Entrepreneurs often experience a period of growth, which may come in many forms. It may involve buying a business, setting up an entirely new company, or expanding production facilities.
Common to all these events is that you step into something new. It may be the first time you have to expand your building, carry out a due diligence process when vetting a company you may acquire, or work through human resources policies and procedures for an operating company you are launching.
When doing anything new, companies usually have to acquire new skills and experience to handle unique situations relating to expansion. As an owner, you build your business around great staff, but when you face new things the people on your team may not have worked through the decisions involved or set up the systems and processes related to that kind of growth.
Signs may begin to emerge that additional help is required. It is often difficult to project the scope of time or expenses involved. There may be a lack of clarity about the next steps in the process you are trying to manage. It may be difficult to foresee the major milestones that will take you to the finish line. When you consider how your team will handle the change, if you are not sure they have the expertise to take on the project there is a good chance you will face a skill gap at some point in the process.
Companies have a few options. One is to hire the talent required. This works well if the people are available and you know what to look for. But many times the entrepreneur does not need that skill set on staff permanently or the skills and experience needed are changing quickly as the needs of the growth opportunity evolve.
Consultants can often fill the void. They can bring unique experience and also flexible work arrangements, from hourly to a fixed contract on secondment. Essentially, the arrangement can be adjusted around the needs of the entrepreneur.
“These situations can change fast,” explains Trent Norman, Chief Operating Officer at Frontline Industrial Solutions. “When you are buying a business or restructuring around an opportunity, you need qualified people able to make the decisions that need to be made. Many times there is a need to ramp up your management and support teams quickly.”
Norman should know: Frontline’s management and technical staff help their clients through periods of growth on a consulting basis.
“We recently worked with a client to help him analyze a potential expansion to his agriculture processing facility,” explains Norman. “He knew his commodity and the market well, but needed assistance in determining the scope and capital investment an expansion would require. Our agricultural engineering specialist consulted with him to complete a full feasibility analysis, including production volume analysis and process flow analysis, and then created a 3D model of the facility and the site layout. Once the size and scope of the project were determined, an initial capital cost estimate was completed to allow our client to determine the budget he’d have to consider to move to the next level of the project. Obviously, these are crucial steps for entrepreneurs to take in any investment decision.”
Gaining relevant skills
Hiring engineering skills on contract is common, but entrepreneurs are increasingly seeking more traditional management talent on a short-term basis.
In Saskatchewan, the do-it-yourself mindset that served the farming community well is not always the best for making complex business decisions. For example, when a company buys a business, many factors influence the success of the integration and ongoing operations.
“Acquisition due diligence can be difficult because you need the skills of many different types of people working on the deal under intense time constraints,” explains Norman. “Due diligence is by definition a short-term project that requires expertise across a broad spectrum of business areas. Crucial considerations around finance, accounting, insurance, and contracts will be key, as will the ability to assess the relevance and fair market value of the assets and capital equipment on the company’s balance sheet. Beyond the contracts, agreements, and assets, the single most important aspect of any company is its operational ability. As the saying goes, culture eats strategy for breakfast, so without strong human resources management expertise, many acquisitions will falter if the strategy planned for the business cannot be delivered.
When you are buying a business or restructuring around an opportunity, you need qualified people able to make the decisions that need to be made. Many times there is a need to ramp up your management and support teams quickly.
As Director of Human Resources at Frontline, Cara Petrovicz explains that in her experience, this is one area where many entrepreneurs need a great deal of support. “I recently worked with one client that was starting a new production facility from scratch. They had various operating companies around North America but had no local human resources staff and limited understanding of the culture or legal framework in Saskatchewan. In a matter of months, we helped our client build the company’s organizational chart, create and define the job roles and descriptions, and put in place important human resources policies and procedures, as well as developing their employee handbook. In working intensely with our client over a relatively short period of time, we conscientiously assisted in building the desired corporate culture as the organization took shape. With all this in place, an aggressive and successful recruitment process rolled out smoothly.”
Timing is everything
When making management decisions, the ability to decide quickly is often crucial to a successful outcome. This is true when considering opportunities for growth, but also when handling difficult situations within an existing operation.
Even the best-run companies will have to deal with curve balls thrown their way. Petrovicz reflects on one recent experience. “One of our clients was presented with a harassment claim.” The client’s management quickly realized they did not have the in-house staff or experience to properly address the situation. “In a situation such as this,” Petrovicz explains, “timing is crucial. Management could not sit back and recruit human resources staff that had experience in this area. We were asked to help management through the process beginning with investigating the claim. After interviewing the employees involved, we worked with the owner through to a resolution. The owner then proactively engaged us to consult on reviewing and updating the company’s human resources policies and rolling out a comprehensive, companywide sensitivity, inclusivity, and harassment training program, which we delivered.”
An entrepreneur’s success depends heavily on their management and staff. This team evolves over time. As an entrepreneur, it is crucial to ensure you have access to people with the right background to help make decisions in the business and handle complex situations that arise.
First published in the June 2018 edition of The Business Advisor.