In a webinar on April 27, two partners of Newport Board Group presented to an audience of business founders and CEOs. The topic was how owners of emerging growth companies that have gotten off the ground and are trying to grow to scale should think about expanding and upgrading their management team.
The webinar began by presenting short bios of the presenters, touching on a passion to use their extensive management experience to assist entrepreneurs that has brought both to Newport. Susan Kearney is a builder of technology businesses who is a Newport partner in the Washington, D.C. area. She is a veteran of Oracle sales and marketing. Lynn Lednicky has been a senior executive at Dynegy, a leader in the power industry. He has deep experience in strategic and business planning and joined the Newport practice in Houston.
In the session Susan and Lynn presented a wealth of practical advice about management solutions.
The below is a summary of some key points they made.
What is the typical catalyst that leads an entrepreneur to finally take action to build or augment their management team?
Both panelists mentioned that entrepreneurs typically start to think about this step a while before they take action on it. It is easy for entrepreneurs to come to feel overwhelmed by management problems,with not enough hours to do all the things they need to do. The determination and resolve that led them to start a business make them feel they can solve the situation by taking on more work for themselves. But it is also at this point that many entrepreneurs start to feel that the business isn’t fun anymore. They are keenly aware that they don’t have experience running a company with as many employees as they now have. They simply haven’t operated before at the scale where they’re now operating.
Lynn Lednicky said that while it is never too early for an entrepreneur to start to think about building a management team, the issue often comes to the fore due to frustration caused by stall in the company’s growth or some internal dysfunction. At this point entrepreneurs have to ask themselves: Where am I trying to go? What am I good at? What am I avoiding doing? Take an inventory as to what you like to do. The answers to these questions should be a template to start down the path toward finding a management solution by putting the right team in place. This can be a good time to bring in a Fractional CMO for an independent viewpoint.
Should you bring in a fractional CMO?
It might be the way to fire up your marketing and start to build your management team.
Susan Kearney said she has seen instances when a company reaches a pivot point to expand its executive capacity: a large new client requires that the company ramp up its delivery capability quickly. She also suggested that business owners start from the earliest days of the company to build a “mental pipeline” of people who might be interested in joining the business.
Lynn commented that inflection points are common. They are a function of growth. What worked when the company was at $5 million in revenue just doesn’t work at $15 million. Companies that anticipate and start thinking about the next inflection point before it arrives are likeliest to be successful.
In the second half of this webinar report, we will recount what the panelists said about two other issues central to the success of emerging growth businesses: finding the right role for the entrepreneur who steps aside from running the business day to day and what kind of person should be brought in to be the CEO.
