A 5 minute read
How to Create the Right Management Board
Creating the right management team is imperative to any company, whether it’s a multinational or a start-up. In order for your business to thrive, you need to create the right management board structure comprising the right people who will support, build and maintain the growth of the business.
This is the fourth article in a series (you can read the first on Business Plans, the second on Business Culture and the third on Business Strategy Implementation if you haven’t already) created for business owners and enterprises offering advice gained from decades of working with diverse businesses, and more recently from intelligence shared during HM War Room sessions.
I have witnessed first-hand that all too often owner managers bite off more than they can chew. You can have the idea, business plan and investment, but without the right management team you are more susceptible to committing mistakes which more often trip up an amateur. Although it’s natural to want to do all the work on your own terms, on the basis of a perceived quality of work … you can end up overstretching yourself and increasing your workload reducing your ability to bring quality to the business. So perhaps one question to ask yourself is: what can you delegate?
Finding the right mix of management skills and people is vital, but this mix is also completely dependent on the culture of your company. Some companies prefer to hire management who have ‘the right skills’ and others prefer to hire ‘the right personality’ – neither is wrong, but the choice does require careful consideration.
There is much debate about personality types of leadership and management, what is highlighted here is a structure and the activities associated with key roles necessary to motivate a business to succeed.
The following tips will help you in your search for the right management team, and explain the key management areas where you will most likely need expertise. As each role does not (or should not) stand alone, it is crucial for people in these positions to work together in an open and transparent way to optimise the health of your business.
The Chair / Chairman
The role of the Chair / Chairman is to control the board and share any wisdom and experience with their senior management team. They will oversee the implementation of the business plan, and will make sure that the people involved are continuously reaching their key targets.
A good Chairman will be in touch with the CEO and other senior members of the team on a regular basis (at least weekly). They are often ‘the face’ of the business and are active networkers.
The finest Chairmen are ‘seen and not heard’ (ie, not necessarily the most high profile person in the business) but are extremely influential and highly respected both inside and outside of their company. They can also act as a confidante for the CEO, and should manage board meetings with iron levels of control.
If things aren’t going well, the Chairman needs to address issues quickly and effectively.
CEO (Chief Executive Officer)
The CEO is responsible for the smooth running of the company, and is ultimately responsible for any failings too. A CEO will determine the company’s strategy and ensure it is moving in the right direction at all times. Every company needs a CEO to drive the business forward. The CEO will hire the best and fire the rest (if the CEO is doing their job well, that is).
The best CEOs aren’t busy; they delegate and accomplish everything through other people by empowering teams and individuals to act in the best interests of the business.
COO (Chief Operations Officer)
The COO typically oversees all areas of the business that requires operational detail. The COO will be much more hands-on than the CEO, and will ensure the smooth running of the day-to-day activities rather than taking an overall perspective. If your COO is doing a good job, then they will be continuously feeding back to the CEO on the running of the company and any issues that call for the CEO’s attention.
A COO brings all of the internal departments together and makes sure things are running smoothly. They will be ‘the face’ of the company internally, so should be a personable leader and encourage employees to adopt a constructive work ethic at all times. They are integral to the development of the business culture so require the people and communication skills to bring people on-board with changes.
CFO (Chief Financial Officer)
The CFO will handle the money, and reports directly to the CEO. The CFO has a number of very important responsibilities, including: reviewing and analysing the company’s financial performance, preparing budgets and monitoring the company’s expenditure.
If you want your business to make money and don’t have great mathematical skills in-house already, then you will need a CFO. They will keep an eye on your cash flow, and make certain it’s healthy and profitable.
Too many CFOs get bogged down in cost reduction. They should also have the ability to see and advocate opportunities to improve revenue and in particular profitability. Try focusing on the future of the business, visualise how you could achieve this, and put a plan together. Developing an action plan gives your business an end point from which to work backward, agreeing step by step changes necessary to achieve your goals.
CMO (Chief Marketing Officer)
Marketing isn’t all buzzwords and jargon. In fact, if done well, it can spell the difference between fortune and failure. Your marketing strategy should support your overall business strategy, and your CMO will take ownership of your marketing/sales strategy and put it into practice.
The CMO should have a clear understanding of your company’s industry, and with this knowledge, aid the roll-out of your product or service by ensuring that its position in the marketplace is right. There are very few marketplaces that are not overcrowded, so it pays well to keep up with your competitors and hire the best CMO to devise and manage your marketing plan.
Your CMO should position your product or service where it can be seen, and think about where it sits contextually in conversation. Marketing isn’t used with force; as a minimum it should stimulate your target audience, raise the awareness of your product or service and make people want to do business with you.
CTO (Chief Technology Officer)
The role of a CTO has become prevalent in the age of technology-based industries, and they will devise all IT framework and technology in your company. The CTO will support the overall business strategy with the IT infrastructure, and will most likely manage your internal IT team, where he or she will allocate roles and responsibilities.
The CTO will also be external-facing, regularly in contact with IT suppliers and vendors to ensure the smooth running of the business. He or she will be the principal contact at executive level if any issues arise, and will report directly back to the CEO or board of directors.
A good CTO will create strong working relationship with the company’s stakeholders. They will bridge the gap between the technology and the business, so it is imperative that the CTO not only understand the needs of the business and their colleagues, but understand the customers’ wants and needs too.
(NED) Non-executive Director
A NED is on the board of directors but is not part of the senior management team. They might hold shares in the company, but are not employees.
There is a significant difference between the role of a non-executive director at a large company and a start-up. A good NED will act as the ‘voice’ on very important decisions, and will have a full understanding of the business. In short, they won’t bother with the day to day stuff and are focused on the long term results.
A good NED will bring a wealth of experience and contacts to the business. Beyond that they should also be a good fit with the business and so personality will be a key consideration. In appointing a NED you should look for good qualities in that person: are they willing to get stuck in? Are they objective and do they know the right people? Ultimately they need to be able to help you grow and achieve your business goals.
Building Business Success: The Series
You may also be interested in the other articles in this series: