Growing up in the 70’s, like most children my Saturday mornings comprised of being plonked in front of the TV (yes we had them then AND it was colour!), where I was subjected to various ‘classic’ films whilst my dad did his morning shift and my mum carried out the housework.
Over a few years, I must have fleetingly watched every Elvis film, most Road to …. films, every Sinbad, Arabian Knight genre movie and anything with Jimmy Stewart, Cary Grant, Clark Gable, Burt Lancaster or Tony Curtis in them.
I was big on the emerging hero type, the ‘against all odds’ character, basically the maverick.
One of these films always struck a chord with me.
The film was Trapeze; a 1950’s hero/romantic clichéd film where a crippled trapeze artist and former star played by Burt Lancaster sees great promise in young, brash Tony Curtis. Lancaster—only the sixth man to have completed the dangerous triple somersault—thinks his protégé is capable of matching the same feat, but only if he gives him rigorous training. However, Curtis is distracted by the new third member of their circus act, the manipulative Gina Lollobrigida. Tensions rise as a love triangle forms.
You get the picture.
The film ebbs and flows with a cat and mouse chase of the young protégée trying to encourage the retired star for one last shot at the big time.
But no matter how hard they try to achieve the elusive triple somersault it always ends in failure.
The end of the film reveals the secret ingredient of the failure in a dramatic way. You have to watch it.
It is the same with structure in a business. After selling my business and joining a larger organisation I was surprised how many re-structures a company can go through in such a short amount of time.
The reason there were so many is that hardly any of them got the desired outcomes. From 1997 until 2004 I must have been involved in around four, maybe five, major restructures. The fact that I can’t remember exactly how many speaks volumes. A new CEO or another senior head appointment, recent acquisitions or poor financial performance would always lead to another restructure…and another failure.
It wasn’t until my later years both as a CEO that I began to realise why the restructures failed (to a degree), and as an Entrepreneur why a small business struggles to get past the magic 9 staff.
Trapeze had the answer all along…
It was a safety net.
Let’s start with the larger business. When business restructures certain roles are created, and certain roles are discontinued. Over a period of time people will move from one role to another in the new organisation chart until, as if by magic, everybody has moved. That’s the theory anyway.
But what generally happens is that people cover each other, do two jobs at a time, continue their old role in the hope that nobody notices, and the business works harder to stand still.
What I did in my first CEO role was to immediately remove the safety net and issue the instruction that as from a certain date you will move into your new role and drop everything else. I took away the ‘safety net’.
I was told by a lot of clever people that this approach would fail and ‘do not do it’, but I knew just as Burt Lancaster did, that without the net two things would happen. We would crash and burn or succeed. Unlike Trapeze nobody in business gets to die.
So, we did this and guess what? We saw the cracks straight away. Yes, it was bedlam for a few weeks, but over a period of time we plugged those gaps in the new structure and actually changed the shape of the business. We didn’t do what most business would do – put a sticky plaster over the gaping wound.
Let’s now come to you guys as small business owners, Entrepreneurs. How does this apply to you?
Well, it is the same. You start the business and it’s you and maybe a spouse or partner of some kind. Things go well, and the business grows. We now have a bit of momentum and we need more people to do ‘stuff’.
Now a similar story evolves that I have seen hundreds of times:
‘I want to grow but it feels like I am alone in carrying everything. Wasn’t this supposed to get easier as the business grows? Yet instead of any additional staff releasing that pressure and helping me, everyone seems to be rowing the boat in a totally different direction, growth has slowed, costs have increased, and profits aren’t scaling with revenue.
‘My family and friends haven’t seen me in ages. Worse of all it seems like what I did to get the business to where it is now just doesn’t seem to be what will take it to the next level… I am falling out of love with it all and I am STUCK.’
The reason again is that safety net. Even with the new staff you are trying to do all the following and failing:
Thinking, selling, checking quality, worrying, covering, improving, delivering, managing the money etc. etc.
The truth is you CANNOT do all of it anymore at that level. You need to let go of key areas in the business, rip down that safety net and let the people you employed to carry out certain roles get on with it. Yes, they may fail BUT they may succeed – and BOTH outcomes are good.
This is the ONLY way to grow a business. You can see why depending on the nature of the business at a certain level it can only fail. The reason being simple: there are no longer enough hours in the day, the week, for you to cover all those roles. The business has outgrown the amateur entrepreneur and now needs professionals who can deliver.
You only have to look at the statistics of where businesses fall in the UK to realise this to be true: 99.9% of all business are less than 250 employees (5.69 million).
Out of those figures:
76% do not employ anyone (4.32 million)
20% employ 1-9 staff (1.1 million)
5% employ more than 10 staff (242 thousand)
Only 5% of business every get past the magic 10 figure (about 1 million).
They have not done the key things they need to do to release the owner to focus on the next phase.
My question for you is:
When are you going to cut YOUR safety net?