Tim Hastings is the Co-Founder of Ford Hastings, who specialises in senior board appointments and succession planning in fast-growing, entrepreneurial businesses. Tim has gained over 20 years’ experience helping high growth companies which are often privately-owned with VC or PE backing. Over this time, Tim has developed a network of professional investors, high net worth individuals, private offices and Non-Executive Director contacts across a broad range of sectors and industries.
How often do we hear the words “our people are our greatest asset” in businesses of all shapes and sizes? And how often do we find that when we look under the surface that this is not the case?
Hiring people who can operate well in an environment where being hands-on is not a shortcut to doing the job properly is a tough gig and is a different challenge to working in a more structured, well-funded corporate environment where everyone has heard of your brand.
This was again brought into sharp focus last week at an excellent roundtable dinner for 12 business owners held by entrepreneur community, The Supper Club, where we were invited to share our experience of building up effective senior leadership teams for fast growing private companies. The evening was ably chaired by Nick Gill who as CEO at David Phillips has successfully guided his business through two rounds of equity funding and grown the business to sales in excess of £50m. Here are some of the take-aways from the evening:
Establishing A Team
It’s important to establish the business requirements and the team you need to fulfil them. To understand the business requirements, you need to set the business goals. You then need to find the gaps between “the plan” and the day to day reality of running the business.
Be honest about both your and the company’s strengths and weaknesses and have clear briefs before you start to recruit to fill any senior position. Ensuring that everyone in the team has a contract and that KPIs are clear and understood are also vital.
Selling Time Horizons
Are you wanting to sell and if so when? Think well ahead. Things always take longer than you think and it is essential to bring together a senior management team with the right skills and experience earlier rather than as a knee jerk reaction. Allow for an orderly succession process. We still see far too many businesses where all the value and relationships sit with the founder. This will not work and is neither scaleable nor easy to attract funding or exit acquisition interest.
Future Proof Your Business
Attract and retain people with the ability and enthusiasm to learn. You can only look so far ahead so be realistic. Did anyone see uber coming 10 years ago? What will the business landscape be like in 2027? You don’t know so you need to be flexible. There has never been so much uncertainty as there is today. So as entrepreneurs, how can you turn that to your commercial advantage? Flexibility and talented leadership and a growth mindset are the answers.
Pitfalls and Problems
Building a senior leadership team can be fraught with pitfalls and problems. As a founder or business owner you are good at what you do but hiring senior team members can be stressful as it is not something you do regularly.
Consider hiring an external expert to check from the outset what you are trying to achieve and what the options are. Don’t pick advisors to be your Non Executive Directors. Instead, pick someone with a commercial or business background who has successfully run, grown and exited their own business. Their experience will be invaluable.
This adds fresh layers of interest, complexity and opportunity for most businesses. As a business owner you need to be professional from the start. Have your team operated as if you are investor backed in advance? Look at your finance function, is it adding any value or just producing the accounts and is it fit for purpose for the next chapter? What is the forecasting function like? This will need to stand up to more rigour and scrutiny in a new structure focused on growing sales and profits faster than you have been doing to date.
Building a Senior Leadership team is a key facet of your business strategy. Aligning your leadership and business strategy in the context of your business goals and time horizons is money well spent. The opportunity cost of not doing so is high and will likely inhibit growth in the future. Therefore, invest in the design of your business and leadership strategy now, in order that you can be built to sell in the future.