Founders: Why hiring your first manager will sink your business
When do you assign someone on your team to be a manager?
It’s a decision that you — and every growing company — will make before reaching 15 employees.
It’s going to feel like a minor decision. It isn’t.
Most founders don’t give it a second thought.
Yet, this single impulse driven decision will make or break the future of your business. It won’t feel like a big deal when you hire your first one or two managers. Even so, on that day, you’re rolling a snowball that won’t be stopped.
The decision will turn your business into a bloated, expensive and unproductive hierarchical mess.
Your shiny new management layer will infect your office with ego and politics. It will slow information flow, bottleneck decision making, and — ironically — slow down everything that you’re trying to speed up.
All those things that you — as an entrepreneur — believe you’re rebelling against. They’ll creep into your business irreversibly the day you hire (or promote) your first manager.
As “The Scale Coach for Founder CEOs”, I get a front seat ride with entrepreneurs as their businesses start to take off. I see the manager snowball all the time.
One of my client’s is an entrepreneur, like you. He’s been grinding away for over five years, spending long nights in an engineering lab. His business is poised to do big things. Money is in the bank. The client list is impressive. The product will transform entire industries for the better.
Over the next 6 months my client’s company is going to double in size. In the process, and without realizing it, he’s going to make that hiring decision. It will make or break his business.
99.9% of businesses do the exact same thing. They feel like they need a manager, so they hire one. Why? Because that’s what every company does. Then they’re stuck with the results.
When do you hire a manager?
Is it when you hit 5 employees? 9? 12? 15?
Most people’s immediate response is: “Well it depends…”
If you’re thinking that right now, you’ve already started the snowball rolling. Everyone has this basic assumption: Companies need managers. That’s how business works.
Before you jump off this particular bridge — just because everyone else does — these are THE four questions to ask yourself:
1) What problem are you trying to solve by hiring a manager?
You probably feel you need more bandwidth, and thus good people to delegate to. Maybe you’ve got a great person who’s been with you since day one who needs recognized with a promotion.
I’ve seen the same logic, many times. I’ve learned “a new manager” is rarely the solution, just a band aid.
Let’s say you want to add a manager to add bandwidth.
Why do you need to add bandwidth? Because you don’t have enough time to answer everyone’s questions.
Why are there so many questions? Because your team is inexperienced.
Have you considered an internal coach for your team? What about a peer mentoring strategy? Perhaps you simply need more diversity in your hiring.
Don’t let hiring a manager be a knee jerk response.
2) Do you want to build an organization based on hierarchy?
Hierarchies are old school. Pyramids centralize information and restrict innovation. Outside of work we have an expectation of instant access to information via Google. We see good ideas get voted up and bad ones die on Facebook and Quora. Age, titles, and degrees play a shrinking role in innovation.
Remember how great you felt when you started this business? Remember how free your initial team felt to get busy and kick ass?
Don’t be too hasty to set off the chain of events that guarantees no one in your company will ever feel that way again.
Google “Reinventing Organizations” for the newest thinking on the topic. There you go… instant access.
3) What’s your personal management philosophy?
Manager is a loaded word. To me it means a consolidation of power and authority. You might view a manager as a coach and mentor. If you are giving someone a manager title, get tactical and write down exactly what that means to you. Use this description in deciding how you hire, set expectations, and coach.
When you’re done writing, ask yourself: Do these responsibilities really need to be limited to a manager role?
4) How do you want decisions made in your organization?
Manager = decision maker = bottleneck = frustration.
This is true in most organizations. To avoid this pattern, pick up the book The Decision Maker by Dennis Bakke. In it, Dennis provides a whole new perspective that asks: “Who is best suited to be the decision-maker for this issue?”
It’s a philosophy of giving away power, not taking it.
Your need to hire a manager may simply be a sign to rethink how decisions get made.
So now what?
Scale your company by thinking outside the box
Building a traditional management hierarchy is — at best — a snowball you want to think carefully about starting. There are many alternatives available.
Structure is still important. So is role clarity. A small investment of time spent considering alternatives will pay huge dividends.
I blog to help Founder CEOs on their journey from kitchen table to 200 employees. Be the first to receive new articles by signing up for my newsletter here.