What have you learned about scaling the growth of a business successfully?
Every successful company that I’ve been at figured out how to structure the company where the vast majority of people are in roles that they happen to be really good at and they like to do. Those things don’t always match up. The closer you can get to marrying those together, building the structure of the organization fundamentally and then finding good people that fit in that structure, you find that the total becomes greater than the sum of the parts.
How do some companies fall short in that area?
The DNA of a small company is entrepreneurial, where people wear different hats. It’s out of necessity. Let’s say there are 100 things you need to do to be successful in whatever business you’re in. If you only have 10 people that means everyone has to do 10 things. They can’t focus on one or two things they’re really good at. Secondly, those small companies can’t afford to lose people. You lose one person in a 10-employee company and it’s like 10,000 of Apple’s people resigning overnight. What happens is you see roles start being defined based on the individual because you don’t want them to leave. Oh, you want to get into management? Okay, you can be the director of XYZ, but you don’t have anyone reporting to you. And when you start to scale and become a bigger company, you have all these disparate compensation plans. You’ve got four people doing the same job when you only need one person. You have to do a really good job of defining the organizational structure so everyone understands why we’re structured the way we are. Then you articulate that to the entire company. You can’t start with the person and find a role for them. You have to define the roles and why they have to be that way.
How do start-ups and small businesses adopt that structure?
It all comes down to having a plan. I’ve worked for mid-size companies that didn’t have an annual plan. You can actually plan out this succession. “We’re 10 employees now. In two years we’ll be at 25 based on our revenue growth plan. Two years after that, we’ll be at 75.” You have a plan. When you go from zero to 10, it’s a different look than going from 10 to 50, and a different look than from 50 to 250. You need to have a plan for each one of those transitions. You can share that with your employees. I might be employee No. 8 with a certain skill set. I might be able to do other things where I can get certification from my company to become better, but I can start to map out my career path, whether at here or at another company. Then you can tell a really good employee, “I know you want to get into management. There’s no management positions right now, but lets look at the five-year plan. Lets talk about your assessment and some things you can work on. Let’s set expectations. In the next six, 12, 18 months, there’s going to be a couple management positions open based on our revenue growth. We can’t guarantee that you’ll have the job, but you’ll have just as good of an opportunity as anyone else to get that job.”
What’s a mistake often made in sales?
Most sales people don’t understand how to use the word “no.” Just because someone wants to talk to you and learn more about your service, doesn’t mean they’re a good prospect for you. Work the deals you can win. Ask the hard questions first. It’s not an art. It’s a science.
What business books are you reading?
The last one I read was “Good to Great” [by Jim Collins]. There’s a sequel that I’m about to pick up.
— Interview with Vanessa Small