If your recruitment business employs over fifty and up to one hundred staff, where should the founder’s attention be directed? The answer depends on what you are trying to achieve.
Leading an executive organisation
At first glance it might seem that the founder’s role in a business of this size is a mere extension of the role for a staffing and recruitment agency of up to 50 staff.
In earlier articles we’ve discussed the founder’s move from controlling all processes, to starting to delegate tasks and responsibilities, to commencing a leadership team and guiding the business through those leaders.
But the breadth and complexity of the organisation will continue to change dramatically as the business grows through the 50-staff size. Now the founder is even further removed from the activities being performed. Greater responsibility is placed on the leaders, and they themselves will be delegating tasks and responsibilities to the next level of emerging leaders.
In addition, the business is likely to be growing by providing greater volume, or more variation to its services, or commencing new service lines. This increased complexity requires increased organisation sophistication and management sophistication whichever way you look – not just operational areas but from all the service functions.
The way forward is usually to develop the leadership team in greater depth. Build with resources that have experienced this before, or with those that have shown the capacity to grow to a new level. Greater delegated responsibility to execute within agreed strategic and financial parameters, and more formal processes for planning, budgeting and review.
For the founder, this is now a dramatic change from providing close support to emerging leaders. Maintaining influence on the business is through the now executive-level leadership team. Inspire the team with a vision and guide the values and culture of the organisation as the leaders execute the plan.
This tends to be the stage when some organisations consider a CEO, while others continue with the founder leading the executive team.
What a change. At this point the founder is actively building an executive team, and with that a new governance rhythm, strategic capability to plan the future, and a focus on organisational depth and capacity for the future.
The founder is removed from conversations on the operational detail of the business and instead is spending much more time considering the future: strategy, investment, organisational capability, succession, and above all, risk.
Optimising what you have build
An organisation of this size requires constant attention. Nothing stands still. People, service delivery, client acquisition, client expectations, technology.
Through the executive team, there is a continuous engaged focus from the founder on optimising, refining and strengthening the business, and preserving culture – preserving the strengths of the organisation while continuing to improve it.
Investing for the future
Growth beyond this point increasingly becomes a deliberate strategic choice rather than a consequence of strong trading.
Expansion usually requires committing resources well before the additional revenue arrives. Executive capability, systems, capital, leadership succession and organisational capacity must often be built ahead of demand. The founder therefore becomes increasingly responsible for judging where the business should invest, how much risk it should accept, and when opportunities should be pursued.
What this means for the founder
From a personal perspective, this is the organisation size where the executive team should be delivering today’s performance while the founder increasingly protects tomorrow’s opportunities by considering future risk and scouting for new ventures.
Stop leading managers. Start leading leaders.
Wealth creation can be dramatic at this level, bringing a new responsibility for the founder. Success is no longer measured simply by annual profit, but by the stewardship of increasing shareholder wealth. Decisions about investment, dividends, debt, acquisitions and risk all have much greater consequences than they did only a few years earlier.
This article is part of HHMC’s Appropriately Corporate series for staffing and recruitment business owners, exploring growth, leadership, valuation and transaction readiness. If these issues are relevant to your business, we would be pleased to continue the conversation.
