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November 18, 2016

Challenge yourself: Are you in the right business structure?

Central connection business concept as a group of diverse ropes connected to a central rope as a network metaphor for connectivity and linking to a centralized support structure.

When you start out as a business you’re all things to all people. You’re the MD, the sales team, the support team and the credit control department all rolled into one hardworking, multi-tasking person.

But as your business becomes established and starts to grow, you’ll start to assess the different areas of focus in the company and will start building a business plan for how you want the business to evolve.

As you work through this process, you’ll quickly begin to realise that you cant do all these things yourself. And the way to resolve this is to start thinking about what roles are needed and what your organisational structure is going to be.

Put some real thought into your organisational structure

When your business begins to put down stable roots, you’ll soon find that there’s a need for specific roles with specific responsibilities within the company.

That means coming up with a comprehensive list of the roles you need in this organisation. It also means defining the role that you – as the founder and business owner – will play in the business. With those roles written down in stone, you can start building out a new structure and creating a proper hierarchy for the business.

It also means challenging some preconceptions. For example, just because you’re the owner it doesn’t mean you’re the best person to be the MD. Think about the skills you have: are they in sales, customer relationships or in administration? Play to your skills and put the best person for the job in the driving seat – it will work out for the best in the long-term.

Build your culture and management style over time

With a good business plan behind you, you’ll already have identified the different stages and priorities for the company over the next year.

Make sure that your recruitment plan works in tandem with your priorities so you’re hiring the right people for your management team, and doing it at a point that’s going to deliver the most impact at the right time.

You’ll also need to put some thought into the values and culture of the business, as this will have an impact as you grow. Is your culture going to be built on openness, transparency and collaboration between you and your managers? Or will it be more of a top-down structure with a very defined command and control process?

The management structure you choose will vary depending on the industry you’re in. A creative agency can benefit from an open, collaborative, democratic style of decision-making, whereas a manufacturing business needs a more authoritative command and control style, where specific people perform certain tasks and with set times at which these tasks happen.

And don’t forget that business culture can change as the business grows. You may start with a quite parental style and gradually move towards a more trusted, management style based on delegation and managers being responsible for their own sign-offs and budgets etc.

Don’t run before you can walk

Be cautious of not running before you can walk. Think about the development of the team that you’ll be bringing in and pace yourself.

When you bring in a new manager it’s critical to know why the role is important to the business and what that new role will entail – so make sure the job spec and core responsibilities are written down and tied closely to your business plan.

As a business owner, you must also be cautious of being too prescriptive with how the new role gets carried out. Allow a new manager to do the job that you’re paying them to do, and recognise that they may have a slightly different approach to you. It’s important to let go, place your trust in them and let them show they can deliver.

Learn to let go

Releasing your grip on your ‘business baby’ can be hard, but learning to let go of the right things is good both for you and the future of the business.

Make sure you know what your management style and culture will be before you start delegating. But once those are in place you can identify the areas you no longer want to be responsible for, or where your skills are least well suited, and where there’s a role for a manager to pick up the slack.

Bring in the people with the best expertise and experience and who meet the cultural values you’ve already identified. And once these people are ‘in role’ let them take ownership of these tasks and trust them to do it well.

It’s also important to develop managers from within the business. Identify the people in your team with the talents you need and work with them to help them grow and develop into new, or more senior, roles.

Let your future plans guide your organisational structure

The key to getting your organisational structure right is knowing your future plans.

Think about how you’re going to achieve your core goals and consider the competencies you’ll need to achieve this. You have to build a structure that’s aligned both to your business plan and to your core values.

It’s also worth recognising what’s scalable in the company and what’s not.

Be aware of the systems and processes that will need to be in place if you’re going to effectively meet your long-term goals. If you’re growing at pace, outsourcing some of your business functions may help you to meet those objectives, without having to invest in a bigger team. Areas like bookkeeping, stock control and website development can all be outsourced to experts – getting the job done, but freeing up your team’s time to on more productive, customer-facing work.

Think about your future business from day one. Get a clear idea in your mind (and in your plan) of what it will look like and the architecture required to get there. And recognise that your business structure will go through various iterations over time and that this structure must be fluid, flexible and will change and evolve.

Ultimately, no business ever stands still – so keep focused on your goals, recruit the right people and work hard on developing the skills and talent in the business to deliver the objectives in your plan.

If you’re looking to evolve your business structure and have some pressing questions that need answering, please do get in touch for a chat. 

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