Growing a business is not just about sales, product development and new technology
Growing a small successful business into a larger and still successful organisation isn’t just about driving your marketing and sales, developing new products, training your staff, introducing new technology and crafting clever financing. What you, as a business owner, must take into account is the pivotal factor of how you manage and structure your business organisation. Whatever management process you adopt, it can be the key influencer on whether or not your company grows. Using the wrong set of techniques can stifle growth. Using the right ones can transform organisational performance by up to 50% or more and provide a stable platform for a sustainable growth trajectory.
The small business growth conundrum
Where small businesses succeed against larger and more established rivals, it is nearly always due to four characteristics. Small businesses tend to have the advantage of being able to:
1. Innovate more quickly and cheaply,
2. Be more flexible and adaptable to changing circumstances
3. Inspire higher levels of commitment and enthusiasm from their staff.
4. Be a lot less averse to risk taking.
As a result of these characteristics, many of the creative innovations in commerce and industry first emerge from the small business sector. This is despite the sector’s very real disadvantages of lack of capital and lack of the economies of scale.
But the conundrum here is that as small businesses succeed, so they grow. As they grow, so these once small and dynamic firms gradually suffer from the same low productivity and inflexibilities as their rivals do. This creeping sclerosis potentially loses them their competitive edge. So the two questions here are; what is it about small businesses that make them more flexible, quicker to adapt to new events, more pioneering and more capable of inspiring loyalty? And more importantly how can you retain these qualities, as your business gets larger.
Why larger companies can suffer from low productivity
The answers to both these questions can be found in the way we have tended to structure our businesses as they grow larger. As businesses grow, the obvious and nearly universal approach to structuring the management, is to put in place a well-defined hierarchy. Unfortunately, hand in hand with a hierarchy, usually comes “top-down command and control” or authoritarian style management. This style of management is characterised by target setting, centralised control, removal of autonomy at the lower levels and a consequent range of stress driven behaviour by both staff and managers.
One step further down the road and you find yourself working in a bureaucracy, almost a byword for ineffectiveness, with its time wasting, political in-fighting, low creativity, box-ticking low-risk compliance culture and low productivity. What sane small business owner wants this?
It has to be said that many small businesses, even when still small, have dominant bosses, founders and owners or strong personalities who like “being in charge”. The problem here is that such bosses tend to put into place a top-down command and control style outfit right from the start. Too often we take this style of management for granted. On a personal level we are probably used to this sort of hierarchy and know how it works. We are used to the way government functions and have lived with hierarchy since school days. Perhaps it is this factor that has led so many of us to think that the need for a strict hierarchy is somehow “good” and inevitable.
So, most businesses, either start out with an over dominant boss or subsequently sleep walk into creating a strong hierarchical base. As a result they don’t get very far in terms of fulfilling their true potential for growth and profitability. For every small business with a meteoric rise to success, there are literally scores of businesses stumbling and bumbling along at some level of mediocrity or failure. It doesn’t have to be like this.
The sad fact is that this cultural attachment to strong hierarchical structures has proven very expensive for the UK economy. There are literally hundreds of thousands of potentially successful businesses that hit a self-imposed glass ceiling. Their further growth is quite simply inhibited by an inability to organise themselves effectively. This is a real shame and explains to some extent the collapse of our manufacturing sector in the UK as against our European rivals.
A natural approach to management
The good news is there are now easily accessible alternatives to adopting the repressive structure of a top-down command and control management hierarchy.
Modern research, in the diverse fields of planning, psychology, cybernetics and neuroscience, has spawned new ideas about how human beings and particularly human brains function and how they interact within a group. There is a new awareness that human beings have only survived as a species by evolving to become highly socialised, collaborative problem-solving mammals. The ability to problem solve with our peers in a group is literally hardwired into our DNA. If we are allowed to, we will collaborate and problem-solve instinctively. That means we will naturally collaborate without having to be asked.
At complete odds with this new awareness is the usual top-down command and control management structure that actually removes the opportunity for the majority of staff members to collaborate and problem-solve. Not only is this a valuable opportunity lost to the business, but more significantly this repressed opportunity literally induces stress into our physiologies in a very profound way. The research shows that stress at work has far reaching implications for work performance.
The hidden cost of current management methods
When stress happens, the effect on the brain is to impair a range of mental and emotional faculties. The more stressed we become the more these faculties are impaired. This impairment leads in turn to provoke a variety of low performance behaviours that we can well do without in the workplace.
