Most companies will never break through the million dollar barrier of growth. Ninety-five percent will never reach $5 million in sales.

Why is that. The Book Good To Great has some ideas but in the earlier stages of a company's development there are some basic things, usually missing that can be examined and addressed.

I am going to give you a checklist of things companies need to get to scalability here, though it is always a given you will need to add to your team, or use consultant to implement these ideas well.

If you do not know they exist you cannot expect to implement the solutions alone after all.

 

The Six Things Every Company Needs to Grow 

That They Usually Don’t Know They Need

Getting to the next level and having smooth growth requires different methods of managing a company, or gear shifts in management style at least four times, as a company moves from startup to mature.

Each of the five stages has a different set of challenges and problems. Unfortunately, even our best MBA programs cannot teach these Management Science and leadership skills and arts because they require many years’ experience, not academic learning.

 

Think about how the Captain of each of these boats, or ships, above has a very different job. A CEO and management team in organizations is no different. Their jobs change radically as the business grows. Complexity and the need for more experience increases drastically.

 

 

 

Here are just six, of more than fifty things every company needs to move from small, and seat of the pants management, to larger and professional management:

1. 1.    A monthly goal setting process and staff meeting cadence to communicate and insure clear accountability for results (not activities). These are always put in writing and delivered by each person for their area of responsibility.  There are several models and systems for this but they all have the same basic elements which are based on human behavior and are from the thought leading work of Peter Drucker, The Father of Management, in the 1960s. People have not changed.  Research shows that companies that do this correctly generate 56% more value creation than companies that do not! Symptoms of not having this discipline include:

a.     Poor progress in improvement of the business

b.     Confusion on what priorities are and key deliverables, excuses not results

c.      No solid schedule and accountable person for each major task

d.     Always fighting fires and things falling through the cracks

e.     Friction between people and departments and finger pointing

f.       People are used to and expect to be micromanaged, training them to not grow

2.  2.   A set of metrics used to define, measure and communicate results and success in objective numbers. These are called Key Performance Indicators, or KPIs. KPIs are needed for each i) department, ii) key process and iii) the company as a whole. The instantly and objectively communicate results and trends.

a.     No objective definition of success, or way to measure and focus on improvement

b.     Difficulty in knowing the exact status of a process, project or department which should be easily communicated with a small set of numbers in a few seconds, not long dialogs

c.      You don’t know if things are improving or getting worse, except for revenue, and you don’t know why

d.     Little focus on results, people just hide behind activities instead

3.   3.  An appropriate mix of experienced managers relative to lower cost employees to manage productivity and work “on”, not just “in” the business. This ratio normally needs to be one experienced manager for each seven individual contributors but varies by industry, company and department too. This is called “Span of Control” and is key to maximize sales, growth and efficiency to be competitive. Symptoms of a poor ratio are:

a.     The boss and senior people are overwhelmed and have no time to work on improving the business because they constantly needed, not delegating decisions

b.     Political behavior and people are afraid to take risk and innovate

c.      People only “do things”, they don’t constantly improve things (execution, not good management, planning and leadership)

d.     A company goes sideways for years with only minimal (0% to 15% annually) growth, or up and down as growth creates crisis

 

4.  4.   A Management Development (MD) program for your best employees to help them grow and be challenged, and to help them step up in responsibility and develop into managers and executives as the company needs this. No company grows without developing their people. You attract and keep the best people by challenging them and giving them a career path, not just a job. This program needs a mix of training and coaching to move people along fast enough to grow with the company. A budget of 2-6% of management salaries should be allocated to run this program and must include a mix of training and coaching. Symptoms of no MD program are:

a.     The best people leave the organization due to lack of growth and opportunity. No growth equals constant turnover for the top people who want to move up in their responsibility, skills, pay and career path.

b.     You do not get 70% of job offers you make accepted (acceptance rate) and the better the people are the more they reject your offers (they see something you don’t).

c.      People think of management negatively and do not provide feedback to improve

d.     You do not see innovation, creativity and growth in the business. All businesses must grow or die using innovation constantly to adjust to a changing world.

