The rise of the celebrity entrepreneur - a la Dragon’s Den and The Apprentice - would have us believe that a successful business is based on one individual, a single driving force. However, for most businesses this simply isn’t the case. Despite being the face of Virgin, Richard Branson once famously said his success was founded upon employing people better than himself, giving a vital clue to one of the secrets of his success: the importance of a good management team. Undoubtedly, having a strong figurehead is important, but it’s the supporting team that really forms the foundations for a successful business. So how can it be achieved?
One of the key elements of building a sustainable business is ensuring that it doesn’t depend solely on you. At some point you may want to sell your business, step back or retire, so if you’re central to all business activity and decisions, you’re setting yourself up for a fall. What will happen when you’re not there?
This is similar with clients. If you own all the client relationships, they’re naturally going to be unnerved if you suddenly step out the picture. You need to build client trust by gradually letting your management team take over the relationships and provide reassurance by maintaining a backseat presence.
Not letting go is one of the most common failings of business owners. Understandably, it’s a big step. For many entrepreneurs or CEOs who have shed blood, sweat and tears building a prosperous business, the thought of sharing the day-to-day running of the company with others may be a nerve-wracking decision to say the least. However difficult it may be, it is a vital stage for every successful business owner.
If taken slowly, it is easy to achieve too. It’s all about managed transition and definitely not retirement. Phasing the roles by introducing a Deputy MD role for one year prepares everyone for the next phase, when that person is promoted as your successor and takes over the running of the business. The plans are then transparent. Do not be tempted to be incommunicado in an effort to prove a point; if anything, always be available for support. It’s not that you don’t trust the team, it shows that you still care - which the team will appreciate.
A CEO’s responsibility is to provide strategic direction for the company and focus on long-term growth, not the day-to-day running of the business. It is a fantastic feeling to be able to add value by PR, networking, support and business development without the daily operational involvement. Building a sustainable business starts with employing the right people. Take a leaf out of Branson’s book and don’t be afraid to employ people with an enviable array of skills, even if they outweigh yours.
Focus on the strengths of your management team and identify well in advance possible candidates for leadership and invest in development training as preparation. Give them the authority to make decisions and let them make them! Remember, your way isn’t the only way. Make no mistake, you can still influence business decisions, but more by guiding and mentoring your management team than direct involvement.
Beyond internal policy and structure, sustainable businesses are a product of the environment. CEOs need to be brutal. Look again at your market and ask whether you’re in the game. If the market’s changing, but the company’s not, you’re in trouble. The thought of making tough decisions can be enough to drive weak managers to adopt a head in sand approach, ultimately at the cost of the business. Technology demands may dictate that strategic investment will be required and maintaining the focus on ROI and future planning will be a key to success.
Building a sustainable business requires a lot of planning, resources and a certain amount of resilience, but the stability it affords, along with the credibility, is almost certainly worth it.
