My management team is competent but not strategic. Help!

“I want to be driving this business not umpiring it,” Martin wrote to me. He had been brought into the business as CEO four frustrating years ago, and said he had inherited a management team who were “technically good at their day-to-day job but not strategic”.

Until recently the strength, or lack of it, of the management team concerned Martin, but not greatly. The business was a niche player in a thriving industry and was doing very well. Martin didn’t see any need to rock the boat.

But the fortunes of the business changed.  One of the first businesses to be affected by the global financial crisis, revenue halved and the management team descended into civil war.

The management team was fairly typical of a business that had grown quickly through good times. About half the team were hired over the past few years for their technical capability, while the other half got their seat at the management table because of a combination of intimate knowledge of the business and sheer staying power.

Martin knew that he needed to change some of the management team, but was concerned that what he would gain in strategic insight he would lose in day-to-day technical capability.

So rather than just replace some of the management team he:

• Decided that the management team should be a smaller group of strategically focused people and that their accountabilities should be widened to include the areas not represented in this new smaller team.
• Set about using self-selection to get the right people in the smaller team. He gave the original management team a “this is going to be tough, if you don’t like it leave the management team” talk, that resulted in a few people opting out of the team but staying in the business.
• Accelerated a knowledge management process to get the technical know-how out of the individuals and into the common domain, and committed to a longer term plan of replacing technical heads of department with strategic heads.
• Instigated a monthly learning agenda mandatory for the smaller management team (and optional for other senior employees) which focused on strategic and operational material rather than technical nuts and bolts.
• Hired a strategic CFO, which delighted the accountant who was much happier reverting to a more detailed role.

Martin knew that it was imperative to have the right people on board to shape the future of the business. But he couldn’t, in the short term, replace the original team and their years of experience and technical know-how with strategic promise; nor could he afford to hire senior people in addition to the original team.

He had to find a way of unlocking the potential within his own team.

Martin’s approach worked – and interestingly, as the new smaller management team focused on the five year path ahead, the most significant contribution came from the longest serving employee in the business, a middle aged fellow who had started out as a machine operator in the company 30 years earlier.

Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses.  Julia is the author of “How to Bake a Business”  and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).

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