Seven critical questions
Entrepreneurs start, organize, operate, and assume the financial risks of starting a new business. They are innovators who identify opportunities, generate solutions, and drive economic growth by launching products and services. Some entrepreneurs are satisfied with the early success and chose to focus on a steady business while others aim to grow the business.
Growing a business successfully requires entrepreneurs that master a blend of many skills. These will surely include a combination of leadership, ability to market and serve customers, operational resilience, team management, and financial acumen to achieve profitability.
After completing hundreds of consulting assignments for SME’s (Small and Medium Sized Enterprises) I can ascertain that the greatest of all these skills is the ability of entrepreneurs to skillfully take the organization through the various stages of growth. These stages will include several “seasons” like start-up, ramp-up and early success, delegation, operationalizing, people crunch and professionalizing, to finally reach a corporation with a strategy.
The ability of entrepreneurs to “shift gears” as they move between the various stages of growth is decisive. Each stage has its own characteristics, challenges, and opportunities. Successful entrepreneurs move from the role of doing to supervising, to managing, to leading. Business academia most often relates this to the skill of delegation, but my experience tells me that there is a need to go beyond delegation... the ability to be comfortable in entrusting people with parts of the business. The entrepreneur functions more as a coach, allowing team members to take the ball and run with it. Learning how to accept mistakes and errors in a constructive manner is also critical. Last but not least, the skill of knitting together a strong team whose members not only work well together and are committed to the vision and mission of the business but also evolve with each stage.
Two common examples come to mind. Discovering that the top sales person may not be the best Sales Manager or the loyal and dedicated Financial Manager may not be the needed CFO (Chief Financial Officer) are tough decisions to make. Knowing what to do is half the battle. Excellent execution is the other half. With this in mind, here are seven questions that can help identify if “gear shifting” needs some work:
- Are decisions made exclusively by the entrepreneur or owner?
- Are decisions made reactively or in crisis mode?
- Is there a formal organizational structure?
- Is there a formal strategic plan and updated annually?
- Is a financial budget used in alignment with objectives and KPI’s?(Key Performance Indicators)
- Is the focus predominantly on increasing sales with no internal strategy?
- Are financial numbers limited, not shared, and made available late?
Answering honestly these seven practical and down-to-earth questions will reveal what takes place in a company and can help identify what is needed to take the company to the next level of success. Just like in cars, an efficient transmission is crucial, shifting business gears is indispensable for healthy growth.
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