For SMEs, it often happens that a structural change occurs due to growth before the brand identity changes.
A more typical initial indicator of growth is not an expansion of office space or a large increase in clients, but rather the transition of strong individuals who previously contributed individually to becoming managers. A high-performing salesperson moves from individual sales to leading a team of salespeople. An operations specialist who was responsible for delivering products is now managing other delivery specialists. The founder begins by delegating decision-making responsibility for divisions that were previously run from the founder’s office.
Promoting employees solved one problem and created another
There are good reasons why SMEs typically promote their employees from within their own company. Candidates who come from within the company are familiar with the products, know the company culture and have earned the respect and trust of their colleagues. Therefore, promotion from within is generally efficient; However, the risk is not small.
A manager must be able to set priorities, make decisions based on incomplete data, conduct performance reviews, and establish clear direction between departments. Technical expertise does not guarantee that a manager will be successful in these areas. A highly competent employee can do their job very effectively, but cannot coordinate the work of others.
At this stage of the company, a structured leadership development program provides newly promoted managers with a framework for managing the responsibilities associated with their new role. Tasks such as delegation, communication, giving feedback, allocating time appropriately and making informed decisions are not consistently taught in the workplace.
Without a support system in place, many new managers fall into a familiar pattern of behavior. First-time managers tend to continue to perform specialized tasks alone, invest too much time directly in day-to-day operations, and avoid difficult conversations. As a result, the team continues to rely heavily on the first-time manager, limiting the potential for scaling.
Accident management
When newly promoted managers rise through the corporate ranks without proper support systems in place, “accidental” management often occurs in companies. No one intentionally sets out to cope this way. However, the leadership style becomes more reactionary than intentional. The work is assigned, but the expectations are unclear. Meetings take place, but nothing comes of these meetings. Problems are identified late because team members are unsure when to alert others to concerns.
In addition to inefficiency across the organization, different types of friction arise in different areas:
- Delegation becomes weaker: Newly promoted managers often feel confident that they can continue to handle important tasks themselves. While this approach protects the quality of the task in the short term, it weakens the ability to develop future teams. If all decisions are still made by one person, scaling the output is not possible.
- Feedback becomes unreliable: Many newly appointed managers either don’t want to talk to colleagues about underperformance for the sake of maintaining the relationship and/or overcorrect them by becoming too controlling. Both patterns destroy trust in the manager.
- Priorities become unclear: Founders often believe that newly appointed managers will automatically be able to translate company goals into actionable team initiatives.
Unfortunately, translating business goals into concrete team actions requires management skills. Without these skills, teams remain busy while little or no progress is made in executing the company’s strategy.
Although these problems may appear undramatic on the surface (e.g., sales continue to grow for a while), the damage caused by the lack of adequate development of new managers can manifest itself in slow execution times, team members repeating past mistakes, team member dissatisfaction, and increased workload for the founder.
Why founder-led companies experience these problems more
Founder-led companies are most affected by this problem because of how they operate in earlier stages of growth. The early growth phase is characterized by the founder acting as both strategist/decision maker/recruiter/culture carrier/final escalation point. As team size increases and complexity increases, companies need a level of management capable of assuming decision-making responsibility. When newly promoted managers are unable to act independently, decisions simply fall to the founder. The founder is then forced to focus on day-to-day operations rather than focusing on expanding/growing their business through new partnerships, financial planning or positioning their business in the competitive market.
As a result, founder-led organizations often appear larger than they are on the inside. To the outside world, the organization appears larger due to the increased number of employees, but its operational maturity level does not match. Instead of true scalability; As the organization grows, additional activities accumulate.
Supporting newly appointed managers is not just soft leadership, but part of operational design
Therefore, supporting newly appointed managers is not just another example of soft leadership; it is part of the operational design. If an organization’s management level is weak or unprepared to handle increasing responsibilities, the organization will never achieve true scalability. Instead, additional activity will simply accumulate.
