In The Business... On The Business
We hear about the importance of working on the business, rather than in the business.
We understand nothing great gets done alone. So who is on the team to help us work on the business?
Working in the business describes an operational and administrative focus. A house painter working in the business does her own bookkeeping and paints houses. She hires, trains, and fires employees, she goes to networking groups and sets up her own website. She keeps the trucks stocked and manages supplier accounts. There isn't much she doesn't do in her business.
Working on the business describes a focus on management, design, and growth strategies, not just its products and services. A house painter working on the business is looking at the impact of pricing decisions, negotiating with strategic partners, negotiating access to capital through partners, investors or lenders, buying out a competitor, introducing a new product or service line. She is managing managers and growing the business as well as growing sales.
These two perspectives should be reflected in the way we grow our teams.
Operational Team... Strategic Team
When we have the internal/operational focus in an "owner-scaled" business we focus on team members for administration and 'delivering' (the core products of our business: painting, baking, making, selling).
When we have the strategic focus of an "enterprise-scaled" business we focus our resources on building a strategic team.
In the beginning, building a team that maximizes our ability to drive revenues through the door, is the right focus. We can't grow a business if we can't grow the sales.
But ultimately we need more.
We need others to help us keep that larger, enterprise-scaled strategic perspective.
As the business grows, the need for a strategic team grows. A business growing into new markets, larger workforces, higher revenues, larger inventory and supply chain concerns becomes more complex, not less.
It is the job of your operational team to deliver your core products and services, and to keep the wheels on the bus administratively. It is the job of your strategic team to help you shape growth strategies, maximize opportunities, minimize risks, and keep the accountability and energy front and centre. Momentum is everything, and your strategic team creates the flywheel your operational team keeps spinning.
Who and When
Our approach to building a team is built on the Three Cycles model of growing a business. It is a key part of your growth strategy.
Traction Cycle. When you are in the Traction Cycle most of your resources go into acquiring sales and delivering products or services: getting traction in your market. Your operational hires should focus on administration and 'delivery'. These team members include bookkeepers, office managers, and the people to deliver your core product or service: painters, bakers, data entry clerks, and truck drivers.
Your strategic team at this phase should consist of a lawyer, an accountant, and a business advisor or coach. This is foundation-building time and we want to make sure that the legal, financial, and other business fundamentals are rock solid. We are building up, and we need the best foundation possible.
Growth Cycle. As you enter the Growth Cycle, your operational team must grow with you. Key at this stage are management and marketing talent. You need someone to help you manage your team because as it grows you require support building a great front-line workforce. You won't have time to do it alone. You also need someone to help you with your marketing because your business will reach a point where your own efforts at acquiring and retaining customers will see diminishing returns. In my experience business owners doing their own heavy lifting, depending primarily on their own connections, repeat and referred business, hit an absolute ceiling of about 20% p/a growth. And that is under near-perfect conditions.
In the Growth Cycle you also need to increase your reach. It is time to reach for mentors and advisors with deeper knowledge of your industry and of specific business functions. Industry specialists, productivity specialists, as well as business function specialists like human resources and marketing people now augment your financial, legal, and coaching/advising team.
The role of your expanded strategic team is to minimize risk and maximize opportunity in an ever-more complex enterprise. If the primary role of your teams at the Current Cycle was to build a solid and profitable foundation, at the Growth Cycle stage it is to build a stable and highly energized momentum.
Enterprise Cycle. In the Enterprise Cycle things almost reverse themselves. Instead of growing in intricacy, complexity, and energy, there is a simplification and deepening. This is not because the business itself becomes any simpler or slower. It is the owner and her role that take on that new rhythm. Managed now by managers, sometimes with formal titles like Vice-President or Chief Financial Officer, the business is as busy as ever, but it happens at a remove from the owner.
I work with clients to anticipate this from the beginning: deliberately slowing down the working environment of the owner/leader to allow for thought, planning, and strategic design.
The strategic team in this cycle consists of peers from other industries, strategists, your own senior management team, and people who speak not so much to your business or industry as to the eco-system you function in. Your strategic team looks at areas like the economy, government, science and technology in designing next steps to shape the enterprise.
The challenge in the Enterprise Cycle is as much about personal growth as business growth. Productive, positive, and confident leadership was important from the start, but with responsibility for so many more moving parts and the lives of so many more people, those qualities are now non-negotiable.
Want to learn more? Download our free blueprint for growth:
It Works Like This - The Story of Your Business!