Business

These Ingredients are Instrumental for the Growth of a Business

As the organisation grows, there is a need for the top management to develop departmental processes which can bring in predictability
These Ingredients are Instrumental for the Growth of a Business
Image credit: GaudiLab | Shutterstock
Author, Director - Family Business Practice - MBMC Consulting Private Limited
8 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Every growing business needs good people who will shoulder more and more responsibilities and grow with the business. I would say a simple need, but in reality, we hardly find such good employees.

The generally observed phenomenon is, as the business grows, the owners and the small team of employees get the first opportunity to shoulder the responsibilities because they are good in their work and they are the best resources that are available to the business. But as the business grows, this team gets overwhelmed by managing the daily routine. This is where we realise that people are unable to do justice to the position that they are occupying. Most of the times, they are engaged in performing work at a much lower level than they are expected to do in the position that they are occupying.

This is a frustrating time for the business owners, as they end up making decisions which they wanted to delegate to people occupying higher designation positions. There is a strong feeling of sudden incompetence in their team. There is a realisation that the employees who were capable and performers in their earlier jobs are unable to meet the bare minimum expectations of their new job position. They are unable to rise up to meet the requirement of the new position.  This raises an important question – what are the necessary ingredients for an effective performance? 

Years of research by late Dr Elliott Jaques reveals that there are four key ingredients required for effective performance; these are:

  1. Capability
  2. Skill
  3. Value for the work
  4. Reasonable behaviour

Capability:

Every job poses a new requirement on the incumbent in terms of decisions to be made and problems to be solved. “Higher the position in the hierarchy – higher the need for the person to display the ability to work without direction, without supervision and use their own discretion in making decisions and solving the problems.” This factor is often ignored during the process of elevating the person to higher position and designation.

What is generally considered for promotion is the person’s performance and their decision making in their current role. And years of work that they have done – which may not be the years of experience that they have. In many cases, they may be repeatedly doing the same things year on year.

The need is to ask – what capabilities (in terms of problem-solving and decision making) that the new position requires? And in the past or in their current position; has the designated person displayed that kind of capabilities? If the answer to these questions is “Yes” then the person deserves to be considered for promotion; if the answer is “maybe” then the person should be given an option to acquire necessary skills in a specific timeframe and support them by skill training. If the answer is clearly “No”; it is better not to consider the person for promotion.

Skill:

Skill has two components – technical knowledge and practice. Think for a moment, you want to run a marathon - you acquire the technical knowledge by studying the books, observing the experts by watching their videos and interviews, understanding the right diet and the training schedule, will this be enough to run a marathon? And you know the answer is No. Apart from all this knowledge, you need to practice running on a regular basis and build your stamina to cover more distance every day; then only you will be a skilled marathon runner.

This same principle holds true if you wish to meet the role expectations, you need to not only have knowledge but also develop the practice to implement the acquired knowledge – both are important to develop a skill. In general, a person requires minimum 10000 hours of practice to master a skill.

Value for the work

Another important question is – does the person value the work they are doing?

To simplify the point let me give you the example of a salesman – if a person is a successful frontline salesman, then it is most likely that he values the work that he is doing, meaning he likes meeting new people, travelling, talking to customers, understanding their need, explaining them the product or service, negotiating the deal and winning the order. What happens if he is consistently doing well? He gets a good rise, hefty incentive and looking at his excellent performance the company decides to promote him to the position of Sale Manager.

There starts the problem, as the new managerial position demands a very different level of work. He is expected to plan his team's work schedule and get the sales strategies executed through them. This is totally different from the person’s earlier job demand, and there are very high chances that he may not value this work as it hardly involves activities that he likes doing, on the contrary, he has to sit at his office desk, do paperwork and not get involved in the actual sales process. He is expected to derive the pleasure of winning the sales through his team’s work. If this is the case, the person may not value his work and hence will be ineffective in the new job.

If a person places a low value on the work he is doing, he is likely to have low interest or passion for the work, which in turn gets reflected in poor performance, even after possessing the required capabilities. It is only when the person places a high value on the work; they will have interest and passion for the work.  

Reasonable Behaviour

What is reasonable behaviour? Well, it has two components:

Habits

There are habits which contribute to the success and there are habits which inhibit success. To quote an example: if timeliness is important for the role, then being early is a good habit, while being late can be a negative habit Or if the job demands online documentation, then pending paperwork is a negative habit. Habits have a profound impact on effectiveness. It matters a lot when you are operating from higher level roles, as it impacts your subordinates behaviour too.

Absence of an Extreme Negative Temperament

This is the baggage that people carry that comes in their way of being effective. These are extreme negative temperaments like being arrogant or self-absorbed. Being a perfectionist or a micro-manager. Being defensive or abrasive or Rude. Any or all of these can inhibit effective performance.

For getting effective performance, it is important that these four ingredients are aligned with the demands of the role. As you see, every role demands certain expectations from the incumbent; who is expected to handle in his personal capacity to take decisions and resolve problems. But the big question remains, how do we do this matchmaking?

The first step is to identify for each individual role, what problems that the role is expected to resolve and what decisions that the role is expected to take. These will, in turn, become the tasks and the key result areas for the role. This needs to be checked during the hiring or promotion process through asking questions that will help us know that in their current job assignments or earlier job assignments has the incumbent displayed the abilities of problems solving or decision making. We have to test people by giving them exposure in situations which requires higher level decision making and problem-solving, from which we may evaluate their capabilities to handle the situations and develop them for taking up higher-level responsibilities.

Employee development is only half the problem solved. The other problem lies with the owners. The same principle of effectiveness applies to the owners. As owner-managers, there is the tendency to continue doing what we know best, we are contented to solve the day to day operational problems and get actively involved in that level decision making. In this way, we are happy to solve people’s problem rather than encouraging and developing them to solve their problems. It is not that we do not delegate, we do delegate, but most of the time, we find that the employees are incapable of taking decisions; because we have neither spent time on define the demands of the role in terms of the problem solving and decision making nor have assessed the capabilities of the person to perform effectively to handle the new demands of the role.

As the organisation grows, there is a need for the top management to develop departmental processes which can bring in predictability. Another emergent need is to integrate the inter-departmental processes, that will help the departments get aligned to achieve the common organisational goal, and lastly to think about the future direction for the organisation keeping in mind the current and emergent market trends and technological developments. All these tasks need conceptual thinking and building on it. This is where long-term success lies; if we fail to work on it, we will still grow, but the growth will be restricted to our individual capacity to handle and manage the stress of the growth.

More from Entrepreneur

Grow Your Business at Entrepreneur LIVE! Join us on Nov. 16 in Brooklyn, NY, to learn from legends like Danica Patrick and Maria Sharapova, pitch our editors, meet with investors, and potentially walk away with funding!
Register here

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.