Some pitfalls exposed in a quickly scaling business

 

Businesses that take a decision to grow (“scale” is the current preference) also take on the associated risks. It is widely acknowledged that uncontrolled growth is a leading cause of business failure, so that particular risk is heightened where there is a lack of meticulous cash flow management.

However, a recent example within a client’s business exposed another risk that, in this case, was not anticipated. The business has been on an expansion program over recent years, both vertically and laterally. It was growing within its existing business model and, at the same time, introducing a number of additional services.

While careful cash flow management was ensuring the finances were in check, some cracks were appearing within the management structure. A senior manager was experiencing stress as what she perceived the requirements of her position appeared to be getting out of control.

One of the major failings was that of not addressing the changing requirements of the position as the business expanded. Assuming every position within a business has a Position Agreement – or any similar label to clearly detail the specific requirements and expectations of the position – then regularly reviewing such an agreement is also vital.

These types of agreements (more commonly referred to as Job Description, which in my view, do not provide a sufficient level of clarity) are either absent, unclear or out-dated in many small businesses. This leaves the business vulnerable, as the holder of positions become disenchanted as, over time, their changing role bears little resemblance to the one for which they were original engaged. This growing frustration (exacerbated where there is an inadequate communications structure) can lead to conflict and even resignations.

In the case of my client, he was sufficiently perceptive and a willing communicator as to be able to address the issue at hand. It has provided both he and his senior manager with opportunities to discover much about their respective strengths and to align those strengths with job role requirements and the business structure. Along the way, they have also discovered the power of self-awareness in dealing with such circumstances.

In the meantime, once the roles are clarified, they will introduce a review process whereby all positions are re-examined on a regular basis to ensure they remain relevant.

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What John Matthew believes about small business

That the owner has risked many things that others take for granted;

That there is no guaranteed income or reward for the considerable effort that is required;

That often, the family home is on the line to support the business and its constituents;

That there is a dignity and self-respect that is earned;

That entire communities would be better places if there was an increased appreciation and respect for small business.

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