JoAnn Laing's Blog - All About Small Business

The key to scaling and continued growth is morphing from a founder-led to a team-managed company.

After founding your company, you’ve put your all (heart, soul, capital, connections, and more) into making it a success.

The major obstacle to scaling a business is that the centralized decision-making that propelled early success becomes a bottleneck. To continue growing and increasing business value, you, the Founder and owner, should consider transitioning from a founder-led to a team-managed approach. 

Future-proof your business’ long-term success by building a management team that fuels enduring impact. 

But, establishing a management team comes with its challenges, which include:

1. Leadership gaps: The initial leadership team may lack the expertise to manage larger teams or address complex operational needs.
2. Operational inefficiencies often emerge when there is a lack of scalable leadership, causing decision-making to slow down and team alignment to weaken.
3. Additionally, rapid growth can lead to cultural fragmentation, where the company’s core values become diluted, resulting in inconsistent practices across teams.

Addressing these challenges requires a planned approach to building a leadership structure that scales with the organization.

Shift from founder-led to team-managed leadership: Founders often struggle to relinquish control; however, effective scaling requires empowerment across the entire leadership team. The Founder’s role needs to evolve into that of a strategic leader who focuses on vision and culture. To achieve this, take these action steps:

1. Delegate decisions: Define the decision-making responsibilities for team leaders, allowing you, the Founder, to focus on high-level strategy.
2. Hire complementary skills: Bring in leaders with expertise in areas where you may lack depth or interest, such as operations, human resources, sales, marketing, or finance.
3. Set boundaries: Set clear protocols for when leaders must consult you, the Founder, versus when they can make independent decisions.

Define core values to rate success: A cohesive leadership team should operate under shared values that align with the business purpose. Core values should be actionable to guide decision-making and interpersonal dynamics.  To achieve:

1. Operationalize values: Translate abstract principles into specific behaviors. For example, a value like “customer focus” might include responding to client inquiries within 24 hours.
2. Utilize values in hiring and promotions: Evaluate leadership candidates for alignment with company values to ensure a cultural fit and promote staff who embody the business’s core values.
3. Reinforce regularly: Incorporate values into performance reviews, team meetings, company-wide communications, compensation, promotions, and other areas.

Encourage accountability through having clear objectives: Accountability is essential for sustaining momentum during growth. You risk misaligned priorities and inefficiencies when there is a lack of clarity in leadership roles and goals. To establish clarity:

1. Define KPIs for managers: Establish measurable objectives for each person, tying them directly to the business’s growth goals.
2. Provide feedback: Regularly evaluate performance against objectives and adjust strategies as needed to align with business needs and the evolving marketplace.
3. Create a culture of ownership: Encourage managers to take ownership of outcomes, celebrate successes, and learn from failures. Consider providing stock in the business.

Provide learning and development: Managers need tools and training to address new responsibilities and challenges. Investing in their development enhances individual performance and strengthens the team’s and business’s resilience.  Here are some steps to take:

1. Tailor training programs to individual needs and roles: offer leadership development programs focused on skills for each individual’s function, plus more general leadership skills like strategic thinking, team management, customer service, and conflict resolution.
2. Set up a mentorship program: Pair emerging or potential managers with experienced managers and leaders to facilitate knowledge transfer and prepare the next generation for the business.
3. Provide continuous learning opportunities outside the business: Encourage leaders and managers to participate in industry conferences, workshops, and networking events to stay abreast of best practices.

Build business and management resilience for the changing business environment: The ability to pivot and lead through uncertainty, marketplace changes, aggressive competition, and/or adversity is a hallmark of strong leadership teams. Businesses are always facing external pressures, which calls for resilient leaders. To get your team ready:

1. Consider various scenarios: Train leaders to anticipate and prepare for potential disruptions. While you might think of all possibilities, considering what might happen will better prepare you for the unknown.
2. Cultivate Adaptability: Encourage leaders to view challenges as opportunities for growth and innovation. Being agile and responding should be considered a strength.
3. Promote Well-being: Provide managers and leadership teams with resources for stress management, work-life balance, and mental health. Your leaders must be solid personally for them to be effective at work.

Founder Challenges and Suggested Solutions

While this is a learning experience for all, sometimes the Founder finds it more difficult than the team to transition.  Why? The change for the Founder is more personal.

Here are some steps for the Founder to transition more successfully.

