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Building The Best Team Ever

 

Small business success usually owes a lot to the personal qualities of the individual or partnership that starts the business. Successful small businesses are started by entrepreneurial types who are noted for their drive, physical stamina, good judgment, positive attitude and their ability to turn over large quantities of hard work.

In the start-up phase, an entrepreneur might be carrying out every job a business has to offer - from writing a mission statement to taking out the garbage. When a business has a few team members, the CEO may still be able to monitor everything closely. While the CEO does not have direct contact with every aspect of the business, they can still have very close indirect control.

However, when your business reaches a certain size, say about 10 team members, matters simply become too complex for you or your founding team to keep track of. At this point you face a choice - to continue trying to run things directly, and risk spreading yourself too thin, or to adopt another management style.

Taking the first choice is actually a decision to limit the growth of your business. It means that your business will be run by a CEO who is overworked, stressed-out and likely to be making bad decisions, which is a recipe for disaster.

Taking the second decision used to entail setting up some sort of pyramid structure within the business - a hierarchy with the CEO at the top. Under this system, decisions would filter down from the top and be implemented by obedient employees. Layers of middle management would separate the CEO from the people who carried out day-to-day operations.

Over the last twenty years, this structure has gradually fallen out of favour. It’s now seen as a slow and inflexible way to run a business. It’s slow because it takes time for information to flow up and down the hierarchy and for decisions to be taken. It’s inflexible because the people involved in the detailed running of the business are remote from decision-makers and are not authorised to modify policy, even when it seems sensible to do so.

Another problem with this structure is that different parts of your business may fail to communicate with each other. For example, the marketing manager may have very limited contact with the customer service manager. For information to flow, it needs to go all the way up the chain and then back down again, with opportunities for misunderstanding at each step. This can be disastrous. For example, suppose that sales and marketing start making promises that the customer service people don’t know about or can’t keep.

Many businesses now favour a less hierarchical, team structure that is especially appropriate for small and medium-sized businesses. Middle management levels have been thinned out, with the management role being carried out within a team that has the skills and expertise to handle not only management issues, but also technical, marketing and customer service issues. Such cross-functional teams allow the different areas of your business to work closely with each other.

The teams can take some of the decision-making load off your back, as they have the collective expertise to consider all aspects of an issue and take broad decisions. Yet you may also have more direct contact with the day-to-day running of the business, because middle management ranks are thinner.

This team-based structure allows your business to play to its strengths and to be competitive against larger businesses. Small businesses can generally not compete with big businesses on price. They don’t have access to big business economies of scale. They don’t have a big business marketing budget or distribution network, so their market is generally narrower and more localised.

However, small businesses have an edge over big businesses in other areas. You may be able to offer a more flexible, personalised service and can react to changing circumstances more rapidly. You can offer clients direct contact with decision-makers. Clients who want products or services customised to meet their own specific needs are much more likely to get satisfaction if they deal with a small business like yours.

So running a small business on a team structure can maximise your competitive advantage. While you may not be dealing directly with clients, they can deal with a team member who has the power to initiate decisions that are well-informed, effective and carried out in a timely way.

You may find that setting up a team can be a problematic affair. It involves using or acquiring an unfamiliar set of management skills. It can also be emotionally difficult to step back and delegate, because effective delegation means giving away some of the close control that you would have had over your business. It means allowing your team members to use their judgment and discretion and being able to say, “Well, I wouldn’t have done it that way, but the result looks fine.”

A number of steps are involved in setting up a team. Firstly, you have to ensure the team has the right mix of skills to do a job. Team members must have the personal qualities that will enable them to work well together. It’s then necessary to help get the team up and running, and to make sure that clear goals and milestones are set, so that everyone will be working in the same direction. The team must then be guided through a phase where roles and rules are sorted out and possible interpersonal conflicts are managed.

You also need to know when to start stepping back and let the team function on its own and become productive. An appropriate level of ongoing reporting will be required. You also need to be able to spot signs that a team is going off the rails and know how to intervene. You will need the skills to be able to resolve issues and perhaps even disband or reconstitute a team.

You may be great at one-to-one interaction, dealing effectively with clients or individual team members. However, team management requires a different set of skills and attitudes. You must acquire and master these skills if your business is to grow.

Until next week,
Mike Reddy
www.syb.com.au