In the middle, between ‘start-up’ and ‘corporation’ there is another type of business. These are the ‘second generation’ organisations – the ‘scale-ups’- and they are flourishing. In the UK, these ‘small to medium-sized’ enterprises form more than 99% of all businesses and employ over 12 million people. If your business is an SME it will typically turn over anything from £2m to £50m and employ from 10 to 250 people.
A different style of leadership
An SME doesn’t need the full raft of corporate structures to work well, but as it grows, will need to be guided in a different way from the informal ‘family’ structures and methods you could use when it was smaller. Do you ever find yourself thinking:
- “Why does everything end up on my desk?”
- “Nobody shows any initiative – it’s like managing a bunch of children.”
- “Why can’t I get people to do what I want them to do?”
- “I do everything I can to look after them, yet they still complain about me behind my
These are all signs that your informal leadership style and structures are running out of road. Second generation organisations need to be structured more than start-ups, but this doesn’t mean ‘corporate’ systems. In fact, people moving to SMEs from corporates very often fail precisely because they try to over-engineer the organisation.
What to remember:
The needs of your company have changed enormously as you’ve moved from ‘start-up’ into ‘scale-up’.
- Your role has moved from being ‘one of the gang’ to being leader/manager of the enterprise, and ensuring its sustainability.
- Processes and systems need to be recorded, not just in somebody’s head.
- Roles need to be defined, and people recruited, to suit the needs of the business, not just to fit in with the existing team.
- Map where your company actually is on the growth path.
- Identify what this means for you as leader and manager of the organisation and change your priorities and behaviour accordingly.
- Set up or capture simple processes in every department, and for managing the performance of every member of the team.
- Redefine all roles to suit the needs of the business now, and make sure the right people are in each role.
- Don’t let sentiment or loyalty stop you putting the right roles or the right people in place – there are other ways to show these values!