Acknowledge and assess the transition: Recognize that the transition marks a shift from a broad founder role to a more focused leadership position, one that requires different skills and perspectives.  Communicate “Why,” the reasons for the transition, and how it aligns with the business’s growth and strategy. 

Plan and prepare for the transition: Develop a comprehensive plan that outlines clear goals, realistic timelines, and effective communication strategies. Then, ensure adequate resources (mentoring, training, and budget) are available to support the transition. Set clear expectations, such as defining your new role and responsibilities and how success will be measured for both yourself and the team. Transparency is key in building trust and addressing concerns; communicate the transition clearly and involve the team in the process.

Handover leadership and onboard the team: Ensure a seamless transfer of critical business knowledge and responsibilities to the team. Establish a presence by actively engaging with the team, building strong relationships, and helping them understand their roles, opportunities, challenges, and business goals. Earn the trust of your team by dedicating time to listen and learn from them, plus demonstrate honesty, reliability, and fairness in your interactions with them.

Integrate and stabilize the team:  Empower the team by delegating responsibilities, recognizing contributions, and fostering a culture of empowerment and accountability. Encourage teamwork and open communication; facilitate a supportive environment; and constructively address conflicts. Shift the focus from your individual Founder’s vision to the team’s collective mission and the business’s goals. Set and implement key performance indicators to track progress and identify areas for improvement. Frequently ask for and act on feedback from your team and other stakeholders to identify areas for growth and development and celebrate what is working.

Ensure personal growth and adaption for all: Continuously invest in your team’s individual learning and skill development to adapt to the evolving demands of leadership. Refine your leadership style, striking a balance between fostering the company’s culture and driving necessary changes. Finally, and perhaps most importantly, be patient. Leadership transitions take time, so be patient with yourself and your team. Along the way, maintain consistency in your actions and communication. 

Following the above steps, a founder can effectively transition their business to a team-managed one, empower their team, and contribute to its ongoing success.

Long-Term Benefits of Strong Leadership

A scalable leadership team provides the foundation for sustained growth. Benefits include:

1. Increased agility: leaders who make informed decisions can respond quickly to market changes.
2. Improved efficiency: clear accountability and alignment reduce operational redundancies.
3. Enhanced stability: a team has additional strengths, perspectives, and capacity.
4. Stronger culture: unified leadership fosters consistency in values and practices across the business.
5. Greater innovation: Empowered leaders are more likely to pursue creative solutions and drive long-term success.

Leadership is the linchpin of success. By successfully transitioning to a team-centric approach, defining actionable values, fostering accountability, and investing in development, businesses can build a leadership team capable of sustaining growth and navigating challenges. The journey requires intentionality, but the rewards—both for the organization and its people—are transformative.

Cyberattacks have increased in frequency and maliciousness, including phishing, ransomware, and distributed denial of service attacks against networks. Growing cyber threats to business reputation, operations, and intellectual property theft can impact your business’s ongoing viability.

Businesses of all sizes and sectors need increased cyber security diligence.  While larger enterprises have more data and often greater ransom demands, smaller business systems are usually easier to breach by hackers or bad actors.

To lower your risk of being hacked, everyone should take into account the following cyber hygiene guidelines:

• Have a risk management plan that examines particular requirements and vulnerabilities as well as facilitates incident response. Your plan should cover the ramifications of new technologies such artificial intelligence and their potential use in cyber protection.
• On a regular basis, follow release dates, patches, and upgrades on your operating system, networks, and devices.
• Make sure your passwords are strong and not easy to guess; mandate passwords should have at least 8 characters with least one capital letter, one number and one special symbol.
• Include authentication, for most sensitive access you should use biometrics.
• Consider using strong encryption on sensitive date, preferably quantum-resistant.
• Use Identity Access management and a Zero Trust approach; know what people and devices are in your business networks and what user privileges each person has.
• All employees should be educated and reeducated on an annual basis with quarterly reminders about how to use social media responsibly and stay alert to phishing attempts. Note: employees are the #1 risk for your business’s cyber security.
• Regularly back-up your sensitive business data. Think about keeping a copy of the information on a machine that is not in your business network.
• All the employees should stay clear of public networks, and if you must use one then use a VPN.
• If your business lacks the knowledge to manage the above cyber security measures, then consider using a Managed Security Service Provider (MSSP) or Managed Service provider (MSP) who can assess, upgrade, and safeguard your business’s cyber assets.

It is not just cyber hygiene that is important, but also having a strategy to stay secure and be resilient.

• Take a risk management approach. Be proactive: be alert, train staff, discover gaps in your business’s security, and mitigate vulnerabilities to reduce risks. Owners and responsible managers should be familiar with the guiding principles of the National Institute of Standards and Technology (NIST) framework: Identify, Protect, Detect, Respond, Recover.
• Now that generative artificial intelligence and machine learning tools are increasingly in use and sophistication by attackers and defenders alike, it is important to consider all components (people, technologies, procedures, and policies) of cyber security.
• The foundation of cyber security is communication. Business owners and management must coordinate their objectives, work together, and evaluate the businesses information security programs, controls, and network safety on a regular basis. Preparedness comes from the exchange of threat intelligence and innovative security advances, plus it is essential that all people using the systems receive security awareness training.
• Effective cyber security needs expertise. If your business does not have it internally, find reliable help outside. Owners and managers can always benefit from outside knowledge, opinions, and suggestions. Areas of special expertise should include policy, cyber security technology solutions and services, training, legal compliance, liability insurance, and governance.
• New cyber technologies such as artificial intelligence, 5G, cloud and edge computing, and quantum computing are impacting the landscape. It is important to understand and use them in defense of your business.

Cyber security is becoming more sophisticated, plan and act now to defend your business from cyber-attack.

Cyber Security

Cyberattacks have increased in frequency and maliciousness, including phishing, ransomware, and distributed denial of service attacks against networks. Growing cyber threats to business reputation, operations, and intellectual property theft can impact your business’s ongoing viability.

Businesses of all sizes and sectors need increased cyber security diligence.  While larger enterprises have more data and often greater ransom demands, smaller business systems are usually easier to breach by hackers or bad actors.

To lower your risk of being hacked, everyone should take into account the following cyber hygiene guidelines:

• Have a risk management plan that examines particular requirements and vulnerabilities as well as facilitates incident response. Your plan should cover the ramifications of new technologies such artificial intelligence and their potential use in cyber protection.
• On a regular basis, follow release dates, patches, and upgrades on your operating system, networks, and devices.
• Make sure your passwords are strong and not easy to guess; mandate passwords should have at least 8 characters with least one capital letter, one number and one special symbol.
• Include multifactor authentication, for most sensitive access you should use biometrics.
• Consider using strong encryption on sensitive date, preferably quantum-resistant.
• Use Identity Access management and a Zero Trust approach; know what people and devices are in your business networks and what user privileges each person has.
• All employees should be educated and reeducated on an annual basis with quarterly reminders about how to use social media responsibly and stay alert to phishing attempts. Note: employees are the #1 risk for your business’s cyber security.
• Regularly back-up your sensitive business data. Think about keeping a copy of the information on a machine that is not in your business network.
• All the employees should stay clear of public networks, and if you must use one then use a VPN.
• If your business lacks the knowledge to manage the above cyber security measures, then consider using a Managed Security Service Provider (MSSP) or Managed Service provider (MSP) who can assess, upgrade, and safeguard your business’s cyber assets.

It is not just cyber hygiene that is important, but also having a strategy to stay secure and be resilient.

• Take a risk management approach. Be proactive: be alert, train staff, discover gaps in your business’s security, and mitigate vulnerabilities to reduce risks. Owners and responsible managers should be familiar with the guiding principles of the National Institute of Standards and Technology (NIST) framework: Identify, Protect, Detect, Respond, Recover.
• Now that generative artificial intelligence and machine learning tools are increasingly in use and sophistication by attackers and defenders alike, it is important to consider all components (people, technologies, procedures, and policies) of cyber security.
• The foundation of cyber security is communication. Business owners and management must coordinate their objectives, work together, and evaluate the businesses information security programs, controls, and network safety on a regular basis. Preparedness comes from the exchange of threat intelligence and innovative security advances, plus it is essential that all people using the systems receive security awareness training.
• Effective cyber security needs expertise. If your business does not have it internally, find reliable help outside. Owners and managers can always benefit from outside knowledge, opinions, and suggestions. Areas of special expertise should include policy, cyber security technology solutions and services, training, legal compliance, liability insurance, and governance.
• New cyber technologies such as artificial intelligence, 5G, cloud and edge computing, and quantum computing are impacting the landscape. It is important to understand and use them in defense of your business.

Cyber security is becoming more sophisticated, plan and act now to defend your business from cyber-attack.

Cyber Security

Cyberattacks have increased in frequency and maliciousness, including phishing, ransomware, and distributed denial of service attacks against networks. Growing cyber threats to business reputation, operations, and intellectual property theft can impact your business’s ongoing viability.

Businesses of all sizes and sectors need increased cyber security diligence.  While larger enterprises have more data and often greater ransom demands, smaller business systems are usually easier to breach by hackers or bad actors.

To lower your risk of being hacked, everyone should take into account the following cyber hygiene guidelines:

• Have a risk management plan that examines particular requirements and vulnerabilities as well as facilitates incident response. Your plan should cover the ramifications of new technologies such artificial intelligence and their potential use in cyber protection.
• On a regular basis, follow release dates, patches, and upgrades on your operating system, networks, and devices.
• Make sure your passwords are strong and not easy to guess; mandate passwords should have at least 8 characters with least one capital letter, one number and one special symbol.
• Include multifactor authentication, for most sensitive access you should use biometrics.
• Consider using strong encryption on sensitive date, preferably quantum-resistant.
• Use Identity Access management and a Zero Trust approach; know what people and devices are in your business networks and what user privileges each person has.
• All employees should be educated and reeducated on an annual basis with quarterly reminders about how to use social media responsibly and stay alert to phishing attempts. Note: employees are the #1 risk for your business’s cyber security.
• Regularly back-up your sensitive business data. Think about keeping a copy of the information on a machine that is not in your business network.
• All the employees should stay clear of public networks, and if you must use one then use a VPN.
• If your business lacks the knowledge to manage the above cyber security measures, then consider using a Managed Security Service Provider (MSSP) or Managed Service provider (MSP) who can assess, upgrade, and safeguard your business’s cyber assets.

It is not just cyber hygiene that is important, but also having a strategy to stay secure and be resilient.

• Take a risk management approach. Be proactive: be alert, train staff, discover gaps in your business’s security, and mitigate vulnerabilities to reduce risks. Owners and responsible managers should be familiar with the guiding principles of the National Institute of Standards and Technology (NIST) framework: Identify, Protect, Detect, Respond, Recover.
• Now that generative artificial intelligence and machine learning tools are increasingly in use and sophistication by attackers and defenders alike, it is important to consider all components (people, technologies, procedures, and policies) of cyber security.
• The foundation of cyber security is communication. Business owners and management must coordinate their objectives, work together, and evaluate the businesses information security programs, controls, and network safety on a regular basis. Preparedness comes from the exchange of threat intelligence and innovative security advances, plus it is essential that all people using the systems receive security awareness training.
• Effective cyber security needs expertise. If your business does not have it internally, find reliable help outside. Owners and managers can always benefit from outside knowledge, opinions, and suggestions. Areas of special expertise should include policy, cyber security technology solutions and services, training, legal compliance, liability insurance, and governance.
• New cyber technologies such as artificial intelligence, 5G, cloud and edge computing, and quantum computing are impacting the landscape. It is important to understand and use them in defense of your business.

Cyber security is becoming more sophisticated, plan and act now to defend your business from cyber-attack.

All images by Freepik

Adding the next generation to your business can be the best or worst thing to happen. 

After decades when parents were finding it difficult to entice children to take over family businesses, recent years have seen a change.  Today, more sons and daughters are asking to join and run their family enterprises.  

In recent years, many children have seen first-up close your challenges and hours dedicated to growing the business and have said, ‘No, thank you’! But with the job market fluctuating for various reasons, more of the next generation is thinking that going into the family business might be best for them. 

Pitfalls must be considered and dealt with regardless of the motivations that impelled the change.  

But is it right for the business?   

The blending of personal relationships and family history can impact future business operations. If not managed correctly, past family issues can result in misunderstandings and resentment among family members and other employees. Identifying and addressing these challenges early can help pave the way for a more seamless leadership transition.   

There are various pros and cons to bringing on the next generation. 

Pros: 

• Keeping the business in the family, preserving, protecting, and/or passing on wealth. 
• The next generation may have learned about the business over a couple of decades through overheard conversations and/or perhaps summer/holiday/part-time employment. 

Cons: 

• Employees may fear nepotism. 
• Family members not involved in the business may not be happy. 
• The next generation may expect favoritism.  

The goal should be to create a succession plan that works for the next generation and, hopefully, for future generations. Here are some factors to consider: 

Getting the help of an experienced business law attorney is essential for the longevity and stability of the family-owned business. Key elements include understanding the dynamics of family relationships, defining governance structures, and implementing strategies for a smooth leadership transition. 

