Many business owners have developed their companies from an early stage and have built them around their own individual skill sets, experience, preferences and personalities.
That’s fine in the early stages, but it often means that vital parts of the business are run by people who are not specialists in that area. This can ultimately restrict an organisation’s ability to succeed, especially when setting out on a growth phase.
Many companies lack a full set of board and management-level business skills. They are therefore unable adequately to identify the risks and opportunities facing them, and to create and implement plans to operate and develop the business and create wealth for its owners.
See also: Shaking up your board of directors
If you want to build real value in your business, you need to think, plan and act differently. This will require a step back from the day-to-day running of the business, and adopting a different mindset.
Successful companies have longer time horizons, anticipate change and continually form, assess and implement plans for the growth and positioning of the businesses. They create effective systems and develop effective staff. Also, they ensure they have access to a range of specialist skills, either internally or externally, from marketing through operations to finance. And they do this in a cost-effective way.
The most successful businesses have some, if not all, of these characteristics. A clear strategy and vision, knowledge of market position or niche; possess an effective sales machine; and plan their finances whilst organizing the businesses around systems, not people.
In our experience, successful business owners focus on managing rather than doing and a key part of this is having an effective board team in place with the right knowledge and attributes to support a central vision which is often created by the founder.
Our best performing clients regularly assess the skills and attributes needed at board level to take their businesses forward. They identify and then fill the gaps through training, mentoring or hiring additional staff. The assessment can be done internally, or by an external organisation with experience of assessing and developing company boards.
We find that many owner-managed companies can find it difficult to reach out for external help. It is certainly a decision that needs to be taken with due thought and care, and probably marks a milestone in a business’s development.
But when it comes to making a hard-nosed and independent assessment of a business’s true board-level requirements, an internal review is unlikely to provide any real answers, and the cracks will simply be papered over.
Traditionally external advisors have been used to take the pressure off the decision-maker, and depersonalise hard decisions. Ideally the need for an independent point of view will be built into the business’s DNA, rather than starting the process when a company realizes that it has a problem.
This is by no means always possible, as businesses are not necessarily created or grown with this future need front of mind. But in our experience there comes a time in every business’s development when there is a need to step outside of the comfort zone and confront the dynamics, successes and shortcomings of a business and its board in order to move forward.
