most, you’ll get something from me every few weeks. You can sign up  Here

Lisa Roberts is a business operations consultant who advises growth company entrepreneurs in successfully managing growth and the challenges they face along the way. She has over 25 years of experience in operations, finance and administration and spent several years in executive roles at a high growth company. She recognizes that there is a fine line between success and failure in a growing business and that entrepreneurs need to focus on managing finances, creating a sound operation and employ good business practices to stay on track.   You can find out more about her here

At some point along the path of growing your business, from an owner’s standpoint, it goes from being mostly about you to mostly about the organization that you build.

This is the last segment in this series about the top issues growing businesses face. You can look back to the other articles in this series if you like in posts from April, June, August and October 2014.

Now, let’s look at the ways you, as the owner, need to grow so that your business can continue to grow too.

You’ve hired employees to handle the extra workload. You keep a close eye on them to make sure they do it right; whatever “it” is. For most part, the central functions, day-to-day decisions, administration and operations all revolve around you. But at some point it gets to be too much for one person to handle and something has got to give.

Reality check: You can no longer operate with you at the center. Instead, you have to operate with you at the top.

Oh, I can hear you now, “What do you mean, I am at the top!”

Are you?

Do you still micromanage everyone?

Do you spend most of your time buried in the day-to-day and rarely spend time on high-level planning and decisions?

Have issues come up that you didn’t see coming until they hit you straight in the face?

In order to truly operate at the top, there are things that you’ll have to learn as you grow with your business. It may be uncomfortable, unnatural and very new for you, but you’ll have to learn how to delegate, trust, lead, set direction and tackle higher level priorities. You’ll have to lead.

Delegate and Trust

Transforming from the “you” to the “organization” can be difficult because you start giving up some control. And let’s face-it, it is hard to give up control when you have worked so hard and passionately to get to this point. But there comes a time that you can’t do it all anymore and you have to learn how to delegate and trust your employees.

Given that as you’ve grown the business and surrounded yourself with good employees, you can start to delegate less strategic parts of your own job to your employees. Trust comes easier if you train your employees well, set clear objectives and authority levels and are open and available when questions arise. You might actually be pleasantly surprised by how well they do.

Leadership and Direction

I can hear you again. “Oh, leadership and direction, sounds so corporate!”

Sorry but it’s true. It’s important for owners to transition from the daily grind and start to set the tone for the company about what it is, why it’s in business and where it’s going. Your transition from the day to day management into leadership will evolve over time as the organization changes and grows.

As the leader, you start to have a longer term view while setting plans, strategy and direction. Instead of accepting the status quo, you begin to challenge it, to look for a better way. As a leader, you become more proactive seeking out new opportunities vs. reacting to the daily business problems that the staff can handle. All the while, one of your main goals is to motivate and inspire your employees and managers to understand what the company is and why it’s in business and inspire them to follow the strategy you set.

Higher Priorities

Your growing business forces you to tackle even bigger priorities as you delegate the lower priorities. Your focus is broader and more strategic, concentrating on the overall operations as opposed to the individual tasks.

Instead of personally working on the job site, you’re securing, scheduling and overseeing the work of your employees. Rather than waiting on customers, you are working with suppliers to plan your store’s inventory more effectively. Where you used to do all the sales functions, you are now defining new potential revenue streams, new products or service offerings or creating new programs to enhance your sales team and marketing efforts. Where you were focused on bringing in good people, you’re now developing the people you have.

Working on your business becomes more important than working in the business.

If Your Business is Growing, You Need to Grow Too

Growing pains are true for owners as well. The challenges of your growing business bring changes for you too. As the owner, your own ability to cultivate people, set long-term strategy and direction and lead your company through a more challenging business environment becomes more important than ever before. While taking your business up a notch, don’t forget to take yourself up a notch.

It’s no longer about you; it’s about business you build.

Several years ago, I worked for a small company that was beginning to grow quickly. Our market started to catch some fire, sales were humming along and the company was trying to find ways to keep up with demand. We wondered if we had the “right people on the bus”.file7411246976734

It soon became clear that the people, who got us to $5 million in sales, might not be the ones to get us to $20 million.

The people who worked there had been there for many years. Everyone knew each other; it was almost like a family. Sales levels were pretty much the same year in and year out and the business hadn’t changed all that much. However, as the growth began to take off, the organization started to show signs of stress. Employees were working hard, but it was obvious that just working harder wasn’t going to cut it.

The company struggled to process more and more orders and other departments had to pitch in to handle the extra volume. It got so busy that the clerks from accounting chipped in to help the shipping department package and ship orders. It was great to see the way the employees pulled together and showed true teamwork, but it wasn’t necessarily the best way to get the work done. You see, the accounting department’s workload had increased too. Throughout the company, similar efforts to jump in to help continued and eventually became the norm. Since more and more people performed tasks that they were not trained to do, quality and efficiency eventually began to suffer.

To correct that, the company started hiring people to help keep up with the growing demand. Up until then the company only hired a few employees in a year, now they were hiring several a month. With no human resources department and only an office manager to handle the hiring and recruiting, the process was slow. The office manager was good, but she already had a full plate of job responsibilities and HR was not her main skill.

Meanwhile, the fast growth in sales increased the number of contracts being negotiated. Previously, the company had several long-term contracts and therefore new contract negotiations were periodic at best. Now, because of all the new customers, a new contract negotiation started every few weeks. When the volume was lower, the director of finance would work with outside attorneys to get help with the negotiations. With the dramatic increase in volume, the director of finance worked many extra hours while consulting with the lawyers more frequently. It was costing a lot of time and legal fees as well as taking the director away from her regular duties.

