It’s not uncommon for everyone to report to the owner in a fast-growing small business… but it sure does cause a lot of problems. Building a leadership team can alleviate those problems.
The problem that occurs when there’s just you leading everything is that everyone who has a question has to go to you, and of course, they probably have to get in line. You don’t want people waiting to talk to you—those minutes add up to hours and that means dollars in the form of pay going out the window.
You may be a well-liked manager, but you also want to be sure that you’re not a clogged cog in a convoluted wheel of people trying to get answers about their daily work. That can make for a lot of employees who are frustrated, demoralized, and fighting among their leaderless selves. Not to mention the slowed work and missed deadlines.
That was the case with adhesives and foams manufacturer, Harley Parker. When he hired us to help uncover the source of too many missed deadlines and too many errors in his 85-person company, we started by interviewing employees in an attempt to isolate the source of the problem. As we talked with employees in the various functions, it became clear that employees were fighting among themselves and morale was low—both as big a problem as the too-high error rates.
Another interesting fact emerged. Everyone, it seemed, reported to Harley. In addition to the usual support functions (HR, accounting, marketing, etc), three nice and clearly delineated operating units existed but when we asked who headed each, Harley answered, “I do.” “Who do all the employees report to?” we asked. “Me, I suppose,” he answered. Harley had 83 direct reports. The company had grown quickly and with Harley’s eye focused on bringing on the latest new customer and getting product out the door, as people joined the firm, Harley was their ”default” manager. At least they all worked in the same building!
The first and most impactful goal was building a leadership team. We quickly set about talking through who would be best to be the leader of each business unit. With Harley, we identified people with leadership potential, met with each candidate, let them know we saw them as a leader and that, if they were interested, they would be part of a new leadership team.
Within a month of our first meeting with Harley, we began having regular weekly meetings with the new leadership team. In those meetings we walked the members through how to structure and organize their units. Each new unit head began meeting regularly with their key people. Four weeks later, Harley arrived at his weekly coaching session with us and said, “On my drive to work I was wondering what I’d spend my time on today. That’s a first!” In that short of a time, the leadership team had taken on the running of the day to day. Instead of dozens of questions and decisions and interruptions each day, Harley had just a handful of issues to make decisions about each day and that left him with time on his hands.
Harley began spending time on things that business owners should be spending their time. Things like studying financial reports and creating a budget. Now that he was running the business instead of drowning in it, he had the eyes, mindset, and time to see an opportunity for overseas expansion that he would’ve missed without a team in place to do the running of the company. Building a leadership team paid off big time for Harley.
Worried that building a leadership team will cost you big bucks?
If you worry that you can’t afford the high salaries of senior leaders, it’s important to know that when you appoint someone into a leadership role, nothing needs to change in terms of compensation. Initially all you’re doing is calling people out to be the leader. These can be people at their current salaries who love leading and are good at it. In fact, you wouldn’t want someone in a leadership role who only took the role to get a raise. Its more about recognition. You can always create a bonus program based on gross profit or net income; then you’re paying them more as the business earns more. Later you can adjust salaries when the company is producing enough profit to increase their salaries.
Do you have potential leaders in your company who could help you run the day-to-day operations? We can help you identify them and get your leadership team up and running. Even if your company only has 10 employees, building a leadership team is imperative. Even if your team is you and one other person, building a leadership team is something you can do today for the long term health of your company, your employees, and YOU.