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Making the transition from being the business owner to being the business leader

Making the transition from being the business owner to being the business leader
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As a small and medium-sized enterprise (SME) owner, are you leading the business or simply managing it?

The skills required to be a business leader are often very different to those needed to grow and develop the company. Eventually, a business owner is likely to run out of personal capacity and become a constraint on the SME’s ability to grow and develop. As such, it is time to start to lead the organisation rather than manage it.

Leadership in this context therefore starts by building an effective management team, which ensures that your business becomes sustainable and isn’t reliant entirely on you. A SME that is reliant on the owner is largely valueless. You can think of it in terms of the classic hub and spoke structure, as it all works wonderfully well until you remove the hub!

As important as the structure is the talent in the business. Often, such talent is not developed, and staff members are put into roles unprepared for it simply on the basis that they were good in their previous position. Likewise, the business owner is often very loyal to employees who have supported them in the early days. However, unfortunately, as the business grows sometimes the employees don’t grow with it. A SME owner needs to recognise this and, over time, bring individuals into the organisation that can help take the business onto the next level. This does require tough decisions to be made that often don’t due to misguided loyalty.

This also means the business owner looking at bringing in/developing skills and talent that are complementary to their own. Not being afraid to have a mix of skills in the team is critical. Often owners will recruit in their own image! Belbin Team Roles is a great tool to analyse the management skills within a team to see how balanced they are.

Assuming the appropriate structure is in place and the individuals in the roles are fit for purpose, their on going nurturing and development is critical, and, as such, should be high on the company’s priority list. This includes the business owner being self aware enough to look at his or her own development.

Cost is often an issue when it comes to investing in management development, without realising the business cost of poorly trained managers or SMEs losing their top talent due to the frustration of not being developed.

Thankfully, nurturing talent in the business can be done in a number of ways: 

  • Preparing for a new role through managing small projects
  • Coaching/mentoring to give an external perspective
  • Personal development courses, of which there are a myriad of ways these can be delivered these days, with classroom, web, combination, etc.
  • Allowing people to learn by their mistakes/not afraid to take risks
  • Not focusing too much on the input, but more on the output, i.e. often there are many ways to achieve a goal, not just the boss’ way!
  • Setting challenging goals and targets, whilst providing the support in helping the team achieve them

In summary, leadership in an organisation starts at the top.

Do you recognise the talent within your business? Difficult decisions need to be taken to adapt and change people, as well as structures, as the firm grows (or in anticipation of it growing). So, are you prepared to make a short-term investment in the development of your people in order to support the delivery of the long-term business goals?

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