organisation change

If you’re very close to your business, it’s easy to miss the key points in its development – you only notice looking back months or years later that something has changed. Here are the signs to look out for and how to adapt most effectively to the change.

There are two key points in the development of organisations. The first is around the £1m – £5m turnover mark, when there are 10 or so employees, and the second is around the £5-10m+ turnover and 30+ employee mark.

It’s at this second stage that your business moves out of the ‘consolidation’ phase. This is when the focus of the leadership group needs to move away completely from day to day operations: they need to become Directors, with their focus on strategic, financial and legal issues – and the second tier of management needs to take over the day-to-day running of the organisation.

Recognising the signs

It’s important to know when you’ve reached the second stage, because you can help your business to remain focused and successful if you manage the transition properly. Here are some of the key signs to look out for:

  • The Directors still do most business development, trouble shooting and conflict resolution
  • The second tier of management gets frustrated if you remain too ‘hands-on’; they are itching to get on with managing the organisation
  • There is little or no business planning, or resistance to the process, and no accountability
  • There are no obvious future leaders in place
  • ‘Silos’ develop, and there is finger-pointing and blame
  • There’s a narrow focus on one or two areas of the business ‘scorecard’
  • People ‘go through the motions’ with performance appraisal
  • People talk about ‘the old days’ and complain about bureaucracy

What should be happening instead?

This is the time in the life of your business when you must become a Director, transferring ownership and accountability for the development of the organisation to your second-tier management, and letting them get on with it! Too often organisation leaders stifle the life, initiative and motivation out of the people below them. Now’s the time to delegate day-to-day work and instead provide:

  • Clarity of purpose
  • A clear organisation structure, with clearly accountable departments and roles
  • A unified culture, based on effectively communicated values
  • Rigorous measurement and management of performance
  • Effective business planning across the full breadth of a balanced ‘scorecard’
  • Continuous improvement
  • Succession planning, developing top performers and future leaders
  • Recognition and reward for great performance and effort

In phase 1, ‘start up’, everything is about ‘doing’. In the next phase, ‘consolidation’, you and your teams need to learn to ‘manage’ and ‘do’. In phase 3, you leave the ‘doing’. Now you must both manage and learn how to direct managers in your business. You must get to grips with the ‘corporate’ bits – roles, responsibilities, departments, specialist functions and specialist people – some of which you might not immediately know how to organise and manage.

Take an objective look at your business

Being very close to the business, it’s quite easy for you to miss the key points in the organisation’s development, and only notice looking back months or years later that something has changed: issues to do with the ‘organisation’ – people issues, underperformance, conflict – are impacting your ‘business’. There are ‘cracks’ in the organisation which will ultimately compromise the effectiveness of the business and reduce its value.

But, if you spot the key symptoms in good time, there’s a lot that can be done to avert the problems they can cause. Give us a call on 01865 881056 or email us at info@leaderslab.co.uk – we can talk you through the lifecycle of your business, help you identify what’s happening and coach and train you in the skills you need to handle it.

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