It’s no secret that CEOs have a difficult job; from managing the financials to dealing with challenging staff, the list is endless. There are fundamental pain points that every CEO is likely to encounter in some form but for a CEO of a growing SME these issues can be particularly challenging. In this blog we take a look the top five challenges for CEOs and a few ways in which CEOs of SMEs can navigate these issues.
Maintaining company culture
When you’re running a small business in startup phase with a lean team in place, your company vision and values inform everything you do. Sometimes as you grow, however, those ideals and objectives that defined the business in its early years can become diluted and overlooked. Sometimes this is a consequence of hiring a lot of new people or it could be a result of the business diversifying into new markets as it grows, or more likely a combination of factors.
Your company culture will inevitably change as the business grows but that doesn’t mean you have to lose your core values. Just being mindful of this and creating policies and company guidelines will go a long way to protecting company culture. If for example, creating a good work/life balance is an important part of your business ethos, then make sure you input policies to ensure that it is protected.
In a small business you can take it as given that everyone understands the company values, but as you grow you must make sure you have policies and initiatives in place to ensure your values are crystal clear to everyone in the business, particularly new hires. Make sure you communicate clearly what you stand for as a business in your internal communications to staff so that everyone in the business can become an advocate for these values. Lastly, create opportunities in the business for your staff to interact and share their views and experiences of the company and what makes the culture unique.
Hiring the right people
For a business to flourish, it is vital that as CEO you bring in the right people with the right expertise. Hiring the right people with the appropriate skills will enable you to drive the business forward whether that’s through developing new products, entering new markets or improving existing systems. Likewise, maintaining your company culture relies on hiring the right people who will work well together to achieve the company’s vision.
But it’s not straightforward. In fact attracting and retaining talent regularly ranks as the number one concern for CEOs year after year and for good reason. Hiring the wrong people can have a hugely detrimental effect on a business. There are no easy answers but making sure you get meaningful advice from HR, your board advisor and recruitment professionals, where appropriate, is the first step when it comes to making sure you hire the right staff for your business. But it doesn’t end once the recruitment process has finished, CEOs need to consider how they will retain staff and incentivise staff longer term – we discuss eight ways to motivate your staff in another blog.
Staying focused on strategy
Another one of the top five challenges for CEOs is that they are under huge time constraints and have a wide range of demands on their time. This is particularly true in a growing SME where a CEO may have to wear many different hats. It’s hard to focus on strategy when you’re juggling marketing, HR, IT and sales all in one day. But time pressures are not going to go away and will likely get worse as the business continues to grow.
To combat this, it’s vital that CEOs keep strategy at the forefront of their minds every day. You will get pulled into the tactical running of the business; that’s inevitable and even essential in the early days of getting a business off the ground. But as the business grows you have to prioritise and focus on strategic issues, like how you can improve your manufacturing or service processes, where the growth opportunities are in your market and where vulnerabilities lie in the business. Learning to work on the business rather than in the business is key.
In the past, cyber security issues were something only large businesses with huge amounts of data had to worry about. That’s no longer the case and this now makes it into one of the top five challenges for CEOs. Government statistics report that two in five small businesses (42 per cent) identified at least one cyber breach or attack in the past 12 months. A cyber attack can have huge repercussions from business disruption through to reputational damage and loss of intellectual property, all of which could have lasting damage on a business. Data breaches can also result in regulatory fines.
Managing cyber security can be a huge challenge for SMEs with limited IT budgets but there are some actions which CEOs can take, including rolling out staff training, instigating a thorough IT security policy, carrying out regular risk audits and ensuring you have appropriate protections in place for your systems.
Staying ahead of the competition
For a business to prosper long term, it is essential that it stays ahead of the competition, but this can be challenging for a CEO in charge of an SME which is competing against more established companies. However a big budget is not the be all and end all, in fact creating a superior product or service is often down to listening to your customers and interpreting their needs more clearly than the competition. As we’ve discussed in another blog, product innovation can play a vital role in driving business growth and it should be a key focus for a CEO. SMEs also have another advantage in that they can often adapt their services and products far quicker than larger businesses. CEOs should take advantage of these benefits to stay ahead of the competition.
Summary – Top five challenges for CEOs
While SMEs may not have the resources or in-house expertise of their larger counterparts, their size can play to their advantage. SMEs are often more agile and can take quicker action than large businesses and this is a real benefit when tackling strategic challenges. Of course, there will be times when a CEO requires additional support and this is where an external board advisor can really help.