In last month’s blog I outlined the common issues that entrepreneurs can face when scaling up their companies, especially on the staff management front. This month I’m going to look at the first of three ways you can start to shape the company and control the problems you might face as your company grows.
The three main areas to look at are:
- Organisational structure; and
To get us started, let’s take a look at job specialisation.
When you start out, everyone in the company is a “Jack of all trades”. For example, you might create your product or service, decide on the marketing, deal with payroll and manage the sales process yourself. This works fine while the business is small as everyone knows everything about the company. The need for communication or training is minimal and projects rarely need to be shared between staff.
As soon as you start to grow beyond a handful of employees, it becomes increasingly hard to add a new employee as getting them up to speed on everything they need to do is more difficult than the work itself!
What’s the answer?
Role specialisation will start to dedicate certain business functions to individuals and allow them to deepen their knowledge. For example, employees in technical support no longer need to read all your marketing materials, but they will know how to use the products inside out.
In my experience, two key areas to start with are the finance and customer support areas of the business. Support is very time intensive but can operate easily in isolation. It’s also sensible to have good financial control (in particular credit control) as early as possible within any business.
Functions such as sales, and to a lesser degree, marketing should stay within the directors’ remit initially as the they are generally the most familiar with the product, as well as having the most passion for the company which is key when selling.
As the company grows and more of your focus as a director needs to be put into strategy for the business as a whole, then these sales and marketing areas can also be delegated to specialised roles with the appointment of sales and marketing directors.
Don’t get bogged down
Ideally as a founder or CEO/MD you don’t want to get involved in the day-to-day operations of the business, unless it is crisis management. Rather you need to have a vision for where the business is going, a plan laid out on what you need each of your specialised roles or departments to do and to ensure that plan is executed properly. If you’re doing all the operation work too, then there will be no time to look at the bigger picture.
Specialisation can mean conflict
However, be warned, by dedicating people (and later on whole departments) to specific roles within the company you will create some additional complexity. There will be a need to share projects between departments, and this will potentially create conflicting views or agendas within the company.
These are good problems to have though and in future blogs I will go through some of the techniques you can use to manage issues such as implementing processes and introducing a well thought-out organisational structure for the company.
In next months’ blog I’ll go through organisational structure, how that changes as your company grows and what impact such changes might bring.
David Barker is technical director and founder of the green colocation and connectivity supplier 4D Data Centres.
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