Each week, we seek out expert advice to help a small or medium-sized company overcome a key issue.
Success really does taste sweet for Josée Vigneault and Jean-René Lemire, the husband-and-wife co-founders of Vigneault Chocolatier Ltée., a Quebec City-based producer of fair trade, certified organic chocolates sold under the Theobroma Chocolat brand.
Since its start in January, 2006, Vigneault – whose products are sold through more than 2,000 retailers in Canada and the United States – has been enjoying steady growth, with revenue increasing by more than 35 per cent annually for the past four years, Mr. Lemire says.
In the company’s earlier years, the couple provided the sole leadership. Then about two years ago, it poured about $1.5-million into upgrading and automating the factory, increasing production capacity by 500 per cent, Mr. Lemire says.
“If you increase volume, you increase revenue, you need to increase everything, you need to increase your management, too,” Mr. Lemire adds. “We didn’t put enough attention on a great management team; without one, you are not able to integrate all the facets of the business.”
It became clear to the co-founders that they needed help managing the business and its staff of 15. Over the last 18 months, Vigneault has created and filled four management positions.
But building a management structure has not been easy, Mr. Lemire says. Two managers did not perform as expected and another quit, he says.
“We thought putting management in place would bring us results, but the results that were delivered did not meet our expectations,” he says.
A big challenge has been choosing the right people. Mr. Lemire says Vigneault puts job applicants through three rounds of screening, but finding out if a manager is really right for the job can take at least three months, he says. In a fast-growing enterprise, that’s way too long, he believes.
Mr. Lemire says he knows it is hard for managers to function in roles that keep changing as the company grows. “The business model is continuously evolving, and the parameters of the job are always moving,” he says.
The Challenge: How can the company build the right management structure for a growing company?
THE EXPERTS WEIGH IN
Cori Maedel, human resources consultant and founder of Vancouver-based Jouta Performance Group Inc.
Did the company do exit interviews with the people who didn’t work out to understand their concerns? My guess is lack of structure and clarity of direction is one of the key reasons Vigneault Chocolatier is having problems building a management structure. They probably don’t have any solid on-boarding materials, so when someone comes in, they’re put in a rowboat and sent out to the middle of the ocean and told to make things happen.
Mr. Lemire needs to look ahead to what kind of HR structure he’s going to need – what’s it going to look like in five years, and then in 10 years when he has 500 people? Having this forward-looking plan will help him hire the right people because he’ll be able to assess candidates not only for the position available now but also for their potential to take on other roles in the future.
At this stage, the company probably can’t afford to hire a senior HR professional who can develop and execute a formal HR strategy. Instead, they should look into bringing in an HR consultant who can look at what’s happening both from a ground floor and from a strategic perspective.
Peter Lepinski, business coach with ActionCOACH in Grande Prairie, Alta.
A lot of turnovers gets very expensive. Vigneault Chocolatier needs to really examine their hiring and interviewing process, because something is wrong if they’re missing clues about the kind of people they’re hiring. They need to do a personality profiling as part of the hiring process. They also need to be focusing more on behavioural-based assessments.
When you hire professional managers, you need to clearly define what you want, clearly define the results you’re looking for, and then let them do their thing within the parameters of the culture you’ve laid out. What is this company’s culture? What values does it go by? They need to make sure these values are being clearly articulated to their new managers.
This company needs an HR strategy, and it may need to bring someone in with expertise in that area. Communication also seems to be an issue here, so maybe the owners need to bring in someone who can help them improve their communication and leadership skills.
Hatem Jahshan, chief executive officer of husband-and wife-owned Steeped Tea, based in Ancaster, Ont.
Husband-and-wife teams do not spell out their boundaries in the workplace very effectively and tend to communicate with each other in a subliminal way. Create clear and concise roles for husband and wife and make the roles clear to employees. Managers report to one and only one figure in the chain. Draw your organizational chart and stick to it.
Hire flexible employees that can grow with your company. Executives coming from big companies might not be the right choice if they are used to a steady standard of growth with minimal fluctuations. This might be a good time to give the underdog a chance. It definitely means more training but you could end up with a very loyal, aggressive employee that embraces change.
You can tell what kind of a manager or employee you’ve hired immediately from training, how they’re picking things up, how comfortable they are. Spend a couple of hours every day with them for about three weeks, exposing them to everything they’re likely to encounter in their new position. Document this training – have the manager write down everyday that they learned that day, and then the two of you can identify what’s missing, where the knowledge gaps are.
THREE THINGS THE COMPANY SHOULD DO NOW
Create a formal HR strategy
Create a short- and long-term human resources strategy. The company should bring in an HR management consultant to help develop this strategy.
Get executive coaching
The couple might benefit from improving their communication and management skills with employees.
Do exit interviews
Find out what is causing managers to leave.
Special to The Globe and Mail
Facing a challenge? If your company could use expert help, please contact us at firstname.lastname@example.org
Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT
Our free weekly small-business newsletter is now available. Every Friday a team of editors selects the top picks from our blog posts, features, multimedia and columnists, and delivers them to your inbox. If you have registered for The Globe's website, you cansign up here. Click on the Small Business Briefing checkbox and hit 'save changes.' If you need to register for the site,click here.
Follow us on Twitter: