Skiba Consulting wanted to find out the keys to success during major business transitions at small and mid-sized businesses. We interviewed 24 leaders of privately held companies that ranged in size from $3 million to $150 million in annual revenues. They came from industries that included manufacturing, services, construction, distribution, and printing.
The transitions faced by the companies were almost always initiated by the company leader (the owner, president, CEO) either in support of the leader’s vision or as a reaction to changing business conditions.
The roadblocks to success faced by these companies were fairly diverse:
- Difficulty in finding the right people for key leadership, management, or technical roles,
- Very tight deadlines required by a market opportunity or client requirements,
- Outdated business or manufacturing processes,
- Lack of clarity on leadership roles within the company,
- Unclear understanding of a market need for new products or services,
- Lack of planning or project management expertise,
- Lack of a roadmap for where the company is going and how to get there.
We found that even with the diversity of challenges, the path to success relied on a limited number of factors: (1) Put the right people in the right roles, (2) Plan for success, (3) Be realistic about the time required for success, and (4) Utilize outside resources as needed to fill in the gaps in internal capabilities.
- Put the right people in the right roles. This was clearly identified as the most important element of a successful transition, and was mentioned by most company leaders. We were surprised at how strongly this was emphasized as the number one element to success.
- Plan for Success. Regardless of whether the transition is a leadership change or a change in company direction, it is important to put together and follow a strong plan. Planning becomes more important when the risk is high or the time frame is tight.
- Be realistic about the time required for success. Owners, investors, and employees need to clearly understand the time required to implement changes, and agree to a realistic schedule. This helps everyone stay focused on their role in the overall project and to understand how meeting their timelines affects the success of the entire project.
- Utilize outside resources as needed to fill in the gaps in your internal capabilities. Business owners from small and mid-sized companies utilize external resources strategically. They go outside of the company when there is a need for specific expertise that is not available internally. They also go outside when an unbiased outside viewpoint is needed.
Change is the norm in business and should not be feared. It can come in the form of opportunities such as growth that requires business practices, major new clients, transitions to new leadership teams, or challenges from declining sales in a competitive marketplace. Successful companies are not afraid of change, but recognize the need for action and take the steps necessary to successfully go through the transition. Based on our research, the keys to success are:
- Put the right people in the right roles,
- Plan for success,
- Be realistic about the time required,
- Utilize outside resources when needed.
Download the full white paper at http://www.skibaconsulting.com.