Is Your Structure Evolving with the Growth of Your Company?

Is your structure evolving with the growth of your company? Is your structure properly designed to support both your internal and external strategy? In other words, do you have a structure best designed to serve your ideal prospects’ needs better than any of your competitors? Are you set up to acquire those ideal customers? If your business is like many of the companies I have seen, the answer is probably no to many if not all of these questions.

It Is Common to Underinvest in Administrative Functions

It is probable that you will not hesitate to invest in positions that you believe are critical to creating and selling your products and delivering your services. In fact, you may even overinvest in these functions. However, it is also likely that you underappreciate and underinvest in areas that are truly critical to your success. I often find companies will not have the right level of investment in functions and roles in human resources, finance, and technology. The last case is especially true where your business is not considered primarily technology related. You may justify that you only have a certain amount of resources and therefore have to make tough decisions. However, in many cases you are unable to see what not investing is costing you.

Not Investing in a Position can Cost you 26x the Salary

Too often you are so worried about how much a payroll is going to cost you that you do not realize what it will cost you not to fill a position. I had a client that had been reluctant to add the human resource function to their organizational structure. Their concern was that hiring the type of talent that would do the job well would cost as much as $75,000 in annual salary. Historically the function was absorbed as a secondary activity in everyone else’s job function. There was no one person accountable that could truly say they were one hundred percent focused on human resources. As a result, there was no consistent process for recruiting, the biggest issue for their company. Worse, with no one in the company that you could say was great at recruiting or selecting talent, the function was failing miserably. With everyone responsible and no one accountable, positions were not being filled, subpar talent would go unaddressed because of lack of ability to fill open positions, and a lot of strain was being placed on the management team.
This issue was a topic of discussion at every monthly and quarterly senior management meeting, and at each meeting it was concluded that a human resource person should be hired. However, the Chief Financial Officer carried too much weight in decision-making, was cost-oriented rather than growth-oriented, and the function organizationally reported to him. As a result, over the course of nine months the leadership team continued to allow this void to go unaddressed. Then, the perfect storm hit. Operations could no longer handle the sales volume it currently had, so sales had to start turning away business. The organization was now almost at a standstill because they failed to have the necessary people on the team. All of which could have been prevented had their human resources function been operating properly. The leadership team concluded that not spending the $75,000 cost the company about $2 million in cash flow.

Are You Unconsciously Stunting Your Growth?

It is common for leaders to unconsciously stunt their own growth by not evolving their structure to support that growth. You have to build it before and not after. Sometimes, you have the right structure but are not filling the positions with the right level of person or type of person. Continuing with the human resources role, one crucial mistake is not appreciating the role of Human Resource Manager and the many variations there are for this position. Not having the right person or people could stunt your growth. Many leaders either fail to fill this position with a competent trained professional, thinking of it as an administrative role, or they fill it with someone with the wrong skill sets.
In a firm’s early days, it needs someone that can increase the speed of recruiting, help avoid some critical miss-hires, develop the infrastructure for onboarding and training the new talent that is hired, and help build the systems for accountability. Having the right person in this function can accelerate your ability to grow and scale and takes a tremendous amount of pressure off the other leaders in your organization. Often organizations fail to hire because they do not want to make the investment. What they do not realize is that while there is not a financial statement line for failing to fill positions fast enough, failing to fill positions with the right people, and the cost of all the lost productivity in the organization from failure to fill this role, these are real liabilities with real price tags. Essentially having the right person can pay for itself at a minimum multiplier of 10. You can never recover the lost revenue and profit in the lost time from not adding the human resource person to your infrastructure in the first place.
Visit our business coaching page for more information or call  Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

How Do You Find Your Purpose?

If yours is like many organizations, you and your competitors are trying to serve a similar purpose to your respective clients. That is true if you look only at the surface. It is how you see the challenge of purpose that counts. Most times I find leaders trapped in a box. That box revolves around existing products and services and does not consider the problems and challenges of people they want to serve.

By finding your organization’s unique purpose, you can move with the changing needs of your customers and evolve your products and services. Too often business leaders are trying to force the external world to buy what they want to sell. What they fail to consider is whether what they want to sell is a real need, and whether there is already too much supply solving that need. If the need is already well served or over served, then pumping more supply into the market without identifying and addressing a new critical need for their buyers will surely result in a painful journey for them and their colleagues.

5 Lenses of Purpose

When working with leaders to assist in their strategic planning session, we work on defining purpose. A common challenge is to help the leadership team find and articulate their purpose. You may wonder how purpose is discovered. I believe you can find your purpose by looking through 5 lenses:

  1. Disrupt an Industry – Airbnb changed the lodging industry forever. They made a very cost-effective and easy way for anyone to list their space and to book unique accommodations anywhere in the world. By doing so they made traveling more affordable and accessible for many people.
  2. Uncommon Service – Provide service at a level that goes beyond your competition in a way that is essential to your target customer. The traditional companies I think of are Ritz-Carlton and Nordstrom. In a less traditional sense, think of Amazon, where you know you can go to their website and find almost anything, 24/7, at the lowest possible prices and have it delivered to your doorstep, in many cases the same day as you ordered it. And all of it done with a few keystrokes. Most vendors on their side will allow you send your purchase back for free if you are not satisfied. The challenge with service is that it is like an escalator that is always going down. Once you have delivered something considered extraordinary the first time, it becomes standard the next time. So you have to keep trying to improve your service levels every year to stay on top.
  3. Change the World – We have so many large societal and natural problems that you can address as a for-profit or not-for-profit. I am proud Board Member and Red Jacket Society Member at City Year, where we believe education has the power to help every child reach his or her potential. We recognize that children in high-poverty communities have external obstacles that can interfere with their ability to both get to school and be ready and able to learn. City Year helps with these challenges. On the for-profit side you have entrepreneurial mavericks like Elon Musk, who is trying to prove through Tesla Motors that electric cars could be better than gasoline-powered cars. The impact of such an innovation will have profound impact on issues like global warming and use of natural resources like fossil fuels.
  4. Excellence – There are always ways to change the features of products — increasing their speed, beauty, functionality, etc. No company is going to get it right with every product, but Apple, Samsung, Ikea, Dyson and 3M are companies that have produced products that have really stood out from their competitors in specific categories.
  5. Information and Communication – Technology has caused this category of purpose to explode over the last 10 years. Dominant in this conversation is Google, but you also have to consider Facebook, WeChat, WhatsApp, and the myriad of others that allow people to share information, find anything or anyone, share knowledge, discover and communicate.

I recommend that you look through these five lenses and determine which of the five you are really passionate about. Then ask “what purpose can we serve within that lens” within an industry or across industries that is not being served to the level that you believe it could or should be served. The key is to think big! Consider your purpose to be a pursuit rather than a destination. It will be a mantra that you and your organization will need to constantly improve and perfect.

Head over to our business coaching page or call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.