Hitting the glass ceiling
By Guy Rigby T
he average early-stage business doesn’t spend a lot of time thinking about management teams and board structures, but instead focuses on carrying out the immediate and necessary task
in hand, whatever that may be. As the business begins to grow, however, increased resources will be required. This means that more and more people become involved and a pattern of working emerges. As a result, a rudimentary management process begins to take shape.
In these early stages, natural talents and capabilities tend to become apparent, with individuals taking responsibility for
different disciplines and roles. These informal and
unstructured arrangements can often be surprisingly long lasting and perfectly satisfactory to take a business through its formative and early growth phases.
The ‘board’ in these businesses will often consist of the founders, or perhaps a husband and wife team, with no formal meetings and no real agenda. Suffice to say that this is a perfect stamping ground for entrepreneurial heroes and meddlers who, unchecked, will typically go on to run small, often family dominated businesses.
For many, successfully establishing and running their small business will be both satisfying and satisfactory. However, there are some who will recognise that, whilst capable of more, they and/or their businesses have hit a glass ceiling. This article is for those who want to break through this invisible, yet sometimes seemingly impenetrable, barrier.
Breaking through It may sound strange, but the finance function in a growing
business is typically under-resourced and under-qualified. Getting the right resources, including the part-time or full- time expertise of an experienced finance person, can unearth a host of opportunities. Experienced finance people have often ‘seen it’ or ‘done it’ before, so they can prove to be a valuable sounding board on a host of business issues. Getting the right person on board may well transform your view of your business and its potential.
Once you’ve sorted out your finance function, you can start thinking about other roles in a more formal way. There may be some major challenges at this stage, as you realise that the people who fell into senior roles during the formative stages of the business, and who have supported you loyally
ever since, may not be the right people to lead the business forward.
This includes you. Typically, you have been chairman, chief executive officer (CEO), managing director (MD) and chief operating officer (COO). You may also have been sales director (SD) and chief technology officer (CTO). So what’s your own role going to be in the future of the business?
This is often when the concept of a board of directors starts to take shape – the time when the business starts to move away from being entrepreneur centric to being more reliant on key executives with proven experience and expertise. This certainly doesn’t mean you shouldn’t be involved, or that you should step back from the business, but it does mean thinking about what your future role should be.
And the last step, often not present in smaller or privately- owned businesses, is the appointment of one or more non- executive directors (NEDs).
NEDs can bring a wealth of experience and contacts, often taking the role of non-executive chairman or heading up board committees. Consider the benefits they might bring in one or more of the following areas:
•An objective perspective on your business, seeing opportunities that you may otherwise overlook. •Expert insight or knowledge in your particular business sector.
•Contacts and relationships with potential customers and suppliers.
•Business intelligence and knowledge of your competitors. •Strong relationships with external advisors, matching relevant skills to
your particular business needs.
As Jonathan Hick, founder of Directorbank says, “You’re less likely to go wrong with a good handful of non-execs around you. Non-execs are cheap, plentiful, fantastic value and each one of them brings 25 years’ business experience.
Evolution, not revolution It’s a case of evolution, not revolution. It’s worth remembering
that all these people will need to be paid. So, except in unusual circumstances (perhaps a VC-backed or very high- growth business), it will probably take years to develop a
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