How to structure your business

Withers articulated that a critical objective in structuring his business was to recruit highly skilled individuals who not only excel in their technical roles but also possess the potential for leadership development.

“The first and most important objective was to hire people with the capacity to execute in their technical function but also grow to lead others,” he said.

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“We were a software business, so we needed great technical leaders as well as people leaders. We recognised this distinction and tried to align our remuneration system to reward both.”

Another core objective highlighted by Withers was to ensure that individuals’ personal values align with the organisation’s core values as established by the founder. This alignment is crucial for fostering a cohesive organisational culture, driving employee engagement, and maintaining a consistent vision.

“Another core objective is the alignment of these people to our organisation. Do their personal values align [with] the organisation values as seeded by the founders?” he said.

Strategies for ensuring business continuity in the founder’s absence

To ensure seamless operations during periods of founder absence, Withers implemented several key strategies in his SME that other owners could consider implementing within their own organisations.

A key strategy he implemented is establishing a culture that prioritises psychological safety and accountability. This approach is designed to nurture the development of emerging leaders within the organisation by creating an environment where employees feel secure sharing ideas and taking ownership of their roles.

“To develop other leaders, the business owners need to set this as a perpetual strategy of the business. This strategy will require the building of a business that has high levels of psychological safety and high levels of accountability,” he said.

Withers suggested that to build psychological trust in a business, it is wise to foster a culture of intrinsic motivation, where leaders create an environment that makes employees feel genuinely valued rather than working out of fear of financial necessity.

“To build the psychological trust in a business, it is wise to develop an intrinsic motivation culture. Leaders create an environment where the employees [who] want to be there are not working in fear or as financial hostages,” he said.

Withers noted that while accountability can be fostered through intrinsic motivation among employees, it is also crucial to clearly define and assign specific accountabilities within roles to ensure effective management.

“Accountability is partly dealt with by having intrinsically motivated employees. However, this is not enough. Clarity of accountabilities distributed in roles that are then assigned to people is key,” he said.

“Role clarity and the potential for role handover is the key for succession.”

The importance of cultivating a strong company culture

Fostering a strong company culture is crucial for long-term resilience and success in SMEs, with Withers stating: “I believe this is a very large topic and one the SME owners should immerse themselves in.”

Withers observed that numerous discussions about organisation culture have often led to cynicism because they primarily target large corporations, overlooking the unique dynamics of SMEs.

“There have been many words and discussions about organisation cultures. Much has led to cynical outcomes because it has been targeted at large corporations, not SMEs,” he said.

However, unlike large corporations, Withers outlined how SMEs have a unique advantage in cultivating a strong company culture: “The superpower of an SME is that the vision custodians (the fundamental reason for being and where the organisation is heading) work in the business.”

To cultivate a resilient organisational culture, Withers emphasised, SME owners should first ensure that the business’s values align with their own, given their long-term presence and influence within the organisation.

“This first step for an SME owner is to realise that people will come and go in your business, but you are there for the very long term. You do not want to own a business that has values different to your own. This is often one of the reasons you founded or chose to become an owner of the business in the first place,” he said.

Withers also recommended a series of reflective questions for SME owners to consider, aimed at shaping and nurturing their desired organisational culture.

“The following questions help explore culture as an SME owner:

• “How do we (the owners) build a culture that sustains beyond our tenure?
• “How do we build high levels of trust to support succession of roles?
• “How do we differentiate our offering in the marketplace via our culture?
• “How do we genuinely build an intrinsic motivation culture?
• “What do we do to optimise entry, engagement and exit for each team member’s journey?”

Building resilience and reducing dependency on the founder is crucial for long-term success and owners’ wellbeing in SME professional services.

Withers highlights that the first critical step for SME owners is to acknowledge their role in managing multiple distinct functions, as recognising this separation is essential for developing a resilient and self-sustaining business.

“As an owner of an SME professional services, the first task is to acknowledge that you are one person executing distinctly different roles. A role is defined as a set of logically grouped accountabilities that will require certain skills (training and experience), and the person executing this will have certain attributes (patient, methodical, detailed),” he said.

“As the SME owner, you will most likely have the following roles: owner (vision and capital), organisation leader (strategy formulation and implementation), team leader (lead getting work done), technician (lawyer).”

Withers outlined that clearly understanding the distinct responsibilities of the owners enables SME founders to delegate tasks and responsibilities more effectively within their business.

“If the SME owner is called Bill, we can’t do the succession of Bill. However, if we can get clarity [on] Bill’s roles, we can begin the journey of role handover. This pattern is persistent across all SMEs,” he said.

By clearly understanding the distinct responsibilities of the owner, Withers stressed, SME owners can effectively delegate tasks and responsibilities, thereby enhancing operational efficiency and fostering a more resilient business structure.

“Once the SME owner can invest in the thinking of being an owner – independent of all other roles – they can invest in their owners’ vision construction. This process is just as important for one owner as it is for multiple,” he said.

“The vision in question is an owner’s vision, which gets to the core of what they want the business to deliver for them. Will they build a long-term SME or do they want to sell? This question is one of many that supports the construction of the owners’ vision.”