The examples above are some of the struggles the company faced as it began to grow. What was obvious is that some of the employees were stretched beyond their capabilities and in some cases taking employees away from their primary job function. When a company grows, its employees must grow along with it. In our company the growth created added volume and complexity but also the need for more skills and experience. Sure, we had to grow the number of employees in many areas to meet the new volume of sales orders.  But as business owners, leaders and management, we also needed to recognize that we needed  new skills and experience that we didn’t have so that we could continue to grow successfully.

Unfortunately, there are times when the people that got you to a certain level in your business, are not experienced or skilled enough to quickly carry you to the next level. The growth itself demands that some people become strategic and less tactical than in the past. Growth can also cause a company to bring in resources that it may not have needed when it was a smaller operation. Loyalty can sometimes cause an owner to follow his heart and not his head and as a result, they fail to bring in the talent and skills to maintain their growth.

Recognizing that your organization may have inherent limitations that are keeping it from realizing its full potential is difficult for many business owners, especially in the beginning. In our example, the office manager had been with the company for many years and the owner struggled with the prospect of taking the HR function away from her. It was not her area of expertise and in this new growth phase, she was not able to keep up without the right knowledge, experience and training. In the end, a dedicated HR person was hired to manage the explosive of growth in hiring, personnel management, training and other HR functions.

In the case of the contracts example, this was an area where someone working part-time with expensive outside lawyers no longer made any sense. Once again, the structure that got the business to $5 million was not able to get to $20 million and beyond. We decided that creating a new contracts manager position would help to manage the new workload. The move saved the company legal costs in the long run since the person was experienced and needed to utilize the attorney for only certain legal issues.

If your company is growing, you may find that what Jim Collins said in his book “Good to Great” resonates with you – As a leader of a company you need to think about “getting the right people on the bus (and the wrong people off the bus) and then figure out where to drive it”. In our case, certain positions were added to ensure that we had the right experience and skills best suited for our situation of fast growth, higher demand and greater business complexity.

In a growing business, it’s critical as owners, leaders and managers to recognize that as you grow, your staff, skills and expertise will have to grow too.  Make sure that your business hasn’t outgrown your employees.

First the Backstory

I felt compelled to write this post because of a very troubling story that I heard from a business colleague about leadership. 

My colleague, an outside consultant, was engaged on a project with a company where she was working with a group of women who were leads on a particular project. The women were assigned to this project by their employer because of their experience and position expertise. During the course of the project, they developed some ideas that my colleague thought were very good and should be brought to the attention of management.  The problem was the women were reluctant to talk with management. They did not see themselves as leaders and thought it was inappropriate for them to talk to management.

This situation could result from many factors including the culture of the company, the confidence level of the project leads, or that the women didn’t think that they could offer ideas to management because of the organization’s hierarchy.  No matter what the reason, this will hurt the company as these employees did not offer ideas for improvements that may help the company to better service their customers.

Action vs. Position

Why don’t people see that they are able to be leaders even though they are not officially titled as such in organizations? One definition of a leader is “one who influences others”. Donald H. McGannon, the former President and Chairman of Westinghouse Broadcasting Corporation was quoted as saying, “Leadership is action, not position”.

I’ve held several positions at companies over my career and I have seen leadership develop at all levels.  Not all people will be officially called leaders, but many people can take action and lead at various times or during a particular situation.  Time and time again if you look close enough in a work setting you can see certain workers take the lead, even though they are not considered leaders in the traditional sense.

Leadership at Many Levels

Take the example of an administrative assistant who sets the tone for the other administrative assistants in the organization. No one put this person in charge of the other administrators, but leading by example, being knowledgeable, demonstrating a collaborative work style and by her efficiency she becomes the recognized leader of that group, both by the organization and by her colleagues.

Another example is a middle manager of a core interface group in an organization who uses his skills to understand what other departments do, the challenges they face and the resources they require.  The middle manager begins to become an asset to the other departments by offering assistance, advice and guidance to help them work through their challenges.  He becomes known as a “go to” person that is smart and resourceful because he is armed with the knowledge, skills and ability to work through problems.  The middle manager was not the leader of these departments, but became a recognized leader in the organization.

I have also witnessed a situation where a middle manager who had unique insights into the operational aspects of the company, took those insights and highlighted inefficiencies that were detrimental to the long term profitability of the company. By explaining the problem to the executive leaders in the company in language they could relate to, this person was seen as making a valuable contribution and began to be recognized as one of the up and coming leaders in the company.

Leading by Example

We have also witnessed employees leading by example in organizations.  Whether it’s the employee who consistently arrives on time for work, the employee who completes assignments on time or the employee that completes his tasks accurately, these employees are leading by example and setting the tone for others in the organization.

Recognizing Your Leadership Ability

Let’s look back at the women in the situation I described earlier.  The women need to recognize themselves first as leaders of the project.  They must also recognize that they were assigned to be the leads for a reason; management believed that they were the right people for the job.  Once they realize that, they need to understand that they may be in the best position to highlight problems as well as suggest solutions to upper management. If they step up and make suggestions, the company may be able to make operational improvements critical to its success.

You can take a leadership role in a project, a department, an organization or even a situation.  All you need to do is recognize that you can, and then, take a chance.