5. 5.    A clearly communicated vision that all employees can use as a filter on daily, weekly and monthly decisions and to set priorities. Amazingly research has found only about 15% of employees understand this vision, or even annual goals, when asked. This is a failure of leadership. A company cannot have a strong culture and results without a clear vision everyone understands. There are many components and levels to this to present it to people in ways they can understand depending on many factors.

6.  6.   Well defined key processes with metrics for each of:

a.     Marketing - Lead generation of quality prospects

b.     Sales – The act of closing deals in any venue B2B, B2C, online, retail, etc.

c.      Operations - Delivery of your services and products to the customer for the best possible experience.

If you cannot articulate the goals for your company, departments and processes in a small set of numbers you are not ready to scale and are still using micromanagement instead of the more advanced methods of management that allow scaling.

The main challenge is not knowing these things but knowing how to train, coach and implement them properly. This is art, not science, because people are involved. Small differences in how these things are done makes a huge difference in the results. Change is hard for most people, and even harder for organizations.

Generally implementing these things takes 30-60 days each and only one should be done at a time. We have developed a library of videos and other tools to make this efficient and effective. We combine a weekly training session with a coaching session to help people shift their mental paradigm and reflex from what worked in the past to what will work better in the future as larger scale.

Organizational Change Management (OCM) is a specialty which requires vast experience and a combination of knowledge (training), coaching (customized for individuals) and consulting to design the program.  We have been doing it since 2002 and learned a few things along the way.

 

We help companies grow and get to the next level by using proven best practices and management systems that make companies market leaders, not market followers.

Call (619) SCALE06 for a free business assessment by phone.

 



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I get this question all the time and it is such a board question it says loudly the person asking it is not ready to launch any company yet.

I spent 5-10 years preparing myself to launch a company by reading hundreds of books, being a manager and Vice President, going to SBA and MIT Enterprise Forum meetings and other venues and far more.

The answer is my CEO Boot Camp and years of preparation to understand sales, marketing, operations, finance and product development (your domain/industry). I also created a book called The Startup Manual with a CD-ROM of digital tools to walk you through the entire process of design, launch and grow.

All that said basic service businesses are simple to run, while technology businesses that are meant to scale are far more complex and require lots of experience. 

Some general things you need:

1. Clear target market or ideal customer profile

2. Clear value proposition and messaging that resonates with target customer - ideally a customer that understand the need and value, not one that needs lots of education, which is expensive in sales process.

3. Business model design (an art very few can do well that requires decades of experience)

4. Financial plan and/or capital to start

5. Team that compliments each other. 

All of this together and more is called a "Vision" and I have an article on this here

I hope these resources help answer this broad question. It cannot be answered well in a single article by anyone and the only satisfactory answer is to point you to many resources and recommend study, practice, and mentorship.

Anyone that needs to ask this question is not yet ready and should work for someone else for a few years before they lose their shirt trying to launch a company.

Should you hire good people you find and build roles around them?

 

Never, ever design a role around a person if you want to build a real business. Although this can work in very small organizations (under seven people) with little growth it is very dangerous in significant companies. 

People come and go all the time. You need to design your organization's and processes first and write good, clear job descriptions and hire for those roles. This is a common failure point for entrepreneurs and managers who hire people because they "like" them, not because they are the right match for skills and experience. People also often do not understand the difference between skills (easily trainable) and art, which takes 5+ years to develop for far more complex things. What Malcolm Gladwell labeled "unconscious competence". 

This is not to say roles and responsibilities cannot be tweaked a little for individuals. You should expand the roles of good people to keep them challenged and engaged. Nor does it say if you find someone you think is a superstar you cannot invent a role for them to take them off the market and let them find their role within a growing organization. This is possible when a company has some room in a budget and each individual need not carry themselves every month, maybe upon reaching twenty plus people and a steady profit. At that point you can begin to invest in top people and their development for the medium-term and long-term and not look at cash-flow as critical. It just says you need a strong match to the needed skills and experience in each key role and should not compromise. The ripple effect of one bad match to a role can hurt an organization a lot.

