If you are in the fortunate position of seeing your business grow to the point where you have more than 50 employees, there’s a good chance the grip you thought you had on it will begin to slip away.
There is a good reason for this.
It has to do with the human capacity for attention. Experts say it’s basically impossible to manage more than seven or eight people. I can attest to that. There have been times when I’ve had more than a dozen people reporting to me — and it was problematic. I was not able to stay on top of their work, and they knew it.
What you may do is spend more time with some of the people who report directly to you and ignore the others for long periods of time.
If your top people are ignored, you are not doing the best job of managing them. You are not provoking them enough, not keeping a close enough eye on their performance, and not giving them the feedback and support they need to be successful.
But even if you do limit your direct reports to, say, seven, you can still lose control when the payroll exceeds 50. Here’s what happens:
Your seven direct reports understand you and your vision. Their subordinates report to them and not you, but the size of your company is still small enough that they see and hear from you all the time. They know what you want even if their boss has different ideas.
But when your company grows to the point where the subordinates of your top people have their own subordinates, the connection to you is all but lost. So what do you do when you have 50 (or 100 or more) employees and you feel like things are falling apart?
First, you should open your mind to the possibility that you aren’t the manager you think you are. In fact, it’s possible that your business isn’t being managed at all.
As an entrepreneur, your attention has been correctly focused on growth and profitability, not management. Your style of leadership might have been formal or casual. Your frequency of communication might have been regular or impromptu. You might have been a nice boss or a bastard. It hasn’t mattered because the seven that reported directly to you adjusted themselves successfully.
Their subordinates made dual adjustments: to their bosses and to you. But now that there are so many employees, you have to find a way to make sure they all understand your business goals and your expectations of them.
For all you know, they are getting bad ideas and directions from their bosses. You can’t see it, because those managers don’t report to you.
So you were right to focus on growth and profits. But now your business is in a different stage. Now you have to introduce some level of formal management throughout the business… which may mean that you have to become a more formal manager yourself. That would entail focusing on three things:
- Controlling growth operations
- Managing maintenance operations
- Communicating your vision
Controlling Growth Operations
Every good-sized business is sure to have multiple operating parts – marketing, sales, accounting, customer service, product development and fulfillment, data collection, etc.
When your business was small, you could give short shrift to some of them. Now they are all important. None can be neglected. So which do you take on personally, and which do you trust to someone else? READ MORE
Every founder and CEO will have to find his own answer to that question. But for me, there are four I would give priority to: marketing, sales, product development, and customer service.
You want to stay on top of sales and marketing because you never want to be in a situation where you no longer know how to generate profitable front-end sales. The moment that happens, your business is in the hands of those that have that knowledge. And that puts you in the precarious position of submitting to all of their demands or risk seeing them leave and become your competitors.
You want to be in charge of product development and customer service because, next to having the ability to generate sales, the quality of your products and service are the things that have the greatest impact on the sustainability of your growth.
As the business grows, you will want to hire superstars to run each of those four divisions. But you will also want to know that the superstars you hire have the same commitment to your business that you have.
The other operations – data collection and management, accounting and banking, information technology and the like – are extremely important to the success of your business. But managing them takes a very different mentality than managing marketing, sales, product development, and customer service.
Marketing, sales, product development, and customer service are operations that grow your business. Data collection and management, accounting and banking, and information technology are operations that maintain it.
To grow your business optimally, you will need superstar managers to head up every operating division. But even when you find them, you want to be involved in those four areas on a daily basis so you can stay on top of current and future cash flow.
Managing Your Maintenance Managers
To head up your maintenance operations, you need to find people that are very good at the MBA-type management skills: setting goals, tracking progress, giving feedback, training, etc.
It’s easier to find people that are really good at these skills than it is to find people that are really good at the growth skills. But as an entrepreneur, you may find it difficult to relate to them. You may find them exasperatingly slow and methodical. They may seem borderline nerdy. These are not the people that you will be able to turn to for breakthrough ideas. But make no mistake. These people, if they are superstars, are critical to your business.
Remember, these are people to whom you will be giving your trust. Since you won’t have time to manage all of your operational teams, these are the managers that will be operating somewhat independently. You will be lucky if you get to meet with them once a week.
But that’s okay… as long as they not only have the right skills but are also 100% loyal to you and your business goals.
One of the most common mistakes entrepreneurs make when their businesses get to this level is to hire competent maintenance managers that don’t actually care about the success of the business. They care about being in charge. They care about producing impressive reports. But they don’t give a hoot whether you make a profit or not.
I can’t tell you how to know whether a particular manager is going to be loyal to your business goals. All I can say is that you will have a gut feeling about it within the first month or two. If your gut is churning, replace that manager with someone else.
Communicating Your Vision
If you want your employees to work happily (and you should), you have to communicate a positive view of two things: company growth and customer service.
There are many theories about what motivates employees. The trouble with most of those theories is that they are about employee satisfaction rather than employee productivity.
Mediocre employees have mediocre ideas about what work means. They want to be paid well for showing up on time and doing what they are told to do. For superstar employees, work is an opportunity to excel. But they want to know how they should excel. As founder/CEO, it’s your job to give them that direction.
And that means getting them to focus on two things: profitable company growth and superior customer service.
Profitable company growth is vital for obvious reasons. Superior customer service is important because it gives them a reason to be proud of their work. Communicating this two-fold vision should be done constantly and continually and in every way you can.
Once you trust that your superstars share your goals, trust them to design and execute the practices and protocols to achieve them. But hold them responsible. Stay in touch. Make sure that they feel rewarded – not just financially, but in terms of your admiration for the work they are doing to further the company’s goals.
Where do you go from here?
None of what I am talking about here is in favor of developing a formal corporate culture. The formality of your business as a whole is up to you. But the formality of the operations should be left to the people you trust to run them.
What you are looking to do is to build a team of superstars that care deeply about growth and customer service. If you can do that, there will be no stopping your business. Its growth will be a benefit to yourself, your shareholders, your employees, and most of all to your customers.
It’s not easy, but it can be done. And you can do it.
If you want to learn from my experience, I’ve laid out a path in my books The Reluctant Entrepreneur, Seven Years to Seven Figures, and Ready, Fire, Aim.
