Working in a small growing company can be very exciting and also very frustrating. The rush from getting new big things done requires a certain degree of freedom and flexibility. But without some structure, progress on the next big thing won’t happen as expected and that’s when tempers can flare. Striking the right balance between freedom and structure can lead to impressive success. Failing to review and adjust that balance as a company grows can lead to stagnation, loss of market share and reduced profitability.
Six elements lie at the core of figuring out how to strike the right balance between structure and freedom as companies grow: direction, roles, performance, systems, projects, and working relationships. Properly configuring these elements can enable an organization to more easily progress in a new direction. Many entrepreneurs, when building their companies, find that being autocratic and at the center of all activities delivers results. However, as people are added that structure eventually limits organizational performance. What’s needed is structured freedom to enable employees to move the company ahead.
Direction. Without clear direction, knowledge workers, the ones that can change a company, will develop and run with their own priorities. They will do what they think is best and that’s admirable and even an excellent source of innovation. However, when each person’s priority list is combined with everyone else’s priority list at least ninety hours of work per person per week is created. Compound this workload with no mechanism for deciding what should be worked on first and chaos ensues.
Each person becomes frustrated that others are not taking their priorities seriously and the whole system bogs down. The end result is that customers and growth suffer needlessly.
What these knowledge workers desperately need is for the leader of the organization to take personal responsibility for the direction of the company. Being the best at something that matters to customers and employees and something that will derive long term profits and growth is the first decision to be made in setting a new direction.
How that new direction will be realized, gains much needed credibility and momentum when it is built with participation from the operating areas of the company charged with implementation. The final critical element is for the leader to ensure that each and every employee, from floor sweeper to front office executive, understands what future has been chosen, why this future has been chosen and how it’s going to be realized. When everyone from top to bottom understands the direction for the company, the stage is set for progress.
Roles. Very small companies generally don’t need job descriptions because everyone works to support the founding owner-manager. People can see where they need to “plug in” because the options are literally right in front of them and the feedback is immediate. As companies grow, how people “plug in” becomes harder to figure out because there are so many people involved and the feedback is generally much slower in coming and more dilute.
What’s needed are continuing discussions about roles; what is someone trying to contribute, how they are planning to make that contribution, what they need from others to get the job done and what others expect of them. Clearly defined roles add structure because now people know what they can expect from others and what’s expected from them. People are now freer to focus on their area of performance and contribution and not on needlessly following-up with or doing the work of others.
When roles discussions do not take place, large initiatives that are seemingly well understood and communicated do not advance as expected and issues obvious in hindsight languish unaddressed for months. This problem can be exacerbated by well meaning top executives that see a crisis brewing and step in to save the day. While the immediate problem becomes properly resourced and a crisis possibly averted, the executive returns to his other activities leaving the organization confused as to who’s now in charge. The project returns to its usual frustrating slow pace or stops completely.
Performance. Small companies with founding owner-managers need very few key people to get things done. The other employees seemingly need only have basic competence and reliable attendance records to survive. Since the few key people know how everything should be done they can cover for poor performers by always being involved and available to give specific direction and to catch mistakes before they become costly. As companies grow, however, it becomes physically impossible for those same few people to know all the details of what’s going on and to catch all the mistakes.
Ensuring all employees perform to the level required by the business becomes critical to growth. It’s not possible to oversee everything so making sure the right people are on board goes a long way to making sure everything runs smoothly. Key to instilling performance into an organization is to constantly work on identifying and developing new leaders. A successful technique to indentifying new leaders and driving employee growth and improved performance is to schedule performance reviews a half year out from the annual raise. This enables management and employees to understand that the conversation on performance is just that and not something to suffer through to get to the money discussion.
Systems. Systems describe and define how decisions, work and communication actually happen inside a company. They actually run the day to day affairs of a business.
Systems cover everything from how often management formally meets to review performance to how an order gets processed to how sales follows-up on a lead to how competitive intelligence is captured to how a new product is developed. They may be written down or part of a computerized work flow as in manufacturing. However, other systems, especially business systems used by executives are loosely described only as “it’s just what we do”.
If an organization is setting off in a new direction what systems are in place to support needed progress by routinely directing activities and reporting progress? This could be as simple as new sales tools showing the days lapsed between last contact on a new account to drive better follow-up. It could be a new report asking each knowledge worker to describe what major contributions they plan to make to the growth of the business in the next three months and how would someone else be able to tell when it’s been accomplished. The right new system will reinforce the need for progress in a new direction and actually encourage people to take on tasks and roles their habits would normally tell them not to.
Projects. Small companies starting out with up to seven or so knowledge workers are too consumed with the work at hand to realize that every customer order and every task is actually a project. Projects have objectives, means, metrics, timelines and costs associated with them just like an order. Small companies don’t have to think “projects” because what needs to be done is right in front of them, they know exactly what needs to be done and the status of that project is generally blindingly obvious for all to see.
When ten or more knowledge workers are trying to grow a business by developing new products, designing new business practices or installing new equipment, each person’s efforts impacts and relies on many other people. The opportunity for poor prioritization, poor project definition, missed timelines, poor planning, improper resourcing, poor execution and cost overruns increases seemingly exponential as a company grows.
Having a more structured approach to project management will pay off by speeding up the effectiveness and efficiency with which things are accomplished. This new “project” structure, when done correctly, will generate improved progress towards corporate objectives and give the organization more freedom in terms of time and capacity to take on more projects.
Working Relationships. Good working relationships, key to any organization no matter how it’s structured, are built on a combination of mutual expectations and trust. Working through the five other elements of structured freedom covered in this article goes a long way towards building mutual expectations.
Trust is built through actions and interactions that demonstrate integrity, consistency of behavior, openness and discretion, that build appreciation for motives and intentions and that give evidence to specialized knowledge and skills and a well developed business sense. Good working relationships can enable knowledge workers to accomplish great things in short time frames often with a creative use of limited resources.
Conclusion. It is a 100% certainty that the need for rebalancing freedom and structure will arise as a company grows or seeks to take on new directions. When circumstances demand an organization change its ways, properly addressing all six elements of structured freedom will enable an organization to successfully free itself from old unproductive habits and reach new heights of performance.
Bio
Matt Edison works as the Reactive Silicones Business Manager for Gelest, a specialty chemical manufactrer north of Philadelphia. In his current role, Matt leads business development projects, manages the silicone technology group, and improves company business systems. His special interest in improving organizaitonal performance to realize customer opportunities can be seen throughout his accomplishments and is the impetus for these articles. Since 2989, Matt has also worked for DuPoint, General Chemical, and Inoles Chemical where his roles included Plant Manager and Engineering Manager, among others. He can be reached at [email protected] or at 267-312-3537.
