Starting a business and building it from the ground up is never easy. It’s a challenging and rewarding endeavour that takes skill, drive, and a fair amount of natural talent to accomplish, and even then there are never any real guarantees of success.
Those that do succeed in building a successful business, however, will frequently find themselves faced with another major hurdle that they may not have considered – the need to hire an executive management team to push their business to the next level.
The reason that confronting that hurdle is such a big deal in the life of a business is that it is the moment when the founder must come to grips with the fact that they can’t do everything themselves, and must cede control to others. Sometimes it happens due to the sheer scale of operations that the business reaches, and other times it’s because the business has outgrown the founder’s skill set and needs some new voices involved to continue to grow.
No matter the reason, though, choosing the right executive team can determine the long-term fate of the business, and be the difference between success and failure. For small businesses that are now approaching the task of building an executive leadership team, or aren’t sure if the time is right, here’s some helpful information on choosing the right time to act, what positions must be created, and how to fill them with the right candidates.
Striking a balance
For founders who operate as their business’s de-facto CEO, the first sign that it’s time to build a management team is the moment that they start spending more time overseeing day-to-day tasks than they spend planning the strategic direction of the business. Most of the time, that eventuality will coincide with the business growing beyond the number of employees that can fit into a conference room. Once that happens, it’s time to start building a management hierarchy that can handle the processes and communications necessary to support the growing workforce. Many founders will defer making the decision to do this until it is almost too late, which will only add to the difficulty and urgency of the task, so it’s always better to start recruiting management as early as possible.
Building a team
While there are no hard and fast rules on which positions to create when setting up a company’s first executive management team, there are some top-level positions that comprise most early-stage upper management. They include:
- Chief Operating Officer (COO) – Founders that intend to stay in the CEO role must have someone at their right hand to see to the day-to-day operation of the business. The COO position does just that. They measure, track, and manage everything the business does to deliver products and services and identifies ways to increase efficiency and lower costs.
- Chief Financial Officer (CFO) – As the name implies, a CFO will handle all aspects of the company’s finances. They create and manage financial controls and cash flow, and make sure that the business stays in the black while investing in its future growth.
- Chief Marketing Officer (CMO) – Although it wasn’t always an executive-level post, marketing has taken on enough importance in the digital age to warrant one. The CMO will oversee all aspects of business development and promotion, which drive the sales that are the lifeblood of the business. The job of CMO is also one of the hardest to define, and most difficult to succeed in.
- Chief Executive Officer (CEO) – The final position is the one that most founders dread considering. That’s because hiring a CEO means giving up control of the business they worked so hard to build. Still, it is rare for entrepreneurs to stay at the head of the business they build for long because the skills needed to build a business are often far different than the ones needed to grow one. That is why it’s so critical to select a CEO with the right mix of skills to get the job done right.
Selecting ideal candidates
Believe it or not, it’s not difficult to find candidates that have the right qualification and track record to fill management positions in most industries, even in a tightening labour market. That means that it’s vital to look beyond CV screening to find candidates that will be a good fit. Most of the time, the decisions will come down to company culture and strategic direction. When interviewing candidates, it’s essential to take it slow and try to get to know them, both face-to-face as well as through speaking to current and former colleagues. It’s also important to be direct and ask questions designed to make sure that the candidate understands and agrees with the business’s value system and overall goals. This is arguably the most important part of the hiring process, as nothing can disrupt a company’s growth faster than a culture clash between new and old employees.
Let go to grow
The last piece of the puzzle for founders who have built an executive management team is as simple as it is important: getting out of the way. It is critical to allow the new members of the management team to establish themselves and their authority and to support them as they assume control. This is a step that many founders (either consciously or subconsciously) chafe at since they’re used to having the final say on all matters. The best way to accomplish this step is to let team members know that you’re still available to talk, but that you won’t go over the heads of your new managers. Once that tone is set, the transition will be smooth and the business will be primed to enter its next stage of growth with the right talent – and the right structure – to thrive and expand.