You had an idea and you grew it into a business; you tapped into your entrepreneurial spirit and made the leap into the business world. Or maybe you joined a start up and have been instrumental in its first shoots of success. All these things mean that you know that business, inside and out, and taking it to the next level and scaling up into more than just a start up or small business can be a risky decision.
As a business grows, the risks associated with the increased business activity become greater and more difficult to handle, especially if that growth includes becoming a limited company, trading internationally and recruiting more staff. How do you as founders, early management delegate responsibility amongst key staff effectively? Yet remain in control of the decision making process?
“Too big to rule” is one reason cited for Emperor Diocletian’s decision to split Rome in 305 AD, and that still applies today as a small business grows beyond its staffing means, this is the same decision that you, as the business owner / CEO, needs to make to make sure that your business can be prosperous with the right people delivering the required services to customers.
So are you able to relinquish control? This is your biggest risk, not being able to trust those employees with the specialist skills that have been recruited to take your company to the next level and instead hold them back in fear that you’ll have no power. When in fact, by allowing employees to make your business more effective in delivering its products or services, you’ll achieve more and watch your initial idea flourish further; gaining respect from your staff because you gave them the appropriate freedom to succeed.
However, in delegating and awarding responsibility further down the corporate ladder a new set of issues are created. Departmental power struggles can start to develop as they start to work towards different values, but this is where you, as the CEO can ensure that harmony continues to reign. Communication is key. It’s about opening channels so that departments and eventually, international entities, are able to communicate effectively and discuss strategies and ideas to fully achieve the best results. In other words, sharing best practice throughout the business.
What can you do to handle these risks as you grow?
- Recruitment is Crucial: The right people in an organisation are crucial to the right decisions being made and effective communication being achieved. So take time when recruiting to ensure that you find the right fit for your business and what you hope to achieve
- The Balance of Power is Key: The right proportion of power needs to be delegated down the ladder to make the best informed decisions on a day-to-day basis, however when conflict arises directors must be in a position to take power back and make the difficult choices
- Different countries means different cultures: If you’re trading abroad, consider the culture in the different countries you work with, so that when sharing responsibility with international entities you balance control with ability to succeed in those markets.
Businesses of all sizes, when growing can use company credit reports – like the ones available with Creditsafe – to help with their business decisions. It means that you are able to monitor customers and suppliers to ensure creditworthiness and continued ability to conduct business, as well as assessing new customers.
Did you know that you can also use business information providers to check out your employees too? So whilst recruitment is essential to growth, you also must make sure you are employing the right people who are there to help and not hinder your company’s success.