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Are MSBs in Constant Transition?

Marcus Moir

Non-Executive Chairman

Archwood Group

· Growth,Leader Interviews

“Mid size businesses (MSBs) are too big to rely on the effort and energy of the founders, but not big enough to have huge teams of people putting in place very expensive systems and processes.”

They are inevitably in a transition status, always looking to grow and learning what they need to do to achieve growth.

New jobs and new challenges for MSBs

The new job of the management team in companies that reach MSB status is to stop managing the product and the customer, and start managing the infrastructure of the business.

They need to begin making the tough decisions about where to allocate resources, knowing that if the investment doesn’t work, it can take you backwards not forwards – and this is a big risk to MSB leaders.

How to break through to being more than an MSB

In order to break through from an MSB to an enterprise business, you must have either an excellent approach to sales and a large market to sell to or an excellent product with a huge demand that sells itself.

MSBs sometimes feel as if they are in constant transition; they are between an SME and an enterprise business – sacrificing the lifestyle aspects of the former to go through significant pain points, but not being so big that they have the comfort and the clout in the marketplace of the latter.

Sales challenges as you grow

SMEs can often sell the founder’s story and they have the challenger brand appeal. As they grow to mid size, there is a lot of SME in their DNA. They are still excellent at sales and product development, but the difficulty is that sales teams tend to be restless and harder to please – so retaining good talent in that department becomes more difficult.

They no longer can sell the founder’s story, they become embroiled in disputes over sales targets, and they start to demand more. Additionally, they can start to cause problems for the production or operations side of the business in order to reach their targets. MSBs need to learn how to manage this and still grow quickly.

“The new job of the management team in companies that reach MSB status is to stop managing the product and the customer, and start managing the infrastructure of the business.”

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