MASTERCLASS:At a certain stage, small businesses need to expand their management team, but the process is a difficult one
THERE IS huge satisfaction in seeing a small business grow. But growth brings its own challenges, not least of which is learning to spread the management burden. At some point the owner-manager of a growing business will need help to run it. So begins the formation of a fledgling management team.
Much has been written about the complexities of building and managing teams, but for an SME at the beginning of the process the advice is keep it simple. “Target someone you already know to bring on board,” says organisational development specialist and consultant psychologist, Gerry Fahey. “You will have an idea of their style and personality and a good sense of whether or not you can work with them. There are too many pitfalls associated with advertising a position and structured interviews are prone to bias. Most owner-managers seem to be intuitive about identifying suitable candidates and should trust that.”
“If you can’t identify someone suitable from within your own contacts, reach out to your wider business network and tell people you are looking for someone,” Fahey continues. “It is not necessary to have the role completely nailed down in advance in an SME because managers in small businesses tend to multitask. You’re going to need someone capable of doing more than one thing.”
One of the fears associated with developing a management team is choosing the wrong person. “Yes it happens but you can reduce the odds if you’ve done your homework on the person,” Fahey says. “If it goes wrong it may ultimately be necessary to take the tough decision and let this person go, but in an SME context it is often possible for an owner-manager to control someone more effectively than in a large organisation.”
One of the main reasons to recruit a new team member is to share the burden. This sounds simple. In practice, owner-managers find it very difficult to let them. Employing someone at senior level is an exercise in trust. The new recruit has to be allowed to shoulder the responsibility and be left to get on with it.
“I know how difficult it is to bring someone new into your business,” says Enterprise Ireland mentor Raomal Perera. Perera is a serial entrepreneur who has set up three IT companies and is currently visiting professor of entrepreneurship at INSEAD business school in France. “Owner-managers are usually passionate about their business and are scared of letting go. There is a natural fear that the new person will not nourish the business in the same way.”
Perera says one of the ways of minimising the potential for difficulties with team management is to ensure that “the values and interests of the person you are hiring are aligned with yours. If they’re not it’s not going to work and you need to tell them to get off the bus,” he says. “You have to be crystal clear about your vision for the business, to know what role your initial management team will play in progressing this and to communicate your expectations clearly. This reduces the possibility for misunderstandings and for bad feelings as a result.”
Another key benefit should be better decision making. “It is healthy to have someone else challenge your decisions or reasons for doing things a certain way,” says Fahey. “This may introduce some conflict but will be productive if managed correctly. By this I mean the team leader needs to make it clear that conflicts should be about business issues not about personalities.”
The aim of building a team is to reach a goal, usually the growth of the business. The size and scale of the aspiration will dictate how big the team needs to be. “In a small company the most important thing is to pick people whose skills support the business strategy,” says Perera. “You also need to pick people who are flexible and willing to do whatever it takes. You can’t really have strict job definitions like you can in bigger companies. You also need to be sure that the person can do the job without needing the support of an army behind them. I think the first hire at senior level should complement the owner-manager’s skills.”
Entrepreneur Bernard Flynn has already set up and sold a number of businesses. His latest venture is corporate giftware company Mullingar Crystal. “For a small business, taking on someone new, particularly in a senior position, can be daunting, but it need not be. Once you have established the need and the budget, get professional help to recruit. This could be in the form of an agency or a specialist to help at interview stage. Two heads are much better than one. Always, always check references by phone. Employers will not put ‘bad news’ on paper.
“You need to have clear goals: what do you want this person to achieve for your business, what is the time frame to achieve these goals and how will they be measured in a clear and precise way. Don’t expect your new person to be a mind reader. There needs to be plenty of communication and let them know if you are happy or unhappy. I’d also advise giving people some rope. You now have a new head with which you can share problems and come up with solutions. The right approach can bring your business on while at the same time giving you a better quality of life.”
As teams grow so do the challenges of managing them. “When your company’s structure is reasonably flat and people are pretty much on the same level, it’s easy enough,” says Mary Harrison, founder of the training consultancy Optimum. “It becomes more difficult when the structure becomes more hierarchical. Even with the best will in the world difficulties can arise around promotions and those who are used to working for the owner-manager may not want to work for someone else.”
Harrison also says that bringing a new manager on board is not just an in-house issue. “It may affect your clients so you have to be careful about how you introduce the new person, especially to clients who only want to deal with you,” she says.
Top tips for selecting your back line
-Choose someone you have some knowledge of, directly or indirectly.
-If you're nervous about interviewing ask someone with experience to sit in.
-Look in-house first. Is there an individual with potential you could groom?
-Be cautious about employing friends or family. It's natural to assume they can do the job but not easy to ask them for the evidence.
-Go for individuals with easy personalities who will get on well together. Avoid "prickly" types who are likely to rub others up the wrong way.
-Try to choose someone who shows an independent turn of mind and who will give you a different perspective on things.
-Select people who appear open to new ideas and are willing to do further training.
-Accept that change may introduce conflict but keep the disagreement focused on issues not personalities.
-Choose people who will add something new to your business and whose input will complement existing competencies and talents.
-Avoid duplicating skills.
-Ensure your goals, objectives for the business and how you intend to achieve them are made clear.
-Spell out your expectations for your team and set a timeframe for the completion of tasks.
-Support your team. Give them what they need to do their jobs.
-As new members are added to the team it becomes essential to put things on a formal footing. Define roles and responsibilities within the team; open and maintain good communication channels; set up a system for dealing with problems.