So, for instance, in the context of management and work performance, when stressed we empathise less with other colleagues, management, customers and even the organisation’s goals. We progressively lose access to our rational brain. We can also lose sight of the big picture easily, make mistakes, become clumsy, find it difficult to listen to and accept other people’s point of view, lose enthusiasm and can suffer from loss of focus or tunnel thinking. I’m afraid the list goes on.
What this list translates into in terms of work activity is that stressed people then manifest a range of stressed behaviours or activities. These include unnecessary personal conflicts, attachments to outdated ways of doing things, chaotic activity, high staff turnover, hidden agendas, reworking from mistakes made, accidents, dullness, poor customer service, flawed judgement and slow working. Also of course, when stress continues on an ongoing basis the immune system becomes weakened and people become sick and absenteeism tends to escalate. It doesn’t take too much imagination to see what effects all these suboptimum behaviours can have on your bottom line.
New management techniques drive dramatic performance improvements
In essence the new understanding about stress means that the task of management has had to be redefined. The new task for management has to be to empower high performance by enabling everyone to activate our instinctive need to collaborate and problem-solve. Creating a collaborative environment reduces stress and empowers the human being to function at a much higher level of performance. As such, “intelligent action” is not just confined to the boardroom and senior management but dispersed right the way across the organisation.
These groundbreaking ideas about stress and the need to collaborate have come together to form a powerful and highly motivational management system called Team Business Development (TBD). Based on planning research carried out at SRI in California, a TBD programme, introduced initially by an outside coach, accelerates change and performance improvement by combining unique team planning workshop methods with rapid team building, comprehensive 360-dgree stakeholder feedback mechanisms, interactive training on key skills and experiential learning.
The SRI planning research shows that TBD’s team planning methods alone generate reliable performance improvements of between 15% to 50%. As you can see, a performance improvement of this size would be transformational to your competitive edge, profitability and business growth.
Twelve reasons why TBD transforms business performance
TBD in no way undermines or removes your hierarchy. However, TBD does allow the hierarchy to function in a much more fluid and dynamic way. Also, TBD automatically reduces the “organisational stress” seen elsewhere that is so corrosive of human performance. Essentially TBD exploits people’s natural tendency to collaborate together and so removes the many obstacles to high performance created by traditional management methods. Among other benefits TBD:
- Promotes a culture of openness and trust sparking off real enthusiasm and commitment. This aspect is shown to improve staff energy levels by 30%.
- Reduces “organisational stress” recognised as being a major inhibitor to group performance as well individual performance.
- Reduces business dependency on key individuals.
- Acts as a dynamic catalyst to change.
- Translates new ideas from every level in an organisation into rapid and effective action plans.
- Generates widespread problem solving at every level of responsibility staff don’t just pass the buck.
- Problems are anticipated rather than reacted to after they have occurred. TBD enables much broader elements in the organisation to question the appropriateness of what they are doing and to modify their actions to take into account new situations.
- Disperses “intelligent action” right the way through the organisation.
- Rapidly processes the large amount of information required to cope with an uncertain and changing environment.
- Enables coherent planning that takes into account what is going on elsewhere in the organisation. You don’t get new plans tripping up other projects.
- Minimises counter productive internal politics and wasteful turf wars.
- Instils a unified management focus on agreed goals that doesn’t detract from the diversity of activity required to meet changing circumstances. The company can experience a surge in growth without the shackling effect of rigid targets.
Thirty-five year track record
Over the past 35 years, TBD’s team planning methods have been used in over 300 organisations including NASA, Roche Chemicals, Rolls Royce, Tetley Tea and the former government Property Service Agency, along with a range of small enterprises. During this time the performance uplift has been so consistent that it forms the basis for my own performance guarantee.
My aim with any TBD programme is that it will pay for itself over and over again in improved performance and profitability. So, any proposition to you would be simple. After carrying out an initial assessment, I will put a proposal to you to improve your company by a minimum specified amount, using agreed performance measures. This means that, at the very least, this proposal will guarantee to deliver you a return of at least 1:1 on a TBD performance improvement programme within a twelve-month period. However we will be looking to commit to return to you at least five to ten times your investment in the programme.
If you would like to find out more about TBD and how it could enable you business growth over the next year please give us a ring on 0845 0945 819.