Scaling a business is tough mental and emotional work. Apart from the logistical changes that need to happen (bigger teams, bigger offices), cultural changes ensue as well (more processes, more structure). Superhuman levels of energy and a knack for flying blind are no longer key employee requirements. Instead, narrower, deeper skillsets are prioritized. Suddenly your commitment to a brilliant idea is secondary to your focus on profitability (which is much less romantic). And not everyone will be happy about new aims.
Amidst so much transition, founders and CEOs need to empower three different types of managers. According to Jim Deters, CEO and Cofounder of Galvanize, “hiring good managers is one the best things you can do for your business as you scale… After hitting around 25 employees, [Jim suggests] moving toward an 80/20 workforce: 80 percent doers and 20 percent coaches.”
Unfortunately, not all founders are in love with the concept of managers. Eschewing the old-school layers of authority and process, many contemplate alternative structures—e.g. the “flat” organization, the holacracy—which claim to minimize the need for managers. But if you look into how these models work, as I have, you’ll find that while they disengage the titles from individuals, they can’t actually do away with the functions of management.
So how should managers fit into your growing organizational structure? What are their core functions? Which questions will they help you answer? And how can they support you in scaling a business? Read on to find out.
Team Leaders: When, What, and Where?
Team leaders represent the most basic level of management. They go by different names in different industries. (On a factory floor or construction site, team leaders are called foremen. In retail, the term supervisor is used.) But the function is the same.
Team leaders are responsible for a small crew of people—usually three to eight—and for keeping that crew operating at maximum efficiency. The team leader is also responsible for scheduling, problem solving, making sure the crew has the supplies and training they need. Good team leaders protect employees from needless meetings that distract them from their real work. Team leaders also integrate their team into the larger functions of the company. This is done through meetings with upper management, communications with peer team leaders, and the individual career development of each team member.
Often, being a team leader is a part-time job. The manager may also be tasked with completing some of the work that the team members do—whether it’s pounding nails or writing code. But make no mistake, even when the team leader has other responsibilities, management is a separate function. The team leader needs support and training to do it properly.
Middle Managers: How and Who?
Middle managers, sometimes derided as “paper pushers,” comprise the second level of management that begins to emerge when (successfully) scaling a business. Not long ago, organizational analysts predicted technology would make middle management obsolete. Smarter tools indeed do make it easy for today’s senior executives to gather and interpret data, even communicate/collaborate freely. Still, middle management has a role to play in 21st century organizations.
Managers at this level make tactical decisions about the allocation of resources to accomplish goals. Some of those resources are money, property, and equipment, but increasingly “resources” include employees’ skills and bandwidth. Suppose a company wants to develop a new product. Someone has to determine a realistic schedule, allocate funds to different aspects of this work, figure out how existing products will be impacted, buy new equipment, commission physical workspace, and of course, hire new people. Developing these plans is the job of middle management. Actually accomplishing the work is the responsibility of the team leaders and their teams.
Top-Level Managers: Why?
Managers at the top level are concerned with strategy. They typically have a scope of where the company sits in the larger world of its market, its competition, and its technology. Keen perspective, along with input from other levels of management, allows them to chart a course for the company’s ultimate growth and success.
This direction is turned into goals; middle managers allocate resources to achieve said goals, and team leaders execute plans. When a company is small, all these things happen but are often accomplished by the same people. As the organization grows, the roles get disbursed. They all fall under the umbrella of “management,” but as you can see, there are different skills and tools required to lead at different levels.
Do all organizations need exactly three organizational tiers between the CEO and the lowest level employee? Hardly. In many cases, scaling a business starts with just one tier between strategy and execution. Large enterprises have significantly more. The important thing is ensuring you have a designated leader to coordinate specialized teams and facilitate cultural change, as your company grows from tens, to dozens, to hundreds of people.
Looking for more insights on hiring top talent to scale your business? Check out our guide for startup leaders, particularly technology startups.