The foundation for Canada’s prosperity today has been built on its many small businesses. It’s no secret that the last decade many provinces have seen high growth for all sectors, with investment at unprecedented levels. It’s an exciting time to be a business owner. As a company scales up however, it’s important to remember that its leadership must match its growth; this can be its most pivotal challenge.
Paul Martin, Saskatchewan’s leading business commentator, has seen the ways in which small business owners wrestle with the sometimes paradoxical nature of growth. He describes the experience of the high-growth small company CEO with one word: “Consuming. Exponential growth consumes time, capital and talent.” But while securing the talent to work in their businesses is one challenge often mentioned by leaders, they don’t always realize it when their business is outgrowing their own ability to manage all of its facets, says this TEC Chair. “Owner-operators experiencing rapid success often don’t appreciate that they can no longer manage the day to day of the business the way they used to. And the primary casualty of trying to micro-manage is big picture thinking. Suddenly they don’t have time to be strategic any more. And if leadership is not taking the time to be strategic, who is?”
When a rapidly growing business becomes a runaway train, it no longer serves its owner. Some common unintended consequences of rapid growth are capital shortfalls, decreased customer service, and a reactive management under too much pressure. Morale issues can lead to increased staff turnover. It’s easy to reiterate the business axiom that at a certain point leaders must begin to work on the business not in it, but delegating and trusting others by relinquishing control to specialist managers is a leap of faith many entrepreneurs have trouble making. This is because the very traits that made them successful in the first place (self-reliance, risk tolerance, persistence) are the ones they must temper if they are going to make the successful transition from entrepreneur to executive. Not being able to “let go” can ultimately lead to stress and damaged relationships, both at work and at home. At its worst, it can lead to failure of the business itself as the business owner becomes a bottleneck to efficient decision-making.
Bruce Hunter, speaker, author of The Success Cage and a former TEC Chair and senior executive, has worked with hundreds of companies in transition. “Each owner has a fervent belief that their business and experience is unique. My own experience and the preponderance of studies have shown that, when it comes to growth, each business is uniquely the same. All businesses follow a predictable growth trajectory with distinct stages, each of which has its own challenges and characteristics. For a leader, understanding what stage you’re at is critical to building a road map to sustained growth.”
TEC Canada member Garry Derenoski started his company Innovative Rehabilitation Consultants with two employees out of his basement in Saskatoon 16 years ago. Today IRC is a leading provider of HR services in disability management and vocational rehabilitation and the recipient of numerous business awards. When asked how he managed growth transitions Garry indicated – in true entrepreneur fashion – that gritty determination and the willingness to adjust everything from methods to technology were key. However, he wished he had had reached out to more mentors in his early business days. “I knew how to lead and motivate people, but not how to delegate and manage the growth initially. Young entrepreneurs need to take the time to reach out to other business organizations. Don’t isolate yourself – learn about what is out there for you and utilize those skills as a leader.”
Over the years I’ve learned that the sounding board of a group of peers or personal mentor can be an invaluable asset to a leader negotiating the various stages of business growth. They can keep you honest with yourself and accountable for your own goals. If you’re experiencing the challenges of success, do yourself and your company a favour and reach out to others who have travelled the same path. You don’t have to go it alone.