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Small and Medium-Sized Enterprises

What managers decide to stop doing is often more important than what they decide to do

Peter Drucker

How do people who have been successful at the beginning phase of a business acquire the skills to run larger ones? Coaching targets the new skills and attitudes needed and helps to develop a solid management structure from a "one man band."

Small and medium sized businesses (SMES) are usually owner-managed or subsidiaries of larger organisations. They often face significant challenges during times of transition.

From Solo to Team
The first key transition is from a single individual to a small team whose members each take full responsibility for specific functions within the business.

For small businesses, the management structure effectively equates to one individual who does “everything,” i.e. their involvement is required in every key process within the business. When the business grows and the volume of work increases, that individual may become a bottleneck, slowing down work flow. This will tend to create a “headless chicken” approach of running urgently from one crisis to another, neglecting one area to fix another, thereby creating a vicious circle.

Although there are many examples of successful businesses that operate in this fashion, it is likely that this approach will create a ceiling to the amount of activity and therefore growth that can occur.

Furthermore, the business that is completely dependent on one individual is in a dangerous position. This approach can mean that some preventative measures are overlooked, for example, planning for disasters (computer backups, access to key documents, etc) and lack of succession planning in the event of illness. Finally, for an owner manager, the pressure of running such a business may be unpleasant, without providing time to enjoy their achievements.

Receiving our Leadership Facilitation or Management and Delegation packages from coaches who have successfully run businesses in their career is a vital investment. To implement a change to team-running requires a change in focus, whilst still ensuring the business remains profitable.

Coaching provides a space where these issues can be planned, implemented and changed where necessary. Once the team has been formed, individual and team coaching enables a fast-tracking of effective performance. Small businesses need to be fully operational under the new team to build on past success.

From Team to Board
For a medium-sized business which has implemented a leadership structure, with finance, delivery, sales and other functions delegated to key individuals, the next transition is to a large business. If the structure is not changed, once there are, say, 100 employees, the existing structure may begin to break down as in the case above.

The next step is to implement a corporate structure. This effectively means that each key individual must now embrace the leadership and technical requirements of a corporate role.

The cost of running a corporate structure, especially if external capital is required, is such that the business must be large and profitable enough to sustain these additional costs. However, if the process is not undertaken soon enough the business will be at risk without the internal controls and forecasting that are required to run a larger vehicle successfully.

Coaching of the leader and individuals within the management team will greatly assist throughout this transition process. It will deliver a change of focus from management to leadership and also provide core skills that are needed at this level. It may also help individuals to decide if this new role really is suited to them. Other key people in the organisation will also benefit from management coaching and revenue coaching.


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