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Continued from Previous……
Our handling of scaling up challenge starts here.
Adding More People
This is the first response in all departments. The demand comes from the departmental head and the pressure keeps mounting. The sales have increased, so the sales team head(s) wants more salespeople. Number of employees will increase, so the HR needs more staff to handle their matters. Revenue has increased, so the finance needs more staff. Demand for production has increased, so the production needs more staff in production, quality, warehousing, logistics etc. More materials are required, so the supply chain needs more staff. The demands are persistent and keep getting louder every day. The question is, Is increasing the number of people solution to all capacity issues?
The answer is a definite NO. Adding more people does not solve the problem, rather it may compound the issues. Increasing capacity of existing people is the right approach. It should also be understood that capacity building takes time, therefore, it should be planned and done before the emergency strikes.
Availability of cheap labor and managers’ focus on unit cost rather than value for money is the reason hiring is done irresponsibly. The simple fact that ‘two or more incompetent persons’ do not add up to become ‘one competent person’ must be remembered.
The other issue is that many managers do not have the capability to train their staff. They rely on the staff expertise for getting things done. But when they want to hire well-trained and capable staff, they face two problems: one, they do not want to hire someone who is better able than them; and two, they do not want to, or cannot pay adequate compensation. Look around and you will witness office after office filled with low-paid, low-capability, and low-powered staff. No wonder the drive and ambition in this staff is at its lowest. The manager is now far faced with two rather than one issue.
Leadership Style Changes
Julia B. Austin writes that the leadership changes with the number of employees. She puts the change milestone at 100 employees.[Quote] As a company approaches 100 employees, founding leaders confront an important reality: It’s time to let go. It’s simply impossible to be plugged into everything. At this stage, you are probably managing managers, and more than ever have to empower your leaders to, well, lead! They will not always do things the way you do them, but at this stage, if you don’t have the confidence and the right people to do things without you, it will be a rough ride. In fact, when founding CEOs don’t learn to step up into their roles and empower their leaders, investors and board members begin to lose confidence in the founding CEO’s ability to operate at scale and consider whether to replace them. Here are a few tips in areas I find to be the most challenging at this stage:
When it comes to employees, there are two areas where CEO/founders often get tripped up as their companies grow: hiring and people management. Stay close to the hiring process for as long as possible in the early stages. The first 10-15 employees will set the culture of your company, and how you lead them will set the tone for leadership going forward. As you start to bring on more members of your team, however, you can’t handpick everyone. Here’s how I recommend approaching early-days hiring:
First 20-30 employees. If you have inexperienced managers, review candidate resumes together with them and establish selection guidelines for what qualifies a candidate for a round of interviews. Be part of the interview and hiring process as much as possible to set expectations on what makes a good hire at your company (even if the hiring managers are experienced) and serve as a role model to managers who will eventually do this themselves…
From 50 to 100 employees. This is a transition period in which you may sit in on candidate reviews for key hires, when the team is deciding whether to make an offer and why. Your role is not necessarily to make the decision, but to guide and mentor the team through the decision process. You may interview candidates at this stage, too, but I suggest this be to help a junior manager resolve concerns they have about the candidate or probe more deeply on areas in which they feel less experienced, or to sell the business and its potential to a candidate during the final closing stages.
More than 100 employees. Let go! If a company lacks clear guidelines at this point, which manifests as bad culture or heavy voluntary or involuntary attrition, then you need to rework the wheel with your hiring team. Otherwise, it’s time to set your team free to make the right calls for their teams’ needs. At this stage—other than your direct hires—you should only be on-call as needed for key hires. [Unquote]
To be Continued……
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