Understand succession in a family-owned business often involves more than transferring ownership. It includes preparing the next generation for leadership roles (through mentorship programs, formal training, and individual development plans) and managing the next generation’s expectations.  

Family dynamics can complicate succession, so open communication is critical. Establishing clear expectations early and addressing potential conflicts can reduce friction. Documenting the succession plan allows all family members to understand their roles and promotes transparency. 

Governance structures guide decision-making and enhance accountability in your family business. Updated by-laws and/or operating agreements may help mitigate conflicts by establishing rules for governance and succession. Regular family business meetings can support better communication and can foster cooperation. Further, the company should implement a board of directors composed of family and non-family members to provide diverse perspectives. This structure can support strategic planning and enhance your business’s viability and resilience. 

Medical and emotional dynamics, as well as history and baggage, need to be navigated. Key focus areas include family relationships and the interplay between personal aspirations and business objectives. Similarly, medical issues and/or chemical dependencies should be addressed in succession plans. 

Family relationships and business roles can complicate succession planning. Relationships often influence decision-making and perceptions of fairness. Clarifying roles within the business and establishing communication protocols are essential. Regular family business meetings and a process for conflict resolution are important. Agreeing on a structured approach helps manage disagreements; consider involving neutral third parties to provide an unbiased perspective during conflicts. 

Harmonize personal and professional goals, if/when possible. Family members may have unique visions for their future, which can clash with the business’s direction. Understanding these individual goals facilitates better planning, encourages alignment, and helps set realistic goals that satisfy personal and professional requirements. 

Developing a shared vision for the business can unify perspectives. Documenting this vision provides a reference point for future decisions. This approach fosters commitment to the business while respecting individual desires. 

Generational differences can lead to misunderstandings and misaligned expectations. Communicate across generations and address challenges to create a smoother transition and strengthen familial relationships. 

Further, different generations often hold varying perspectives on leadership, risk, and business operations. The older generation may prioritize accountability, stability, and tradition, while the younger generation might focus on innovation and change. To bridge this gap, the business should encourage family members to engage in purposeful dialogues to understand each other’s values and goals. Structured meetings, surveys, or feedback forms can also help gather input from all generations, making everyone feel involved. 

Foster open communication to navigate succession planning effectively. Encourage all family members to express their thoughts and feelings; this can help identify concerns early. Establish a culture of honesty, which promotes trust and collaboration. Establish regular family meetings. Set ground rules for respectful communication that allow differing opinions to be expressed without conflict. Consider utilizing mediators or facilitators to aid in addressing sensitive topics. Technology, such as group chats or collaborative platforms, can facilitate ongoing conversations and ensure that communication remains fluid across generations. 

Develop future leaders:  

Building a pipeline of capable leaders (related individuals and other employees) within a family business is essential. Having outsiders inspires non-family member employees and family members to up their game. 

• Establish mentorship programs to facilitate skill development. Businesses ensure knowledge transfer and leadership training by pairing younger family members and high-potential non-employees with seasoned leaders. 
• Involve in business operations to allow potential successors hands-on experience. This engagement fosters familiarity with processes and cultivates a strong sense of responsibility. 
• Support formal education and external training to provide educational opportunities; this enables family members and high-potential non-family members to acquire specialized expertise. 

By proactively developing leaders, family businesses can reduce uncertainty and better prepare successors for future challenges. 

How to set up succession success: 

• Begin with early planning, communication, and preparation of the next generation, plus consider benchmarking against the best in the industry.  
• Develop a comprehensive succession plan, including identifying potential next-generation successors (employees and outsiders), creating role profiles, and establishing training and development programs.  
• The plan for learning the business should include goals and timeframes. 
• Establish metrics to measure success; these should align with other employees. 
• Set up mentoring with existing executives and/or getting the advice of an outside coach. 
• Provide regular feedback. 
• Focus on building trust, setting clear expectations, and engaging all relevant stakeholders.  

What to do when succession plans are not working: 

• It is crucial to re-evaluate the plan, consider alternative options like ESOPs or strategic buyers, and seek external guidance from professionals.  
• Explain why it is not working for the next generation and try corrective action. 
• Address any conflicts within the family, like those related to ownership, wealth, or business structures. Mediation or advisory services can also be helpful to get back on track.  
• If still not working, work out a split, including help finding their next position. 
• Inform other employees of the next generation exit. 

The business is part of your legacy.  Putting in the time, effort, and resources to do it right is essential.