John Linton Small companies, of which Exetel may be on the brink of becoming one, have many difficult problems to deal with from the first day of their creation and few survive very long before one of those problems forces the company to cease operating and either sell up to a competitor ar simply go out of business. That almost always happens to 99% or so of all start up companies in their first five years unless they have an enormous amount of good fortune or they have such a good idea it is an inevitability that they should succeed (Microsoft, Google, Apple, Cisco etc in the modern era are a few of the more obvious examples of ideas whose 'time had come').
Exetel never had an overwhelmingly good idea to base its business on and certainly not anything even vaguely unique so it has had to rely on its share of good luck and some semblances of sound management and tough mindedness to overcome the business life ending threats it has been confronted with over the years. That's allowed us, at least so far, to survive and grow for almost five and a half years and, hopefully will allow us to continue to grow over the coming new financial year and then - all things being dealt with beyond that.
One thing that is concomitant to time passing is that, as they get older, some individuals gain more knowledge and more competencies while some simply conform to that old saying that they don't have ten years of experience they just have one year's experience repeated for ten successive years. There is no real way for any particular individual to determine which category they fall into (if either) and little way for a colleague or employer to assess - let alone the individual themselves. Obviously some people just get older, and if they start a company up when they are as old as I was when I was a part of starting Exetel then time passing wreaks much greater and more obvious 'havoc' on your mind and body than if you are in your 20s, 30s or even 40s.
Which leads to the greatest challenge for a business that manages to grow from tiny to small. What do you do about "succession planning" or, in less grandiose terms, how do you put in place the people who will effectively manage both the current processes and develop the new processes that need to be put in pace continually to ensure that the company continues to 'stay alive' and, if that is the overall company plan, to continue to grow when its founders want to do other things?
Tiny companies, by definition, can have no 'succession plan' as they are almost always started up by one or more talented individuals who do an enormous amount of work themselves and their early recruitment (unless they are very forward looking) is based on adding 'operatives' to allow the founders to pass over the less 'intellectual' or knowledge based work involved in developing the business or people with alents different to those required in the 'core' business - there is seldom the ability of hiring people who are good at the 'lower level' work involved in being part of developing a start up business as well as having the potential for seamlessly moving to progressively more complex assignments including the most complex of all business capabilities - hiring, managing and developing other people.
Exetel has dealt with this issue, so far, by being insightful, and lucky, in its hiring and recently splitting the company in to two separate operations of roughly equal sizes (in terms of numbers of personnel) to make the structural diversity narrower in each of the two 'halves'. By paying for an MBA course for one person (to give external views of various aspects of management theory) and by carefully 'orchestrating' the year by year activities of some other people we have managed to provide the company with reasonably competent 'management' capabilities. So far so good - or pretty much so.
With, possibly, more rapid growth over the coming five years (assuming Exetel continues to survive) we will need a different type of person to manage both various aspects of the company and the company as a whole in Australia. Doing this, if in fact it can be done at all, is going to be extremely difficult for all of the conventional reasons and, in Exetel's case, for a couple of unconventional reasons - those being why we are in business in the first place - and the fact that we aren't too far away from our tiny start up date and therefore have, in general Australian business terms, a personnel base of very, very young and very, very inexperienced people.
I don't know what we will eventually do in terms of managing our business by the end of 2010, assuming we survive, but it is pretty certain that we will need to be managing a $A80 million or so business with a group of people largely under 30 all of whom have never had a 'serious' job outside the very different operating environment of Exetel.
It makes the hiring process very interesting when one of the major characteristics you look for is "can you see this incredibly young and inexperienced person as the CEO of the company in a few years time"?