Business strategy
Failure to delegate
Management
Is your business growth stuck ?
Caterina Valentino
The solution may be to change soft organizational factors
Despite a healthy working capital and a quick ratio measure , what ’ s is it that ’ s flying below the radar and preventing your business from reaching its next revenue target ? If it ’ s not money , what is it ?
It ’ s those soft organizational factors that , when bundled together , form the organization ’ s structure . And it ’ s one or a combination of these key organizational factors , no matter how solvent and ready the financial statements indicate the company is to grow , that can keep a company from gaining enough steam to actually grow .
Organizational factors include characteristics of the company ’ s human resources , the method by which an organization communicates , distributes responsibility and adapts to change . Organizational structure is the combination of all the organizational inputs that a CEO must manage if his or her company is to grow effectively and efficiently .
A company ’ s leaders need to model the business culture and design organizational dimensions that clearly establish the norms and roles that enable companies to grow . Therefore , when growth plans call for doing things that are entirely new , such as expanding into new geographies or adding a product line , it ’ s well worth the boss ’ s time to examine existing organizational factors to see if they ’ re sufficiently developed to support the new initiatives .
Here ’ s a look at three key structural factors that can quickly constipate a business ’ growth potential .
Business strategy
Structure follows strategy . If you don ' t know where you are going , no road will get you there .
Maurice Dutrisac , strategic planning and organizational design principal with Mastermind Solutions Inc ., a Toronto-based international firm specializing in business growth , states that the first place to diagnose stalled growth is to revisit the business plan . When owners lament that their profits are decreasing , competitors are taking away customers , employees don ’ t do what they ’ re told , and clients are difficult to deal with , that ’ s “ prime evidence that the company needs a new strategic plan , a new organizational structure and upgrading of employee skills and even hiring new managers with higher cognitive abilities — managerial and leadership talents — to address the complexity of increased growth .”
The next place an owner needs to look is in the mirror . To gaze directly into the reflection of their own eyes and ask , “ Mirror , mirror on the wall , how is my leadership and management style stymieing my company ’ s growth ?”
Failure to delegate
John Holland , specialist in sales , marketing and business development at Plutus Consulting Group in Burlington , ON , states that owners who don ’ t delegate , actually block organizational growth . “ The owner remains too busy and too involved instead of stepping back and saying help is needed .”
In many instances owners are blind to the fact that their management and leadership capabilities don ’ t match the demand of a larger and more complex organization . Holland notes , “ It takes a lot more training to be an effective manager of a larger organization .”
And , according to Doug Robbins , founder of Robbinex Consulting Intermediaries in Hamilton , ON , an international firm that specializes in helping owners of mid-sized companies with business transitions , executives are often blind to the fact that their shortcomings are reflected in the organization ’ s ability to grow and increase its company ’ s bank account .
No owner wants to admit that their skillset is holding back their company ’ s growth . When the demand for a company ’ s products and services grows , instead of stepping back and hiring help , Holland notes that some owners turn their focus inward . They hunker down and do what they know best : sales and marketing , while other key business activities go unattended , like payroll and interpersonal communication .
Holland , Dutrisac and Robbins concur that the best remedy to correct the near-sightedness of the CEO in an objective and productive way is to convince the boss to invest in assembling an advisory or integration board . That ’ s a team of professionals who act in the best interests of the company . The board provides an unbiased reality check on the company ’ s structural elements to meet the new market demands .
Robbins describes an advisory board as consisting of a good business lawyer , a forward-thinking accountant , a supplier that you can trust who maybe was a trusted customer and a friendly competitor .
The board meets in person or virtually on a regular basis , perhaps quarterly . It plans a one-day strategic planning meeting per year , perhaps at the start of the firm ’ s fiscal year . The focus of the strategic planning meeting is to examine the company ’ s past and present , and to plan for the immediate ( one year ), near ( five years ), and distant future ( 10 years ) performance . Board conversations revolve around discussions of target – what didn ’ t get done and why , surprises , good and bad news , and objective advice to the owner of what is required for the company to correct deficiencies and attain new targets .
16 | September 2018 | GRAPHIC ARTS MAGAZINE graphicartsmag . com