 

 How to Spot a Good Business Mentor

Or Coach

And other advice on Coaches versus Mentors versus Consultants

According to a MarketData Report in 2007, an estimated 40,000 people in the US, work as business or life coaches, and the $2.4 billion industry is growing at rate of 18% per year. According to the National Post, business coaching is one of the fastest growing service industries in the world.

 

Preface by Bob Norton: I found this article and thought it useful to people looking for a mentor or coach. A major issue I often see with this is coaches and mentors do not have the correct background for the problems at hand. Some have absolutely zero business experience and claim to be business coaches. Some are "Life Coaches" yet have not been highly successful in life themselves. Other claim to be strategy experts, or other specialist, but have no real-world track record of success in that area. They are "certified" with paid classes from others who have little real experience, just coaching.  A good coach is someone who has done the things they are coaching for a decade or more. Would you hire a football or tennis coach that never played football or tennis? Would not a person who was first a star at that sport make a better coach? Sure, they also need the skills to teach and some framework or process but that is simple really. 

So why do we have "Certified Coaches" that claim to be experts who have never been entrepreneurs, businesspeople or even managers? This is not just silly but ridiculous. I have been to the coaching conventions and what I see is a lot of lost people who cannot keep a job looking to be independent. Often, they have failed at other businesses. 

_____________________________________________________________ 

Believe it or not, entrepreneurs do not have an answer for everything. In fact, entrepreneurs can be a little messed up sometimes, and need some kind of support, or at least a listening ear. The value of mentors is often overlooked in much of the support and guidance entrepreneurs receive. But it’s there. And it’s of real value. In this post we will look at some of the key qualities of good mentors, and how to spot a good business mentor.

Good mentors have to be real

No, we don’t mean as in flesh and blood. We’re talking about people who have made a success of themselves as an entrepreneur recently, and ideally someone who is living the life now. The reason for this is that they won’t hold back on the advice they give. While some of it may be painful, you can’t argue with clear experience. If you are standing in front of someone who is proof that what they are talking about actually works, it makes it all the easier to follow through yourself. You know someone who has done it, and they are helping you.

Good mentors have the time

Note from Bob Norton - I tend not to agree with this point, as successful people develop staff and systems to run their business so they can move on and do what they most enjoy and are best at doing. I allocate about 25% of my time to coaching and mentoring to stay connected to the marketplace and because I enjoy the work and helping other grow from my own experience. Even though this work might pay only 25% as much as other work I could be doing I think it is important work and give my experience more leverage through others. Ideally, I will get some stock in a startup company with an aggressive discount for new companies to get them over the Catch-22 of not having enough cash and needing lots of help.  Success is doing things the way you want to for an enjoyable life and work schedule. The fact that your time is 100% filled all the time could mean the opposite too. 

This is one of those funny paradoxes that plague the business world. If a mentor is to have enough time for you, this suggests (rightly or wrongly) that they are not that successful. Being successful usually means a lot of hard work, so in order for you to gauge whether or not your mentor is a good choice, get to know them first. If they seem patient and calm and still successful, they are probably a good fit for your needs.

The very best mentors are clear, to the point of being sharp

These people are successful, right? And truly successful people don’t waste time. Instead, they get to the point, sometimes appearing a little gruff along the way. If you find yourself close to starting a mentor relationship with someone who appears even a little bit fluffy or vague on anything, you may want to think twice. The best mentors are clear and direct. They have created successful lives for themselves, and this has meant potentially aggressive demeanors. Be ready for this and welcome it. The last thing you need is a mentor who isn’t used to getting results. If some of this rubs off on you (without you being cruel to others) it can only be a positive thing.

So there are a few characteristics of good business mentors. If you’re in the market for one, go over them and see if any of them are a good fit. Having a mentor is a useful and very positive thing, especially as you become more successful. But choosing the right one is vital.

