Friday, July 29, 2016

SOP Friday: Organizing Your Management

As your business grows, you need to plan a few steps ahead. This is particularly important when you look at the overall structure of your company.

I know you've seen dozens of organization charts . . . and they all look somewhat the same. Still, you need to create YOUR org chart and then begin to make that vision come true.

As usual, most people don't think about the structure of their management team until they have a management team. As a result, they build something on the fly instead of creating something with intention.

There are two cold, hard realities that you need to address as you company grows. First, there's an absolute limit on the number of people you can manage directly. Second, the more of a control freak you are, the slower your business can grow.

Another reality (warmer and softer) is that the owner is the most important person within your company. That means the owner's time is valuable. The owner should not be wasting time doing work that can be farmed out for a small amount of money. The owner should also not be operating as the personnel department.

A few of these points are covered in this video, posted today:

How Many People Can You Manage?

The first big truth is that most good managers can manage fewer than ten people directly. In my experience is big corporations, education, and my my own companies, I know I can manage no more than 7-10 people. And the fewer the better.

It's not that people are hard to manage or that you get mired down in personal conflicts or anything like that. There's paperwork. There are reviews and goals and meetings. You have make sure payroll is taken care of. You also have to track vacation and manage time off and schedules.

And every once in a while there are conflicts and issues that need to be addressed.

Taking care of all that for one or two people is trivial. But when it grows to five, ten, or fifteen, then all this busy work takes a lot of time.

In a very small business, I think your first hire should be an administrative assistant (see a lot of my blog posts on this). Eventually this person will grow to be the Office Manager, handling the screening of lots of candidates and managing other administrative assistants you hire.

The next manager you hire will be your Service Manager. That person will run the service staff and manage the technicians. After than you might add a sales person. And if the sales organization grows, you might eventually have a sales manager. In this way, you staff can get to be fairly large and the owner only has a few "direct reports" to manage.

Don't Be a Control Freak!

When I started my first business I was afraid to delegate. Other people don't share my vision. They don't share my commitment. They don't have my mix of skills and pickiness. They do things differently.

I overcame all that in order to grow my business. Now I'm pretty much the opposite. When a new thing needs to be done, the first thing I do is find someone other than me to do it. Refusing to delegate puts an absolute limit on your ability to grow your business.

The other major limitation on your business is your willingness to let other people actually work for you. So often business owners hire people but maintain so much control that their employees never get to shine. Remember the lessons from Danial Pink's book Drive: Employees are motivated by autonomy, mastery, and purpose.

Hire good people and let them amaze you at how good they can be. You can let go of the reins gradually if you want to. But you have to let go of them eventually. When you find a really good office manager or service manager, you'll happily hand them authority.

It's always still your company.

Grow your company with intention and create the kind of culture you want. Hiring managers helps you do more, make more, and enjoy it more. And with the right managers, your vision can take shape must faster!

Don't worry if you don't know your limits. Eventually they'll reveal themselves.


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