Everybody wants promotion but someone’s got to do the work

• “They all want a pay rise – but we’re not making enough money.”
• “Nobody documents anything – we fly by the seat of our pants.”
• “I never know what’s going on until it’s an emergency.”

Do you sometimes feel like this? There comes a point in an organisation’s early growth when communication seems to break down. It’s no longer small enough for everyone to know what’s going on by listening in on conversations, yet it is not a ‘corporate’ either, with layers of processes, resources and staff to run the operation smoothly.

You feel out of control and can’t keep your arms round everything that’s going on. People expect things like pay rises, bonuses, development and promotion, but complain if you ask them to document their work and be accountable for measurable results. You’re frustrated and your staff are starting to complain. What’s happening? Your organisation has grown up – it’s now a second generation company.

The prevailing mindset

Lisa is the MD of her family’s well-regarded and growing marketing services company. She has worked hard over the past few years to move away from the ‘all-hands-to-the-pump’, chaotic start-up phase of the company in the hands of her brilliant and entrepreneurial father, John. With the aid of her brother and co-Director Ian, she’s putting in structures and processes to systematise the running of the company. She has one eye to the future – she knows that if her family one day want to sell the business, prospective buyers will expect it to be run in a stable and professional manner, without the vulnerability of being dependent on any one individual with all the vital knowledge in his or her head.

However, some of her staff liked the cosy, informal feel of the company before Lisa took over, and they are uncomfortable at her emphasis on accountability, management structure and results. They complain they aren’t getting enough money and one or two of the younger staff have an eye on promotion. Yet they still resist the changes, which they feel are too ‘corporate’, preferring to do things in the old, slightly haphazard way which meant nobody felt too on the spot when things went wrong. Lisa feels unsupported, and as if she can do nothing right!

A two-part model of organisations

Lisa’s staff have two basic perceptions of ‘an organisation’. On the one hand, there’s the cosy, ‘family’, slightly chaotic, first generation (1G) ‘start-up’ where everyone feels vital to the business and a sense of achievement and belonging. On the other, there’s the ‘big corporate’, in which (in their perception) an individual is just a cog in a machine, and fun, innovation and self-expression are stifled. Lisa’s is a marketing services company in an industry in which most of the players fit the former picture, and it’s this chaotic but fun and creative image which has attracted them to work in this family business.

Many people’s picture of any organisation larger than a start-up is based on years of being in school and maybe college, and of reading about big third generation (3G) companies in the news, where the big stories tend to be about bonuses (especially in recent years!), promotion and huge salaries.

This leads to assumptions about the way organisations work which give rise to the problems Emily and her staff are struggling with:

• After a year or so I’ll get a salary increase (they always seem to in the stories I read in the papers!)
• After a short time in my first job, I’ll get promotion (I got one every year at school!)
• My job is my opportunity to express myself and learn the things I need for my CV.
• My boss is there to a) tell me what to do and b) to look after me.

A different kind of organisation

But in the middle, between the 1G start-ups and the 3G corporations, there’s a third possible type of business – the second generation (let’s call them 2G) organisations. These are small to medium sized enterprises (SMEs), and in the UK at least, account for more than 99% of all business and employ over 12 million people. It’s a very wide definition: if your business is an SME, according to the EU definition, it will be turning over anything from £2m to £50m and employ from 10 to 250 people.

Even some well-known household names – one very well-known globally known property services company for example – have many of the characteristics of an SME, because of their values and the way they are structured into smaller units.

2G organisations need to be structured more than start-ups, but this doesn’t mean ‘corporate’ structures – in fact people moving to them from ‘corporates’ very often fail precisely because they over-structure and over-engineer the organisation. It’s this 2G type of company towards which Lisa and Ian are working, and they will probably never choose to grow beyond it.

If you are one of the many business leaders who resist structure because you associate it with being ‘corporate’ – maybe you even left corporate life to get away from what you perceived as too much structure and control – you may be in danger of throwing the baby out with the bathwater! And if you are an employee who came to a smaller organisation because you thought it would be all about informality and fun and nothing else, then you’ll need to think again!

A more productive mindset

The 2G company doesn’t need the full raft of corporate structures to work well – for example it won’t usually have full-time internal service departments like HR, Finance, Marketing or IT, instead using the services of part-timers, agencies and external suppliers. This will come as good news to Lisa’s staff, who fear the rigidity of a corporate environment. But it will still need some basic structures and ‘rules’ to make it work, and it helps a great deal if everybody understands and accepts this.

If they let go of their resistance to change and are willing to learn and comply with a few simple rules, the organisation will run more smoothly and Lisa will have the support she needs. Once everybody has this basic understanding, they’ll all feel happier, and they can get on with having fun with each other again!

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