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HOW A BUSINESS OWNER NEEDS TO TRANSFORM INTO A LEADER THE EVOLUTION OF SCALING A BUSINESS
My 21 years of owning a business and the interactions I’ve had with other CEOs recently brought to light an interesting observation of how businesses evolve. In the early stages of a small company, scaling is always going to be limited to the skill set of the person who starts the business. Let’s take a look at a business as if it’s a house with two areas: a front and a back. Both sections are pivotal to keeping the house intact, but they serve different purposes. The front of the house is your customer-facing portion. Your customer service representatives, salespeople, and anyone else who is front-facing works here. It’s crucial that the dialogue, terminology, and experiences that occur here are consistent. Otherwise, you won’t be able to provide a unified front for your customers. Once the front of the house does its job and provides your product or service to a customer, the back of the house comes in and fulfills their duties. For example, let’s say your business is a bakery. Well, the front of the house is going to display that pie, but someone has to bake it. The back of the house is your operations and production. They process orders, create the product or service, and make sure it gets where it needs to go. When someone starts a business, its success is based on the skill set of the leader. The natural tendency of an entrepreneur is either toward the front of the house or back of the house. Most business owners in their early stages can succeed for a short amount of time managing both on their own, but the growth of a business hinges on the ability to find a counterbalance to the owner’s prominent tendency — if you’re a back-of-the-house person, you need to learn more about the front. If you’re a front-of-the-house person, you may need to focus more on the back. Many leaders can get past this roadblock, but they begin to struggle when their business reaches its next growth plateau.
Eventually, every business owner needs to take a step back and hire people who will augment their skill set and provide expertise in other aspects of the business. A growing company will always reach a point where it requires leadership at both the front and the back of the house. Perhaps the volume of sales coming from the front can’t keep up with the back. Or the production at the back is too far ahead of sales at the front. These failures eventually land on the customer, which creates a problem. The only option at that point is for the leader to step in and oversee both parts of the house. It’s not natural for an owner to detach from what they are naturally good at in order to learn the other half of the house, but to be an effective leader, it’s absolutely necessary. To become proficient at both sides of the house, you have to do a lot of soul-searching. It requires taking inventory of your strengths and weaknesses and finding help in the areas you need to grow. You also have to learn to let go of your desire to control, and for most entrepreneurs, this is the toughest part. You can’t keep doing everything on your own. 90 percent of businesses fail in the first five years. The ones that make it to 15 years and continue to grow are few and far between because most owners can’t let go. Making the adjustment from business owner to leader requires a mindset shift, and failure to do so is one of the most significant reasons companies stumble. And I’m no different. My shift from business owner to leader has been a little slower than I’d like, but I’m excited about the change. We’re developing good systems and accountability metrics. We are working on streamlining everything because we can always be more consistent. I love the direction we’re heading, and I can’t wait to see what the future holds.
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