There are times in the life of your business when it changes direction. It can be easy to miss the moment and find yourself looking back later thinking, “what happened?” It’s almost as if you were driving the train, when suddenly it hit the points and half the train went to the left, while you went straight on! We call these the ‘switch points’ in the life of your business.

The first switch point

The first switch point is when the business you set up grows up to become an ‘organisation’, with a life of its own. (You probably have around 10 or more employees, and are turning over somewhere around £1-5m). This ‘organisation’ needs to be managed and consolidated consciously to grow in a healthy direction, and it’s a healthy ‘organisation’ that will attract customers, reassure investors, and ultimately make your company a saleable proposition.

How will you know you’ve missed the switch point?

Here are some of the things you’ll notice when you look up and realise your business switched points:

  • You’re working harder just to stand still
  • Trusted people are demotivated and may leave
  • Differences over direction among the business leaders
  • Frustration and fingerpointing
  • You’re losing customers
  • You try rapid changes in policy – one week focusing on costs, the next margins, the next profitability!
  • Waste – processes, money, time, repeated mistakes

You’ll suddenly realise you’ve put up with all the above for several weeks or months. It’s time to shift your focus, from working ‘in’ your business to working ‘on’ its development as an organisation.

What should be happening at this stage?

Your business has moved from the first, start-up, stage of its development, to a second stage of implementing consistent management systems and structures. This is the era of management, and your job is to develop:

  • A second tier of management (who will in turn become leaders of the business)
  • A clear business vision and values
  • Effective planning and systematic goals
  • Durable processes and systems
  • Effective management and leadership skills
  • Great relationships between the leadership group and teams at the next level down
  • Team effectiveness – communication, role clarity and accountability
  • Motivation and ‘buzz’
  • Clear performance and behaviour standards

Your organisation has developed a life of its own, and it needs you to work on it, so that it goes in the right direction! An effective organisation culture doesn’t happen by accident. All the great, leading-edge companies out there have leaders who consciously decide where they are taking the organisation, and who manage this with as much rigour as they manage the financials.

In a follow-up blog post, we’ll look at the later switch point that occurs in more mature businesses…

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