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by Randal Godden, Chairman and CEO, at TEC South Africa
This article was first published in Real Business, a supplement
to Business Day which appears on the third Monday of every month.
One issue that is consistently brought to the table by entrepreneurs
or owner operators is the challenge of successfully making the transition
from an Infant business to Prime.
Business Infancy can be defined as the high risk, heavy resource
stage of any business and typically involves a lot of "doing".
The Prime stage is characterised by balancing and managing short-term
tactical and longer term strategic aspects, and success here hinges
on splitting the responsibility for "today" and "tomorrow" functions.
And, this is one area where businesses owners have to make some of
their most challenging decisions. In the Infant phase of a business,
the owner operator is responsible for literally everything. The day-to-day
tasks of running the business, whether interfacing with clients or
doing the dishes, are all considered today functions. Tomorrow functions
are those elements of the business that affect growth, and are key
to making the transition to Prime.
These tomorrow functions present challenges in their own right. One
example of a tomorrow function is finance. To grow, there has to be
a shift from basic bookkeeping to using finances to develop the business,
and this usually involves putting the necessary systems, processes
and people in place.
As the business moves away from Infancy to develop these tomorrow
functions, the business owner faces a number of choices to affect growth
and development. Basically, the organisation has to embrace the tomorrow
functions, initially at the expense of short term results.
The owner has the choice of whether to continue focusing on the today
functions and hire others to fulfill the tomorrow functions. Or, the
owner has to bring in responsible people to focus on tasks and taking
the responsibility for tomorrow functions. Successfully splitting the
today and tomorrow functions becomes the differentiator as to whether
the business makes the transition to successful growth or remains a
small infant business. It is mostly a matter of determining what your
primary skill is, and where to focus your efforts.
Invariably, more managers have to be brought on board, who won't
pay their way immediately. Until the business develops further, it
will have to forego short-terms profits. And, you need to be prepared
for this. The most significant tomorrow function, however, is marketing.
Marketing is critical not only in terms of selling to consumer but
also in business to business relationships. For example, if you are
a secondary manufacturer and your primary business is "ingredients",
you need to determine what to sell, to whom, and how to handle these
various interfaces. The challenge in either scenario is that if you
cannot afford a full-time marketing executive, who becomes responsible
for the marketing function.
The marketing role is crucial in any organisation, and requires the
key attributes of creativity as well as detailed research and analysis.
In smaller organisations, the marketing function can become a "shared" function
due to the limited availability of resources. However, as soon as the
organisation grows sufficiently, marketing should be the first specialist
tomorrow function to be adopted either on a full time, or outsourced
basis.
But, to grow your business successfully you have to go through the
marketing function phase.
In my experience, less than 10% of business managers understand the
full breadth of marketing, often confusing it with sales.
It is important to understand that selling is a today function, and
marketing a tomorrow function.
Marketing and finance are just two examples of tomorrow functions.
As the business develops, other tomorrow functions will also emerge.
Understanding the difference is only the first step. Taking the necessary
action to divide responsibility and accepting that the impact on short-term
profit is not indicative of "going backwards" but means the
business is treading a path of growth and success.
Godden is the CEO of The Executive Caucus SA (TEC). TEC is a global
networking and mentoring organisation for managers and owners of small
to medium businesses
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