Chaos is beautiful. Chaos is deadly. Every small business will experience chaos as it grows, and if left unmanaged, it can plateau your growth—or destroy it all. Small businesses are the heart of any economy, but many are built on linear thinking and fragmented strategies. At their core, these businesses simply don’t have the mature structure and strategies in place to manage the chaos so they can scale and grow effectively.

How can they succeed in spite of these challenges? Let’s start by examining those two elements that threaten to kill their culture: linear thinking and fragmented strategies.

Linear thinking can be thought of as solving for one problem at a time in a binary, siloed way. It can often result in wasted effort and misalignment. At the same time, it should not be ignored as an important quality for a small business to have. A culture of getting work done and serving the customer at all costs is an excellent strategy for getting a small business up and running. But linear thinking can only take your company so far before the chaos creeps in. Businesses often throw more resources at the chaos as they grow, but chaos grows at a faster rate than the business does. As a result, the business plateaus and becomes unable to tackle the chaos effectively. This when leadership must stop and admit that they do not have the right strategies in place to succeed and mature.

The big challenge small businesses face when they begin setting a strategy is lack of a proper structure or process to follow to develop that strategy. The result? Fragmented strategies. Fragmented strategies leave employees poorly equipped at the wheel, forced to drive your business through a storm without working windshield wipers, with no map and no final destination determined.

The result? Chaos, plus the anxiety, worry, and fear that come along with it—the key ingredients for a disastrous work environment.

Employees are desperate for leadership, direction, and fulfillment. But too often, leadership ranks are filled by top performers, and not by those with strong leadership skills who can meet the needs of the business. And traditional business tactics for employee engagement and retention no longer work. Meanwhile, the digital age has added additional layers of communication, which leads to more mistakes. (Technology is attempting to address that gap—take enterprise communication applications like Slack, for example—but it’s still catching up.)

As a result, getting the most out of this new digital age requires another crucial element: strong governance.

The Importance of Good Governance

Governance is the structure that puts your company in a position to scale and improve the culture from its core. By building a solid governance framework, not only will you have a company-wide game plan for success, but you’ll create an ideal environment to manage the chaos. Strong governance can help mold beauty out of chaos, by creating a responsive environment in which chaos is dealt with before it happens.

If any part of your business is blurry, or you don’t understand how it works, you likely have a serious governance issue. But when good governance is put in place and employees have clear expectations and well-defined roles, their productivity, fulfillment, and engagement will grow, and they will start to see how their roles contribute directly to the company’s growth. A good governance framework ensures your employees are able to keep their freedom, within the guidelines you provide them.

Think of it like this. America is known for its freedom, but we all know that true freedom means living in a world with absolutely no rules or laws. If that were the case, America would be the last place anyone would want to live. Similarly, if your employees are working in chaos, they are making poor decisions and adding waste to your business. Putting in place the right laws and limits helps provides clarity on what success should look like for your company.

3 Steps to Begin Developing Good Governance

  1. Identify your teams.

Surprisingly, many companies never document or identify their teams properly. Doing so is a big step in tackling internal chaos.

You should start by identifying your core team—the people who contribute directly to your business every day.

Next, identify your distributed teams. These are the people who don’t work day-to-day but still have a direct impact on your company. Examples include agencies, advisors, managed IT services, and boards of directors.

Last, identify your extended teams. These are the players who contribute to your business, but with little to no say from you in how they accomplish their work. Most often, this includes contractors and other businesses to which you outsource work.

By documenting your teams fully, you’ll have a list of relationships and roles that need their responsibilities defined. Once this is done, your teams now have a roadmap to grow and develop your business. Responsibilities, ownership, and decision-making processes are clearly set. Plans can be developed and executed quickly. And communication waste can be reduced, because team members know who should be contributing, both internally and externally.

2. Develop your company strategy.

Every business owner has a strategy for their business—but many don’t have it written down. With rapid growth in the digital age, business and technology are transforming every year. Facebook was once a fun and exciting social media platform, but now requires a robust strategy to maximize the cost-effectiveness and utilization of the platform. Without a company-wide strategy in place to support new business development, waste and chaos will creep in. Business is complex, and setting a business-wide strategy requires your leadership team to contribute. Schedule brainstorming sessions to hone your strategy over time. Your goal should be simple. What strategy are you so confident in that you would paint it on every wall of your business? This may be harder than it sounds. Don’t be afraid to refine your strategy yearly.

3. Create an Idea validation process.

Larger organizations have what is commonly referred to as an ad-hoc or validation process. This is a formal process in which ideas from employees are formally submitted and considered by a leadership team. Too often, chaos comes simply from ideas. Employees often believe they are doing the right thing for the business when they take a good idea and implement it, but with their limited knowledge and experience, the ripple effect of that idea or decision may not be best for the organization. Even leaders in the business need to properly evaluate their own ideas, in order to develop them toward positive outcomes.

It’s never too early to implement a system for ideas to be developed properly. By creating a formal system for employees to submit their business development ideas, not only can good ideas become great ones, but employees will feel more empowered and fulfilled. Be sure you don’t confuse this with a simple idea or feedback box. A good process will include a form with a list of challenging questions to guide your employees and weed out ideas that don’t align with your company’s strategy.

With this process in place, chaos and waste will be reduced, with less time spent developing immature ideas, and more time spent on mature strategies that will take your company from merely surviving in chaos to growing in a responsive and agile environment.

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