Grow Your Company... Yet Keep the Magic

“Until recently, we had just a handful of employees,” says the owner of a trendy fashions store. “My manager and I would meet after work over a beer and talk about how things were going. I spent most of my time with customers, schmoozing and making deals. Employees were like family.

Then we started growing. We went from 10 to 20 employees and hired two assistant managers. The bigger we grew, the more hours I worked. My old seat-of-the-pants management style meant that everything had to pass through me. I had less time for schmoozing with the customers and employees; morale dropped and turnover increased. 

I was running so fast I couldn’t keep on top of the numbers, and profitability began to slip. My accountant said we needed to institute corporate-style controls and that I needed to stay off the floor and keep my eye on the books. 

It seemed like the magic was slipping away; I wasn’t enjoying going to work anymore. And I dreaded the term “corporate style.” I got into this business to avoid that. 

Wasn’t there any way I could grow my business yet keep the magic – for my customers, my employees, and for myself?”

I hear this story all the time: A company starts out “mom and pop;” the owner runs it like a family (sometimes a dysfunctional family!) As the company grows, this mom & pop culture gets in the way, and can totally stop the growth.

At the other end of the spectrum is the dreaded corporate culture, run by soulless bean counters. Small business owners and the people who work for them want to avoid this at all costs. By definition, a company with the corporate style has seemingly lost the magic.
How can a company grow from “family style” toward “corporate style” without losing the magic? Between family style and corporate style is another approach I call “team style.” 


• Family-style operation

• Team-style operation

• Corporate-style operation

I suggest you go for a team-style operation, which combines the best features of family style and corporate style. 

Team-style operation. The first rule is, “The team is not a family.” The owner is the coach, not mom or dad. Each person there must fulfill his or her role, or leave the team. The team works well, yet keeps the desired qualities of the family. They are a close-knit group- people collaborate and cooperate to work for a common goal.

The team is also not corporate. It works well without relying solely on the impersonal, numbers-driven standards of a large corporation. Large corporations often have nonsensical, inexplicable, even perverse standards. Managers are often remote and bureaucratic. Some workers are driven and soon burn out; others complain and do no more than they must. Morale is so-so and turnover is high. Customer service suffers. 

In the team-centered company, in contrast, standards and goals make sense. People in the company agree that this is the way the operation should be run. They see that achieving the outlined goals benefits everybody involved, from the owners down to the lowest-skilled people. People are there because they like working there. Morale remains high and turnover is low. 

Is it getting too corporate? As companies grow from family style to team style, some employees may become disaffected and leave. “It’s getting too corporate around here,” they say. What do they mean by this? They like the family style, which is unstructured and loosey-goosey, and don’t like being held to standards and performance goals. In the old style, people could come in a little late, it was easy to take time off or slack off sometimes, or let certain things fall through the cracks. They could get some freebies, and give freebies to their favorite customers. 

Family style can kill profit. It is precisely these things that raise the cost of operation so that a company can never be profitable enough to grow from family style to team style. Suppose these behaviors, taken together, cost the company an extra 5 to 10%. That’s the difference between just barely scraping along and generating profit and cash flow to spur growth. 

The owner must lead the way. The owner’s job is to lead the way from family style to team style while avoiding the pitfalls of the corporate style. This starts with selecting the best people at each level—people who are willing and capable to work in the team-style organization. Often, this means letting go of employees who are too attached to the easygoing loosey-goosey family-style of operation.

In addition, the owner must set the standards. In the case of the shop in this story, this includes:

• Atmosphere and ambience

• Pizzazz, quality, and merchandizing of the goods

• Customer service that is knowledgeable and friendly

• Managing inventory and keeping it fresh

To get people to step up to the next level—to operate at team-style, instead of family style—you may want to set an incentive program built around these key criteria:

1. Working together as a team

2. Achieving your targets

3. Caring for customers

For each of these criteria, measurable performances can be built into an incentive system.

Changing the culture. This transition from family style to team style is not easy. It requires challenging the old business culture and the comfortable ways things have always been done. The owner must lead the way, show how it can be done, hire people capable of managing and performing in the new way, hold people to the standards, and replace those who won’t make the transition.

But this isn’t enough. I recommend keeping in communication with all people about this shift, and getting their feedback on the difficulties of making it. In management team or employee meetings, ask these questions:

• “What’s the magic of working here? Why do our customers keep coming back? Why do our employees stay?”

• “What are the standards and goals we must attain to allow this company to be profitable, and to grow?”

• “How do growth needs get in the way of keeping the magic, and vice versa?”

• “How can we bridge the differences between the dual goals of keeping the magic and fostering growth? How can we keep the magic and achieve the standards?”

Get everybody’s input on this. Let them see the dilemmas and the solutions. This greatly increases their buy-in and their understanding of how to manage this shift. You will create an exciting place to work where your managers and employees will be eager to help institute the types of performance needed to achieve the company’s goals.

This is the team operation that grows and retains the magic.

How did this work out with our trendy fashion shop owner? 

“We’re up to 40 employees, profit margin is up, customers are happy, and I’m working fewer hours. Sorry to say, I had to replace my manager; he was just too wedded to the old ways. My new GM has run much larger operations, and is excellent at balancing customer service and profitable operation. He can handle things very well in my absence. And me? I’m off to Italy on another buying trip, and when I return, we’ll start to look for a location for our second shop. The magic is back!”

This is really the core message of my book How to Grow Your Business without Driving Yourself Crazy. I tell you how to make these shifts in the way you run your business so that you can grow to the size you want, get more profitable, and not have to work so dang hard! 

Call or email me with your growth challenge; I’ll be glad to help you tackle it. 

Mike Van Horn

To sign up for our free e-zine, click here