By Sean Carroll
Sept. 29, 2011
Small business owners constantly lose sleep over whether or not to grow their business – and if so, how fast? Unless you are a local niche business, the answer is grow or die. The more important question becomes how to best grow the business, while minimizing growing pains and potentially damaging or ruining the brand in the process.
There are lots of strategies to drive growth, but two cornerstones to successful growth are talent and technology. There are countless examples of business leaders who started a successful business or launched a wildly successful product, but when the business hit a certain point, the wheels began to fall off. One of the most common traits of an entrepreneur and small business leader is the ability to wear many hats and do every job in the company. The founder of a software business typically builds and sells the product, and also responds to customer issues. This high touch approach works well with the first round of customers, but this structure cannot scale. There comes a point in the evolution of a small growing business where it is necessary to hire functional heads to own sales, engineering, operations and finance.
Adding talent, especially in leadership positions, can be daunting. Additionally, the expense associated with hiring can be prohibitive. A small business owner must make a conscious decision to invest in the business and must be confident that adding talent will result in a meaningful return. Once a small business decides to add that first commercial sales leader or finance head, it’s critical that the company implements a formal recruiting process - including a formal position description, timeline and interview process. Too often, a small growing business goes about hiring in an opportunistic fashion; meaning a founder will hire one of his “buddies” or someone from his/her network without comparing to a slate of new prospects. This is known as the “convenience hire” – which usually results in the wrong hire – and the personal connection makes it difficult to terminate the hire and move on.
Another issue with the convenience hire is that most leaders hire in their own likeness and disregard complimentary skills and personalities. This leads to an executive team of cronies who rarely question the status quo or provide the necessary level of checks and balances at the executive table. It takes a high level of self-awareness for a business leader to recognize these issues in the hiring process and put a method in place to protect against taking the easy road, by making the convenient hire.
Here are a few recommendations on how to avoid making the convenient hire:
Assuming you don’t have a Human Resources person, ask a different member of the leadership team to own the hiring process. This person will create the job description, method for sourcing candidates and oversee the interview process.
Use a trusted business partner (lawyer, accountant, PR firm) to participate in your interview process.
Use a recruiter or contract HR specialist to oversee the hiring process and provide the level of formality necessary to make the right hire. Recruiter fees can be excessive for a small business, however, using a contract recruiter or HR specialist on an hourly basis can be very cost effective.
Superior talent will always give a company a chance to win. Companies like Google, and sports teams like the Yankees, are maniacal about acquiring the best talent, which allows them to consistently compete at the highest level. However, supporting talent with tools and leveraging to “do more with less,” or maximize their performance, is another way to grow a business. In today’s market, small businesses are using technology to automate various aspects of the business and drive efficiencies to do more with less. In the 90s and early 2000s, technology was a multi-million dollar investment targeted at large enterprises, leaving Microsoft Office as the only tool for the small business. Today, there is a plethora of affordable Web based applications that small businesses can afford and use to manage and grow their business. Whether it is finance/accounting, customer service, sales force automation or recruiting, there are technology tools that can help a business grow without solely adding personnel.
The trick with technology is to “get the most out of it.” Too often, a business invests in technology only to leverage the tip of the iceberg. They say humans only use 6 percent of their brainpower. I know I barely scratch the surface when it comes to what is available on my smart phone. The same is true with business technology tools. We discussed how to best add talent above. One of the top responsibilities of any hire should be to be an expert user of their respective technology platform. If your finance leader wants to hire a staff accountant, the first question to be asked is; “are we getting the most from our accounting software?” The correlation is that functional leaders need to be more hands-on and tech-savvy than ever. This is becoming more evident in larger businesses as well.
When the answer to the title question is GROW, there is no Harry Potter magic wand that can make that happen painlessly in the blink of an eye. Growing a business is tough. It is an art and never goes in a straight line. Like building a house, you cannot build the first and second floor until the foundation is set – and the key ingredients to a strong foundation are talent and technology.
Sean Carroll is a partner at executive search firm Polachi, the leading provider of Access Executive Search services to technology, clean tech, venture capital and private equity clients. He spearheads Polachi’s search practice in the greater New York City market working with clients in the software and digital media sectors. He can reached at www.polachi.com.