Gerard Burke, former director of the Cranfield School of Management’s Business Growth and Development Programme, questions whether you are actually the right person to take your business to the next level
In the early stages of a business, leadership often consists of leading by example, getting things done and personally winning the battle for the next customer. You’re happy to work long hours because this is your business, your success story.
As the business grows, leadership responsibilities change. You take on more staff, so you need to learn to let go of activities that you did yourself. You put in place some structures and processes, and you make the difficult transition to managing people, rather than things. By this time, the leadership skills required to run your growing business have changed.
However, few entrepreneurs have the range of leadership skills and the flexibility to adapt them in order to successfully lead the business from start-up, through growth to ultimate maturity. Most reach a point where their leadership skills are pushed to the limit, and often disenchantment sets in.
Sometimes new business opportunities are lost, or customers are disappointed and employees start complaining. To avoid this means taking time out from the day-to-day operations to examine what you want from the business in future. It means analysing your leadership and management skills, and those of your team, to decide whether the right people are in charge. Usually, it means handing additional responsibilities to more expert managers and spending extra time planning for the future.
Time to breathe
It takes a strong and honest entrepreneur to spot the cracks appearing in their empire, and then do something about them. Debra Charles’ business, which handles data processing and management for the transport ticket and energy markets, had expanded rapidly and was doing well financially.
“But employees’ morale was not high,” she remembers. “They felt over-worked and were taking more days off sick. There were also customer issues: work was not right the first time and our customers’ perception of us changed.
“What’s more, sometimes I was working 24 hours a day. I spent far too much time ‘under the bonnet’. I realised that either I would disintegrate, or both the company and I would.”
Charles, who participated in the Business Growth and Development Programme (BGP) in 2007, took a step back to look critically at her business. “I realised I didn’t have the right people around me who could help me manage the business,” she says. “I was intricately linked with the people I had started the business with, but when it grew they didn’t necessarily have the right skills to take it forward. I felt bad about leaving people behind.”
So she installed a management team and far stronger controls to track how the business was doing. “Now I can take a strategic and visionary role, and the management team runs the day-to-day business,” she says. “At first, you feel guilty if you are not there and hands-on, but now I feel far more in control.”
Charles has learnt the importance of stepping outside the business. “Physically remove yourself for a day a month,” she recommends. “Take a helicopter view of the company so you can see where it is going, what you’ve got and what you want from it. Take time to breathe.”
Facing tough decisions
Taking time out is a good opportunity to ask yourself some hard questions. As your business grows, are you the best person to run it? Can you lead your management team? Do you have the right management style and skills for the next stage?
The answers to these questions often lead to difficult and emotional decisions. Jon Thornes founded Cool Milk at School, which supplies milk to 200,000 schoolchildren, 10 years ago. Last year, he resigned as managing director and took on the role of chairman (see box). “I realised I couldn’t do it all myself,” he says. “It was difficult to accept, but I couldn’t lead the team. I didn’t have the right skills, or understand big business. I am very much a hands-on person and good at starting things up. But I’m a fiddler; I’m not good at running a team. I’m an individual player.”
Now he has appointed a new managing director, and is setting up a board, as well as bringing in an experienced non-executive director. “It was challenging to take the plunge,” he says, “but as chairman I plan to spend more time than ever on the company, focusing on strategy, acting as a figurehead and looking to Europe for new business.”
Getting the right team
The right leadership is critical. Spotting when it is not right is the key to future growth.
For Karim Sekkat, the crunch came when he realised his precision engineering group was losing big potential customers because it could not supply them in the lead-time required. Sekkat has built up KAS Technologies over the past four years from a turnover of £1.9m to £18m this year. But he wanted more; he wanted those large original equipment manufacturers as customers and he wanted to create a world-class business. But his management team thought he was crazy.
Standing down as managing director and becoming chairman allowed him time to assemble a new management team with the expertise and vision to take the company where he wanted it to go. “Now I have a new managing director, finance director and supply chain, plus sales team managers with experience of much larger businesses,” he explains. “It was a tough exercise. It’s easy to be tempted to get stuck in again, but you must not. Finding the right people is time-consuming.”
Sekkat is at ease in his role of strategic thinker, but even so, he found it hard to let go and rely on others. “The key thing is to be very critical about yourself and your company,” he says. “The big lesson I learnt was to find people who are better than me and to stop trying to be the king of the castle. You can only do so much in 24 hours. You need to re-invent yourself for the good of the company. It is a risky route, but it is the only route. Take a leap of faith, because if you don’t, the business won’t grow.”
Sekkat (a BGP participant in 2006) and his group received five awards last year, culminating in the accolade of finalist at the National Business Awards for Entrepreneur of the Year and Business of the Year.
Since 2001, Gerard Burke has helped over 1,000 ambitious owner managers create the future they want for their businesses and for themselves. He is the founder and managing director of Your Business Your Future, the UK’s leading specialist provider of development programmes for ambitious owner-managers. Your Business Your Future programmes are delivered in partnership with Cass Business School in London.