Companies that have survived the start-up period and that are now growing profitability have obviously been doing many things right to get to this stage. At a certain period of growth every business will reach a critical juncture that will determine if they can breakthrough to another level (if they so choose) and continue their successful growth. This breakthrough point should be approached with extreme caution by the company CEO for at this stage a company can stagnate or worse, can completely unravel and fail.
The key to the organization’s continued success at this point is the quality and competency of the managers at every level. One critical mistake made by many company CEO’s is to place into management people who have demonstrated they are excellent employees but may not have a clue as to how to manage people. Some of the best employees make lousy managers and if placed in management positions can completely destroy a company. I am a fan of promoting from within but only if those people are qualified to lead others. Do not experiment with management positions! Place qualified people in the management areas of your company from the start even if you have to go outside of the business to do so.
One simple way to assist a business owner in selecting the right managers is by testing them using formal testing procedures designed specifically for the purpose of determining management skill and aptitude. There are very good organizations that can assist in this testing process. I would urge every business owner to utilize this tool along with all of the other factors that the CEO deems appropriate. I would also encourage every CEO to read John Maxwell’s book, The 360 Degree Leader and have every manager read it as well.