BY PILAR NALWIMBA 


 

 

thoughts on coaching versus mentoring versus consulting - by Bob Norton:

Do not hire a “Business Coach” that has never run a real business, and by that I mean someone who has sold more than their time. A service business just selling your time is not a business really, it is a job or freelancing. This is relatively easy. Running a multi-disciplinary business with Sales, Marketing, Operations (customer service), Finance and Product Development functions for 5, 10 or even 15+ years developed real skills. In fact, this is an art that takes a decade to master. Do not hire an “Entrepreneurship Coach” who has not started a successful company. Do not hire an “Executive Coach” who has not had a lengthy career in business with a minimum of five years as an executive in the same size company you are in because the styles, techniques and skills vary enormously between startup, small, medium, and large businesses.

A good coach or mentor has also developed tools, models, systems, and processes to help you. They will not walk you through details but give you guidance and leverage from their time. I have developed literally thousands of slides, models, and processes since 2002 and even developed over 150 videos on key topics for my coaching clients so that a single hour with me can be like three to five hours with another coach.

Call (619) SCALE06 or click here to set up a free evaluation session. 

The focus of a coach helping a CEO, Executive or entrepreneur to grow is dependent on many factors. This slide show is just one dimension of what must be considered for CEOs, founders and entrepreneurs as a company grows from startup to only about fifty employees.

 

A Consultant is someone with vast experience to diagnose a problems, which the client does not understand, or they would not have the problem. Clients usually see and try to fix a symptom, not the root cause. A contractor is someone with specific skills who just brings more manpower to the job where the client understands the problem and skill sets hired and how to manage them. 

A Coach is a guide with vast experience who does not do the actual work but teaches the client to do that work with a "teach to fish" approach. There are dozens of methods to coach clients and a good coach will have many in their toolbox for different circumstances. These include Socratic Method. 

Wikipedia's Definition of Coaching: Coaching is a training or development process via which an individual is supported while achieving a specific personal or professional competence result or goal. The individual receiving coaching may be referred to as coachee. Occasionally, the term coaching may be applied to an informal relationship between two individuals where one has greater experience and expertise than the other and offers advice and guidance as the other goes through a learning process, but coaching differs from mentoring by focusing upon competence specifics, as opposed to general overall development.

Business coaching (also from Wikipedia)

Business coaching is a type of personal or human resource development. It provides positive support, feedback and advice to an individual or group basis to improve their personal effectiveness in the business setting. Business coaching includes executive coaching, corporate coaching and leadership coaching.

The Professional Business Coach Alliance, The International Coach Federation, the International Coaching Council and the Worldwide Association of Business Coaches provide a membership-based association for business coaching professionals. These and other organizations train professionals to offer business coaching to business owners. However, there is no certification required to be a business or executive coach, and membership in such self-designed organizations is entirely optional. Further, standards and methods of training coaches can vary widely from organization to organization, reiterating the open-ended nature of business coaching. Many business coaches refer to themselves as Consultants, a broader business relationship than one which exclusively involves coaching.

There are almost as many different ways of delivering business coaching as there are business coaches. Some offer personal support and feedback; others combine a coaching approach with practical and structured business planning and bring a disciplined accountability to the relationship. Particularly in the small business market, business coaching is as much about driving profit as it is about developing the person.

Coaching is not a practice restricted to external experts or providers. Many organizations expect their senior leaders and middle managers to coach their team members to reach higher levels of performance, increased job satisfaction, personal growth, and career development. Business coaching is not the same as mentoring. Mentoring involves a developmental relationship between a more experienced "mentor" and a less experienced partner, and typically involves sharing of advice. A business coach can act as a mentor given that he or she has adequate expertise and experience. However, mentorship is not a form of business coaching.

 

We train and certify coaches in our Six AirTight Systems. They must have no less than five years management experience and about five years coaching or consulting to be admitted to the program because we walk our talk and believe coaching and consulting requires vast experience. Technical consultants with deep experience in very narrow areas, like a computer language, have blurred the line of what a "Consultant" is really.  A top consultant needs to understand Organizational Behavior, Change Management, Process Management, Management Best Practices and Leadership at a minimum. A good consultant can change an entire organization, a bad one can help accelerate problems while eating resources.