Growth, regardless of the point in time, always means change. Founders have to internalize this knowledge when it comes to growing their own company successfully. But what does it mean in concrete terms when a startup becomes a successful medium-sized company? How does the corporate structure change, how does the organization switch? Which principles apply to the different team sizes? A guide for the path from startup to medium-sized company.
Clear definitions of SMEs in theory
The Federal Statistical Office defines small and medium-sized enterprises, the so-called SMEs, according to turnover and employment size.
The theory with regard to SMEs is thus clearly defined. It becomes significantly more difficult for the entrepreneur when these figures on paper become actual employees who need to be constantly guided and trained in line with the company’s objectives. Depending on the number of employees, founders must face new challenges.
It is not uncommon for a company to grow so quickly that some (important) growth phases are skipped due to a lack of time. Then founders have enough capacity to drive growth, but of what use is it if the company’s goals are no longer clear to anyone and the teams do not work together efficiently due to a lack of organizational structure? What can the founder do to master exactly these challenges?
The company is growing – what now?
After the startup phase, founders are usually faced with the challenge of finding talent and employing them. If this step has been successfully mastered, something happens that entrepreneurs only rarely thought about before: the daily organization of an efficiently working company. In addition to day-to-day business, this includes not only getting a suitable office and equipping employees with laptops. Rather, it is about the structure of the respective work steps, about the communication between the employees and, if necessary, even in the early phase of the company about the design of new hierarchical levels.
What in the end looks like a pretty mandala, illustrates the complexity of the communication channels between the individual employees of a company – with a team of 14 people only. This complexity has to be mastered with a carefully planned company organization.
#0 Employees – The Founder as Allrounder
The objective is set, the business account is set up, the business is registered and the company is running. The beginning of a company is without question exciting, demanding and sometimes lonely. The founder is usually the only employee and acts as an allrounder. Work takes place at any conceivable time of the day or night, the office switches from the living room table to the kitchen and maybe even to the balcony. Founders become heroes of multitasking: Marketing, customer contact, finance – all in one hand. But then there comes the point where founders hire more talent to help the company grow.
#10 Employees – Time to delegate
A big milestone for all companies: two digits. 10 employees are an exciting company size that is fun. All of them fit together (barely) at the one conference table. Everyone knows the company’s objectives because many have been with it from the start. Founders now act as CEOs.
The magic word is now: to delegate. By relinquishing tasks, CEOs have more time to take care of the company’s core business without losing track of things. It is not uncommon for the CEO to assign certain employees to mini-departments at this stage, such as personnel management, or to create corresponding positions. Another management position such as that of CFO can take care of the commercial area of the company. The hierarchy levels are usually still flat and in this relatively young phase of the company, the management level and the team often have a friendly relationship with each other.
#25 Employees – The Breaking Point
The previously loosely assigned mini-departments have now become permanent teams with leaders whose tasks are clearly defined and who report to management. This has resulted in new company hierarchies. Internally defined forms of communication such as Slack for corporate communication are indispensable. Otherwise, without such a tool, nobody will know what is actually going on in the company. While the CEO knew the majority of his or her employees personally well in the previous stage, this task is much more difficult to cope with when there are 25 employees. Thus, the regular, firmly planned one-on-ones are of enormous importance. This gives employees the opportunity to be heard personally and taken seriously and the CEO can give feedback at the same time.
A jour fixe at management / leader level as well as in the individual teams are an integral part of the week. Team building events such as joint dinners or a short trip not only strengthen the teams, they are a wonderful opportunity to repeatedly call up and consolidate the values and goals of the company.
#50 Employees – Welcome to medium-sized businesses!
According to the definition, the time has come: the former startup has become a medium-sized company with 50 employees. Sometimes the company has grown naturally up to this point, but by this point at the latest, a target-oriented organizational structure in the company has not only been theoretically thought out, but also implemented in practice.
Second-line management, consisting of talented people who fill the positions of CFO, CTO, CMO and Director HR, is an integral part of the company’s organization. These experts take care of the respective corporate division, while the CEO concentrates primarily on the company’s strategy and less on the company’s day-to-day business. There are additional departments, which in turn are divided into smaller teams.
Even if the company is now of a considerable size, the one-on-ones with the employees are not neglected. As a rule, they are no longer managed with the CEO himself, but with the corresponding leaders or managers. Internal company communication now plays an even bigger role, in every conceivable form: the aforementioned one-on-ones, meetings, setting up an intranet, workshops, setting up wikis, newsletters. Not to be forgotten, because they are also one of the forms of communication, are events outside of working hours like well-organized team events.
Even with 60 or 100 employees, the framework of this corporate structure remains. It is simply adapted to the respective size – this may happen through additional second-line management positions, departments or new teams. Even in the three-digit range, the employees remain what they were already in a team of 4 people: the support and the framework of the entire company.