5 Things to Consider When Building Your Company’s Management Team

Mike Rand
Mike Rand
Mike Rand

When your business is young and new, it can be tempting to try to do everything yourself. But if you find success and your business begins to grow, you’ll need to take on extra help to manage it all, especially as you continue to bring on new employees.

Building a management team can be a challenge for any company. If possible, it may be in your best interest to promote from within. But don’t give away your management positions to your employees just because you like them — and always be careful about hiring friends and family members.

Your goal should be to find the best people possible for all your management positions. It may be a long process, but with the success of your business on the line, it’s a process that’s worthwhile.

Here are 5 things you should consider during the process of management team building:

1. Be Selective When Choosing People for Your Management Team

There’s probably nothing more important than finding the right team members to serve in positions of authority at your company. Not only will they set the tone for everyone working under them, but their ability to add value to your high-level decisions will steer the direction of your company’s future.

It can be difficult to choose amongst a wealth of qualified candidates. And saying “no” is always a challenge.

But it pays to be selective.

A poor choice on your leadership team could have long-term ramifications for your company. Poor morale leads to higher costs. A bad fit might mean you have to make the difficult decision to let someone go, then go through the process of finding their replacement.

But on the other side, a good choice can give you a significant advantage. Your management team will directly affect employee morale and productivity. Employees who have a positive work environment are more productive and dedicated by 21 percent compared to those who don’t.

You’ll certainly want to consider schooling, career history and experience. But there are other skills you should keep an eye out for, such as:

  • The ability to take criticism and accept feedback
  • A willingness to accept input from subordinates
  • A team-based management style
  • Steadfast honesty and integrity, especially when it’s inconvenient
  • The ability to stay calm and think clearly under pressure
  • Compassion and empathy for subordinates and colleagues
  • Clear and effective communication skills
  • A desire to teach and mentor
  • A desire to learn from both senior leadership and from subordinates

While technical skills may be necessary for your management team to perform, soft skills like communication and teamwork are essential for taking on a leadership role.

In your interviews, go deeper than your candidate’s resume by asking key questions about how they’d handle themselves in certain situations. This will help you gain a better understanding of your candidate’s personality traits, as well as their leadership styles.

2. Place Company Culture First

We tend to prioritize chemistry in our personal relationships, not our business relationships. But more and more, companies are realizing that company culture has a dramatic and tangible impact on their business success.

Company culture can be a difficult concept to grasp. Essentially, it is the personality of the company. It permeates through interactions with customers, as well as the environment in which your employees work.

A traditional or formal company culture has a standard management hierarchy, requires formal dress and sets a very business-like tone in the office. This type of culture is essential for some companies, but many of the newest companies, especially in the tech sector, have a more casual company culture.

They encourage team collaboration at every level, let employees dress casually and may not even have strict working hours for employees. Some new companies don’t even have clearly defined job responsibilities or titles.

Company culture is guided by a company’s leadership. Before placing anyone in a management role, interview them to determine whether they are a good fit culturally. They will have direct oversight of your employees and will make decisions that impact your culture.

3. Fill Essential Management Team Positions

Management team roles and responsibilities vary by company. Some startups and small businesses only have a single executive, while everyone else’s roles are relatively fluid. Other businesses are experimenting with flat hierarchies or, in some cases, no management team at all.

Regardless of the size of your company, every business needs to fill certain skill sets in order to operate and grow, including:

  • Administration
  • Product or service production and delivery
  • Finance
  • Procurement and technology
  • Sales and marketing

Most management teams fill these roles by appointing a single leader to oversee these various departments. If you’re a smaller company, you may not have many chief executives. But if you intend to grow your business and scale, you’ll want to fill all these roles on your management team in some capacity:

CEO (Chief Executive Officer)

As the highest-ranking member of the company, the CEO makes major decisions, directs the management team and oversees company resources. Individuals who fill this role may go by other titles, such as “president” or “managing director.”

COO (Chief Operations Officer)

The chief operations officer (also known as the chief operating officer) oversees the day-to-day operational functions of your business, typically reporting to the CEO. While the CEO may take on a leadership role and act as the face of the company, the COO works internally, implementing company strategies and spearheading new initiatives.

CFO (Chief Financial Officer)

The chief financial officer is the senior executive who manages your company’s finances. They are responsible for every financial action your company takes, such as investing in new infrastructure. The CFO has a duty to understand the company’s financial strengths and weaknesses, manage cash flow and propose corrective action when necessary.

CTO (Chief Technology Officer)

Not every company has a chief technology officer, but they are becoming more prevalent as advanced technology finds its way into every industry.

The CTO is responsible for your company’s technological needs (such as software, computers and machinery) as well as your company’s research and development efforts.

CMO (Chief Marketing Officer)

Companies that have no chief marketing officer may have a “marketing director” or “marketing manager.” However, companies are applying more creative titles to this role, such as “chief experience officer” and “chief relationship officer.”

The CMO is responsible for branding and deploying the company’s marketing plan in accordance with the company vision. They lead the company’s marketing staff in generating leads and report their results to the CEO.

Two business people, with rockets strapped to their backs, burst through the clouds and into the sky.

4. Hold Your Business Management Team to High Standards

Every organization wants people to take “ownership” of their work and take responsibility for their choices. But not everyone understands what true accountability looks like.

In a leadership role, accountability means accepting complete responsibility for results, even when they aren’t positive.

When assembling your leadership team, ensure your candidates understand they will be held to high standards and will be expected to take responsibility for not just their results, but their team’s as well.

The best way to motivate your team to do this is to lead by example. Accept your own faults and misjudgments but acknowledge your own victories as well. Stay open to suggestions and feedback from everyone at your company, no matter their position.

5. Grant Your Team Autonomy and Ask for Their Honest Opinions

Finally, remember that you hired your management team for a reason. You saw something strong and positive in them. If you want those things to shine out in their work, you need to give them the space they need to thrive.

Encourage your management team to undergo ongoing education and work to improve themselves. When you’re in a bind yourself, don’t hesitate to lean on them. You hired them because they are experts, and their expert opinions may be just what you need to make a difficult decision or solve a complex problem.

Mike Rand Contributing Writer at Fast Capital 360
Mike Rand is a contributing writer for Fast Capital 360. He is a freelance writer and content marketer. A published author, he writes about technology, marketing and law as well as small business management, business operations and startups.