Last week I started a series that documents the journey a small employer takes from hiring their first employee to their 60th. I'm focusing on four stages of company size and the organizational structures, CEO priorities, staffing challenges, and key regulations that happen at each stage.
At this phase the primary business challenge is growing sales and managing cash flow. In fact, The CEO is also realizing that he or she needs more knowledge about financial and management issues than ever before.
During this stage the organization is still very CEO centric but starts to departmentalize. We see the first organizational structure with managers reporting directly into the CEO. The CEO begins meeting with managers on strategic and tactical decisions. More of the CEO’s time is spent in meetings and how to get the get the most out of the employees. The more the CEO delegates, the more they realize the importance of hiring the best people possible.
The ability to get through this stage depends as much on the CEO's ability to delegate and trust the new managers to carry out his or her vision. The organization is getting too complex for one person to manage it. We see many CEO's start to pull back decision making and company growth suffers.
On the staffing front at the later part of this phase we begin to outgrow a few people that helped us launch the organization. Letting go of these people will be very painful for the CEO, but getting to the next stage will depend on it. I like to think of the graph above as a series of walls. When you get close to the wall getting over it seems almost impossible. Many times that's because you lack a few key people that have been on the other side of that wall. It's at that point we have to examine our people, processes and systems and many times the answer is obvious, we just lack the courage to make the leap. As we continue to hire people it's still critical to hire people that are in synch with the vision and culture.
During this stage we also add two more regulations.
Tune in next week when we examine the next phase where delegating, managing and team building really heats up. If you need assistance with overcoming people and management challenges presented with growth call Rick Washburn or Tom Sheehan on our Advice and Resolution team.
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