It can be reasonably argued that recruiting leaders or even managers within FTSE 100 or any large multinational is a lot more complex and difficult then a small or medium sized organisation, however, this is not always the case, explains Simon Fransca Khan of Executive Search Firm Hunter & Chase.
Simon argues, ‘recruiting for an SME is arguably harder for a headhunter than for a larger company – although the recruitment fee is much less – for an SME, it is the personal fit with the chief executive or owner that is the most important, which is often a subjective criteria and one needs to work with SME client to identify what personal fit they are really looking for which often changes as the recruitment search process progresses. The cost of making the wrong choice can be devastating for an SME.’
Strong leadership is critical to the success of any business but its form depends on a business’s stage of growth. In a start-up what is required is hands-on, sleeves-rolled-up management, while large companies have managers who are less involved in the day-to-day managing. Their position is much more of a leadership role, establishing goals and determining strategy. SMEs occupy a middle position, where leaders need to manage actively and set directions. Furthermore, large organisations can afford to take a hit with a mistake in hiring the wrong person, and usually have much more rigid processes in place to ensure the wrong person is not hired in the first place! Simon explains, ‘for a plc or even private equity organisation there is a corporate governance structure and non-executive board members that oversee the appointment of the executive team. For a family-run organisation it is not such a clear process and depends on complex relationships between family members, management and advisers. Hunter & Chase usually oversee leadership changes in family run businesses as a result of organisational necessity, for example after an acquisition, or company growth, owner taking a back seat or wanting to progress an entrepreneurial set up to a more structured professional level.’
Most start ups, family run businesses or entrepreneurial organisations would at some point need a professional management, with more sophisticated processes, infrastructure and people – to continue evolving and growing. Usually most owners or small businesses wait until there is an absolute need to hire at management level, which, according to Simon, can often be damaging. He argues that ‘although it can be complex and emotional to identify successors, or even to have management brought in to take over some of the day to day responsibility, hence some of the decision making, this should be done while the current management structure or owner are still heavily involved to ensure a smooth transition to the inevitable.’ One solution suggested by Simon ‘is to create a new organisational structure and have a deputy learning the ropes or management members who don’t yet have the decision making power, with gradual handover only as they fully understand the organisation, to ensure smooth transition without the company losing its identity or owner losing control.’