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Mid-Market Companies Often can Look in-House to Manage Growth

As mid-market companies grow and expand, their leadership structures can quickly become outdated, inefficient and ineffective.

GettyImages-513949228-compressorAs mid-market companies grow and expand, their leadership structures can quickly become outdated, inefficient and ineffective. While running all decisions through a founder can work for a small organization, the only way to manage growth is through expansion of the C-suite and more democratized decision-making. And at times, a company may find all it needs within its own walls.

Mark Steranka, a partner with consultancy Moss Adams, said that many of the solutions for growth problems revolve around people, “hiring and retaining the right individuals and then successfully and fully involving them in the business.” Steranka said executives in rapidly-growing companies often become “overwhelmed” without middle management or another layer to oversee more responsibilities and decisions.

Steranka helps organizations identify the skills they need for additional management. In one example, a manufacturing organization with 60 employees was outgrowing itself. Yet when surveying the existing workforce, Steranka found two-thirds of the talent the company needed was already in-house. “This happens all the time. Everyone’s too busy to change the way they do things, too busy to delegate, if you will,” he said.

“As organizations grow too large and complex to be controlled by a small team of executives, they need to “democratize” decision-making authority.

He suggests organizations first look in-house for hidden value, then develop a compensation plan to reward the team and tie it to the company’s success. He said creating a new layer of management and promoting employees also can improve workforce morale and productivity. “I think seeing a half dozen employees promoted and given management responsibility was a signal to everyone that there’s upward mobility,” Steranka said.

Meanwhile, as organizations grow too large and complex to be controlled by a small team of executives, they need to “democratize” decision-making authority, according to PwC. When power is held closely at the top, these organizations tend to respond slowly to market developments, while stunting the growth of the organization.

Even for companies that aren’t growing as quickly, Steranka said there often is a need to develop a team that can operate independently of the founders. Aside from handling new business units and offering specialized experience, middle managers have significant influence in employee engagement and satisfaction.

“It requires founders to redefine their roles. Some don’t do that until a crisis hits. But thankfully, more and more leaders are realizing that they’ll succeed best by getting other people at their companies to step up and lead,” said Steranka.

About Craig Guillot

Craig Guillot
Craig Guillot is a business writer based in New Orleans, La. His work has appeared in Wall Street Journal, Entrepreneur, CNNMoney.com and CNBC.com. You can read more about his work at www.craigdguillot.com.