A question that the directors of every growing company should constantly be asking themselves is, how should we organise ourselves? The answer, which has almost become a business school mantra, is that companies on a growth path should be big little companies and not little big companies.
Small growing companies, runs the standard advice, should think, behave and work like a big company. Then as the business does grow the big company culture is already embedded. This appears to be good advice: as noted in my thought piece on transition points, companies too often falter, or fail, or drop back to being smaller entities at a critical moment in their development. If a company has too many short-term fixes rather than brand-new ways of working to meet the changing and growing requirements, then the inconsistency of those fixes will cause the business to falter, lose profitability and work their motivated entrepreneurs to a point of deep stress.
A finance director of a well-known high-street brand remarked that his company had the procedures of a corner shop. Those situations can simply make people walk because they are put under so much pressure right across the organisation, not just in the finance function.
As a result business advisers who work with growing companies that have the procedures of a small organisation will often walk into the business and say: "This isn't right; this company should have big company procedures." The adviser will then try to retro-fit large company procedures to those enterprises which intend to be big. Their viewpoint is that if the company intends to be a large business, then it should be like one now.
The problem is that companies which take that advice end up with procedures which are simply too big for their current position. The advice invariably comes from executives and advisers who have worked in much larger organisations. The result is companies have a level of control and overheads which slows the business down and introduces an unnecessary and unsustainable cost.
Peter Charles
A Consulting Interim Team
Peter Charles Limited
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