In the early days of building your business, your team is made up of loyal lieutenants who are in the trenches with you. Everyone does everything because there is no ego, there may be no tomorrow and there definitely is no timeclock. These hard working generalists believe in your mission and are excited to be part of the team. And, in the hectic first years of building a business, everyone–including yourself–is drinking from the firehose, working 100 hour weeks and doing whatever it takes to fight for the cause.
It’s inevitable, however, that yesterday’s dream team will one day no longer be able to keep up. Getting to $10M in revenue with this loyal base of early adopters is one thing, but scaling a business to $50M or $100M is a whole ”nutha level”. With massive growth, you need systems and processes to streamline the workload. And you need the right team: people who have experience building a company at this level.
This is where it may get tricky as to how the initial “dream team” can be incorporated into future planning. It is usually more art than science! You may need to recruit a game-changer who will build the infrastructure to match your company’s vision for growth. You may need to add strong leaders in key parts of the organization. Smart CEOs know that the magic bullet for efficient growth is talent. Getting the right people in the right roles at the right time can amplify growth like nothing else.
There are many areas of your business that you’ll need to assess when you are ready to take this next step of growth. But we consistently see three. No matter what industry you’re in, no matter what your geographic focus is, and no matter how special you think your snowflake is, you will likely have challenges in these three areas. Listed below are a few signs that it’s time to make changes to your team if you want to take your business to the next level.
Finance and Accounting
This is one of the most often neglected areas and is the first one replaced if you are working with a private equity firm. You’ll probably need to make changes to your finance and accounting team when you see any of the following:
- Your CFO or Controller (or whatever other title you have bestowed upon your lead finance and/or accounting person) is working 100 hour weeks, doesn’t seem to be able to delegate and doesn’t seem to be able to keep up. These are sure-fire signs that they are overwhelmed.
- You need more than just scorekeeping (accounting). You need to be able to look forward, project ahead, conduct what-if analyses and make decisions (finance).
- You need to begin investing in your business, planning and managing for debt or equity capital and working with capital providers.
For high-growth companies, this is an area where we consistently see the need for leadership to build systems and processes in order to truly scale. You will need to make changes to your operations team works when any of the following is happening:
- You have multiple direct reports on the operations team. You may even feel like you need to manage (or micromanage) everybody on the team.
- You have to be on every call or cc’d on every email, or otherwise need to be a part of the conversation.
- Things aren’t happening as fast or as effectively as they should and everyone (including yourself) feels frustrated.
Strong sales can mask other organizational issues in the early stages of your business evolution. We often see challenges at inflection when it’s time to build out a sales team or build a sales engine. You know you need to enhance your sales team when you experience any of the following:
- You put your best salesperson in charge, but they have no managerial experience and no sales leadership experience. They are not succeeding in their new role. In fact, the business is struggling on two fronts because they no longer have time to sell, so their personal sales numbers are way down or non-existent.
- The sales team doesn’t have the sales process or systems (sales management tools, CRM, etc.) to be successful. And / or the legacy team is struggling with the new accountability structure. In the past, a few guys and gals just worked hard and sold a lot, but that doesn’t work when it’s time to scale.
- The sales team doesn’t have the marketing collateral (case studies, white papers, etc.) to be successful. The existing sales team is successful because of the heroic efforts of a few but that doesn’t scale when you bring in new members from the outside.
The solution to these challenges is often the same: hire people better than you in these functional areas. That doesn’t mean that you aren’t smart and talented or that you need to bring in a new CEO. It means that your strengths are better utilized in the key parts of the business that only you can do. Your strengths are more likely needed crafting the company’s overall vision, weighing in on future products or maintaining key strategic relationships.
If you feel like you’re needed on a daily basis doing anything in finance and accounting or managing the department, or managing the sales team or operations function, then it means you have the wrong team.
Hire strong people who complement your skillset and can lead and manage those functional areas better than you and you will enjoy your role much more. And if those key hires are strong leaders and managers and have experience successfully growing teams through this growth curve, then your company will be set up for growth.
As you set out to make these key hires, keep these three things in mind:
- Just because a candidate has sexy names like GM or Amazon on their resume, doesn’t mean they’re the right fit for this stage of your business. Make sure they have experience in building a business in the $10M to $100M mark if that’s your next phase of growth. Fortune 500 experience is WAY DIFFERENT than high-growth, middle-market experience!
- You don’t necessarily need to fire anyone from your existing dream team. Certainly, there are times when terminating someone is the right thing to do for them and the organization, but not always. Some of those early stage lieutenants are better suited as individual contributors than managers. Put them in a place where they can shine and your business will reap the rewards.
- Be very careful hiring the friend-of-a-friend or the “awesome” person who is between jobs and was recommended by one of your advisors or investors. Just because that candidate is “great” or “you gotta have this guy” or “I would hire her again in a minute” doesn’t make them a fit for you and your company at this stage of growth. It doesn’t mean they shouldn’t be considered; it just means that you should run a full search process and include them in it.
At HireBetter, we specialize in working with high-growth, middle-market companies. While we may not have seen your specific situation, we’ve seen dozens − if not hundreds − like it. We’ve seen the patterns and we can help you see around the corner and navigate these growth challenges. Contact me at Kurt@HireBetter.com and let’s begin a discussion.