Fast-growing companies that are “scaling up” are exciting, however they can encounter “tough reality checks” along the way.
These types of companies are the subject of an excellent book “Scaling Up” by Verne Harnish.
In “Scaling Up”, Harnish made the comment, “Few companies successfully make it to complete the scaling up process.”
Harnish identified that the key to successful “scaling up” of a company is:
Each team member should have a written summary of their duties and responsibilities with particular emphasis on the leadership team members.
One of the problems that fast-growing companies encounter is that some of the leadership team members may not have fully accepted or understood their defined duties and responsibilities. The CEO needs to be aware of this and have conversations with the leadership team members to ascertain whether they are “switched on”.
“People” also refers to directors. The concept of a company having directors commenced in England about 500 years ago, for the important purpose of having a group of experienced business people being able to give advice and suggestions to the CEO.
Companies that do not have a properly structured Board of Directors (normally more than 1 or 2 people) are finding that the formation of a Board of Advice can enable the CEO and leadership team to gain input from experienced independent business people.
Bankers and lenders gain a degree of comfort from knowing that the sole director is not all alone and is gaining input from some experienced business people and advisors.