Unfortunately, some businesses commence with a great flurry of activity and quickly build up to turnover above $30 million and about 70 employees, then things seem to go wrong. Why?
Running a business is not a sprint – it is a marathon. A marathon requires a high level of fitness, preparation and endurance. Businesses have similar requirements.
The immediate problem is to have an awareness of the “life-cycle of companies” and to appropriately plan the four key strategies:
Companies must be able to attract and retain talent – this is the “PEOPLE” issue.
“STRATEGIES” are very important – they need to be thought out in a team environment and documented.
But “PEOPLE” and “STRATEGIES” are useless on their own, if there is not a clear plan of “EXECUTION” that relates to every aspect of the business, with all responsibility not coming back to the CEO.
“Execution” requires delegation of responsibility.
As companies grow, they require more and more “CASH”. There have been instances where companies that are trading profitably have ended up in great difficulties, because they run out of cash!
The journey of implementing the vision for your company requires a commitment to “CREATING EFFECTIVE FOUNDATIONS”. This journey can be very exciting, but it is very rare that success will be achieved as a “one person effort”.
Successful entrepreneurs create Leadership Teams and empower those people to lead the team members to implement the “STRATEGIES”.
The CEO ensures that there is adequate advice available by appointing Advisors and Directors to advise him/her on the “growth journey”.
Are you interested in having a discussion about setting the parameters for your company to successfully grow? Towers Business Development can assist you.
Companies do not run themselves and running a fast-growing company effectively is not a “one-man-show”.
Systems which are often known as “Drivers” need to be put in place, to ensure that everything does not depend on one individual.
It all starts with the labour team. The first group to be identified are the Leadership Team members. These people should be chosen on their skills and their work aptitude. Virtually everyone needs ongoing training and mentoring to be able to perform a leadership role in a fast-growing company.
Each Leadership Team member should be involved in a skills matrix examination, to identify the areas in which they are competent and the areas that they need additional training or mentoring.
Care should be taken in assembling the remainder of the team members, by also assessing their skill levels in a range of activities, in order to implement a suitable training program that meets the needs of the team members.
The company also needs a Board of Directors or additionally a Board of Advice. Whilst the Board of Directors has guidance on their duties from the Corporations Act, there are no legislative requirements relating to Board of Advice appointments.
Besides the legislative responsibilities for Directors, their key role is to appoint the Chief Executive Officer and to then to assist the CEO and the Leadership Team in performing their roles.
These items are the first segment of the “Key Drivers” which will contribute to the success of a company. If these drivers are not implemented, it can lead to serious problems as the company commences to scale up its operations.
Towers Business Development can assist you with strategies for your company.
Fast-growing companies need to implement a number of “key drivers”, to ensure that the company doesn’t get into financial difficulties because of “over enthusiasm”!
The key role is to discuss the importance of a “rhythm of meetings” within all segments of the company, so that the Directors/Advisers have an understanding that a regular sequence of meetings is being conducted by various groups in the company as often as daily, weekly and monthly. This will provide the team members awareness of their roles within the organisation.
The Directors/Advisers will be interested in the potential risks that could affect the company’s performance and will be asking questions about strategies that have been implemented to minimise those risks.
Another key area for continual review is the financial performance of the company on a monthly basis, with a review to the annual Budget and an analysis of the variations both within the Profit and Loss account and the Key Performance Indicators (KPIs).
These items are the first segment of the “key drivers”, which will contribute to the success of a company. If these drivers are not implemented, it can lead to serious problems as the company commences to “scale up” its operations.
“Scaling up” can apply to a company with a current turnover of $1 million aspiring to have a turnover of $3.5 million in two years’ time; or a company with a current turnover of $5 million that envisages a turnover of $20 million in a few years.
It does not matter what the current turnover is. As companies attempt to increase their turnover, many will start running into problems. These problems can be minimised if the “key drivers” have been appointed or implemented.
Would you like to find out more about how to improve the probability of success in your company?