The key to any successful business is who runs it. Up till now, this may have been exclusively you: the business owner.
But as the company grows, you’ll inevitably find it more and more difficult to manage all aspects of the business yourself. You’ve also probably found that you’re better at some roles than others.
To take the business forward, you’re going to need a team of managers with the right combination of skills. A winning management team can effectively plan for the future, as well as responsively deal with any challenges or opportunities that occur. You want a team who understand and care about your customers, but also know how to make a profit.
Building a great management team isn’t an easy task, but knowing what to look for and making careful, considered decisions will help you achieve it.
1. Work out what skills you need
The roles you need and the skills required to fill them will depend on the nature of your business. But as a general rule you’re going to need:
1. Someone with good people and leadership skills as a company figurehead. This person will take the strategic view and can delegate when needed.
For many business owners, the role of leader is one they adopt naturally. But if your skills lie elsewhere, or you want to focus on a specific area of your business, then it might make more sense to hire a CEO. This is particularly the case where entrepreneurs are good at innovating and want to spend more of their time on product development, rather than being caught up in the everyday management of the business.
Hiring a CEO is of course a significant decision and you’ll need someone not only with strong business acumen, but who is equally passionate about what your company does and with whom it is easy for you to collaborate.
2. Someone with an excellent financial brain who can look at budgets and forecasts. This person will have good reporting skills and attention to detail.
For some small businesses, the basic financial services provided by an accountant or bookkeeper might be sufficient for their needs. However, if you’re lacking in financial strategy and need someone to provide actionable information to inform your decisions, then it could be time to bring on a CFO.
There are also other specific situations which often require a CFO’s help, for example: you’re raising outside funding, expanding into new markets, experiencing rapid growth, or preparing for an acquisition.
A popular option is to use a part-time CFO, as many businesses need the direction provided by a CFO but can’t afford to hire one on a full-time basis.
3. Someone who manages operations for the business and is always looking for ways to improve.
Maybe your business has complex operations or you’re planning an expansion which will make them more complex. Or perhaps you’re finding it difficult to work on strategy and simultaneously oversee daily operations. In this case, hiring an operations manager can free up your time to focus on the bigger picture, instead of being bogged down in the details.
4. Someone who knows how to effectively market your company.
If you don’t have the time or expertise to develop your brand, position your products and get your messaging right, then you need to bring on a marketing expert, fast.
5. Someone who is great at selling your product.
Most start-ups have a problem generating revenue even if their marketing and brand awareness is good. Sales people are a very specific type of individual so you also need to know how to manage and properly incentivise them. Once you’ve got a few sales people and need someone to manage your sales process, then consider hiring someone to head up your sales team.
As we’ve mentioned, the level of skills required for each of these roles varies from business to business. You’re not always going to need (nor may you be able to afford) a C-Level executive. And as a small business, especially if you’re newly established, a few of these roles may be covered by the same person.
2. Work out what skills you have
Review your business’ current situation and look at your existing team. Who is responsible for which business area?
A good exercise is to write short biographies of your team - including yourself - and identify the skills that each staff member has.
This way you’ll know where your strengths lie and where there are weak points. You should then focus on addressing these weaknesses, and ensure that there is enough expertise dedicated to each critical business area.
3. Fill the gaps
If you’ve spotted a skills gap, think about the best way of addressing it.
Could someone in your existing team be a good fit for the role? Promoting from within gives you the opportunity to identify and evaluate staff with leadership potential, and if necessary, upskill them through training.
If it’s a shorter term task that you need help with, or something you only require expertise for periodically, then it might be better to outsource than to recruit a permanent member of staff.
You can also surround yourself with strong Board members (who will work for equity instead of salaries) and this can often bolster the team sufficiently.
There are lots of options, but don’t be afraid to hire in someone new with the skills your business needs. It’s good to have a mixture of internal and external hires. Diverse backgrounds with aligned goals is what you’re looking for.
4. Hire the right people
The right leaders will help steer your company towards success. Making the wrong hire at the highest level of the business, however, can have damaging consequences. Here are a few tips to bear in mind when you’re hiring your management team:
- We’ve already mentioned diversity. Hiring people with different experiences and backgrounds who can provide varying perspectives and ideas will help to spur your business’ growth.
- Look for previous leadership experience. It’s not always about industry experience or the level of expertise someone has in a particular area. For example, the best salesperson may not be the best leader of your sales team.
- Wait for the right candidate. If you haven’t found the ideal fit yet, it’s probably better to hold out till you do rather than recruit the wrong person. Most people knee-jerk hire when they’re drowning in work which invariably leads to the wrong decisions. If you’re struggling to find someone then get networking, broaden your job search, or try using an executive search firm.
- Culture is the most important thing with hires in a small firm. Use the interview to really understand who the person is. Find out what motivates them, how hard they work, and what their values are. Do these align with your company values? In turn, having a strong, well-defined culture will help you to attract and retain talent, so focus on defining and communicating this to your current and future employees.
5. Keep building and developing
So you’ve succeeded in getting the right individuals for the right positions – now what?
As you take a step back and hand the reins over to other people, you need to know that they’re delivering.
Make sure to set clear objectives, hold regular reviews to monitor performance, and provide training and development. Give your management team what they need to carry out their jobs well and consider ways of rewarding good performance.
Understand that your business’ needs will evolve over time and different skills will be required at different stages. Keep reviewing and addressing any skills gaps, so that at every stage you have the right team in place to reach your goals.
Finally, look after your people. Employee churn is extremely costly and often damaging to the culture. Create a high-performance team. The VC mantra is management, management, management, so make sure yours is the best.