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Nov
08
2017

How to grow from small business to big corporation?

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In Latvia you can find several entrepreneurs, there are those who kept on successfully growing and became internationally known entrepreneurs. On the other hand, growing from small to big business can be quite challenging. For example, adapting your management style and attitude, and constantly evaluating your employees. In moments like these, you could seek help from personal growth and business coach, who will help to increase your level of management competencies and guide you to choose the right professional approach and management style for your organization. Growth coach Martiņš Vecvanags shares where and from whom to seek help.

What’s the difference between big and small business management style?

The biggest difference is that the small business manager has to closely get involved in employee’s personal experiences, hobbies, and character traits. But in a big businesses manager can be insensitive, because other executives are responsible for employees. At this point, management becomes a technical work. Emotions have a lesser effect. In small businesses every individual is important. If in the team of 5 one gets sick – you lose 20% of your entire team. But in big organizations, it’s not as likely that 20% of your employees will get sick.

In which business managers work is harder?

In most cases, the small business manager is also the owner of the company.  This person is risking his own money and the income level. It is quite insecure because one mistake can cost you everything that you had put time and funds in. Furthermore, all decisions that are made directly affect human well-being both in the short and long term. It’s definitely not easy to manage a business. I think. being a smaller entrepreneur is more difficult. He must be competent in many different decisions. Buton the other hand, in a bigger organization crisis management, is a lot harder, because of a number of interested parties. In my opinion, there are positive and negative sides in both cases.

How to grow as a manager of an organization along with the business?

Small businesses are not characterized by certain types of forms and frames, goals, activity measurements and other growth indicators. These measurements most of the time are only used in bigger organizations. While growing, every mistakes value is a lot higher. One of my clients had a really good experience – they came from a relatively small company with a turnover of € 100 000 a year to € 6 - 7 million. At that moment owners understood – that if at one point they could cover their mistakes from their own wallet, now it’s not possible anymore as now this amount is much bigger to eliminate it by own means. That’s why there is a need for different systems, structures, and measurements to be implemented. Employees also need to understand these metrics and adjust their work to them. This motivates an entrepreneur, who is a relative beginner and a very charismatic person, to become the true leader of the organization.

The manager's relationship with employees also changes – it becomes more formal. However, it’s not always bad. For example, a company leader with 200 employees can no longer go to sauna with them, as it could’ve happened in the past. Relationships have to get more businesslike. That doesn’t mean, that the leader should not be interested in his employees at all, but managers involvement is much smaller.

When is the time that the owner must ask for a help from a professional?

When part of the employees understand that they can’t work in a new structure and system, a leader has to learn a way to work differently. I got asked once – At what point company understands that they have to learn something new? My answer was really simple – either company knows it or they stop existing (for example bankruptcy). The same thing can be related to people. As the company grows, the competition increases and competitors are constantly learning.  However, without learning along with them, competency and ability to compete with others end.

How can a coach/professional help companies and leaders?

First and the most important thing – professional help leaders of the organization to get clear with their company’s future. Decision makers are occasionally confused about what this next step is about. Most of the time people are trying to get over situations like that by themselves, but sometimes you need a help of a professional, with whom you can speak about anything and work together, to create a more accurate view of life for yourself. I’m trying to work out and show alternative scenarios that could happen if a manager takes certain action. I also help to manage a team meeting, where there is an agreement made on further actions. Finally, I teach managers to be managers, by helping them increase their level of management competencies and guide them to choose the right professional approach and management style for their organization.

What are the most common mistakes that managers make while a company is developing?

As I mentioned, the lack of communication is a mistake that all managers make. Most of the time it seems like it’s self-explanatory and employees don’t need to know all the details. After managers are left with the negative consequences. In addition, to believe that everything is going to be the same as it was before is wrong. It is an illusion - if we’ve worked this way as 10 employee team, why won’t it work when we will have 30 or more employees? But the new employees weren’t there when the company was created. New employees are here just to work and complete the tasks assigned to them. They can’t be treated the same way as everyone else. And here managers often make another mistake - the initial group of employees get special treatment and are in a privileged position. For example, new employees are not allowed to be late at work, but old employees are often late and allowed to work from home. Team culture is damaged as there is no clear set of rules for everyone. In moments like these managers need to make a clear decision – either everyone can get privileges or no one. Their game rules must be clear.

Are companies in Latvia ready for development and change?

Situations are different. I have worked with clients, that grew to be big corporations from small businesses. They obviously took note of my recommendations and were ready for it. There are also a lot of cases when small businesses are not able to grow. One study confirms that 80% of people change only when they are pressed from the outside. This means that 80% of leaders prefer to stay in the comfort zone and stagnate if they can do so. But life forces us to change to keep pace with everyday events. Some choose to resist it and not develop, staying at the current level. Managers choose not to develop until the last moment, often looking for other solutions to problems or just ignoring the problem. When they do decide to change, most of the time it’s already too late.

How to build a powerful team of employees?

First, you must want to create a strong team. But again, we are in a contradiction, because we want to achieve high results right away. However, team building at the initial stage does not necessarily mean achieving the best results. Perhaps, in the short term, with a rigorous approach, a result can be achieved. Unfortunately, it will not become a successful long-term cooperation. A leader must be ready to refuse short-term results, to gain long-term achievements. That may be difficult because most of the time you don’t have enough resources to wait for results. Secondly, it’s important to unite your team. You need to start talking about common goals, company’s mission statement, all employees must understand values on which to base their daily work. This way you create company’s culture and traditions that unite your team. The traditions, mission, and goals of the company must be constantly updated and redeveloped. In my opinion, it takes at least 1 year to build a strong team. It’s the same as building 2 people relationship – living together doesn’t necessarily mean to start a family straight away. The same can be applied to your team. It takes at least a year until people clearly understand, that the company is the right place for them. The process to create a strong team is getting harder and harder nowadays, because these days the average time one person would spend working for one company is 3 years.