Being Appropriately Corporate

Earlier, “appropriately corporate” was introduced as a way of operating rather than a destination. The practical challenge for founders is recognising when the way a business operates is no longer appropriate for what that business has become. That point is rarely obvious at the time.

Most businesses continue to function, often quite successfully, while misalignment develops in its operating model. Revenue may be growing, clients won and retained, and activity high.

Yet internally, pressure begins to build. Decisions take longer, delivery becomes inconsistent, performance reporting is not fit for purpose, and risk is not always visible or addressed. The brand can also drift away from what the business actually does. The founder often remains central to too many activities.

This is where appropriateness becomes visible.

When the operating model stops keeping pace

In the early stages of a business, informality is a strength. Decisions are made quickly, client relationships are close and personal, and the founder has a clear view of what is happening across the business. That environment allows the business to establish itself.

As the business grows, and also as it matures over time, those same characteristics begin to change in value. Informality can lead to inconsistency, speed without sufficient rigour can introduce errors, and a reliance on the founder limits scale.

The issue is not that the original approach was wrong. It is that the business has changed, and the way it operates has not.

In HHMC’s experience, this misalignment can lead to significant disruption. Key staff may depart, important client relationships may come under pressure, or operational breakdowns may occur. The industry has many examples of businesses that stall at a certain size, not through conscious choice, but because the operating model has not evolved.

The founder transition

Founders are typically capable individuals who possess the behaviours that create early success. They can win work, deliver outcomes and maintain relationships. Over time, however, that is no longer sufficient on its own. 

This is evident in growing businesses, but it is just as relevant in businesses that are maturing. The role of the founder changes.

The early days are about getting results from doing, controlling and reacting. That is not viable over time, and more structure and formality is required that enables others to execute activity and to anticipate challenges and opportunities.

Size, and the complexity that comes with it, is the primary driver of this change. As the business becomes broader and decisions carry greater consequence, the founder’s role shifts from directing activity to enabling others to execute it. This often involves building and guiding a leadership team capable of running the core functions of the business.

There is a further transition that can occur as the business continues to develop. Once a capable leadership team is in place, the founder often needs to step back from day-to-day involvement. This is not about leaving the business, but about setting the framework for execution and then focusing on what comes next, such as future risks, expansion opportunities, and longer-term direction.

I contend that there are certain size characteristics that are important. In HHMC’s experience, none is more important than when growing through the 20-person barrier, as that has the greatest impact on the founder. The development of a leadership team and the move from “span of control” to “execution of activity through others” is significant. It is, of course, just one change in the evolution of a growing and maturing business, but in HHMC’s experience is the most substantial.

This process of transition is not always comfortable for the founder, and it is not always successful.

Transitioning from a corporate environment

Many founders begin their business ownership journey after working in a larger recruitment organisation. That experience brings exposure to structure, process and scale, but it also shapes expectations about how a business should operate.

In a larger organisation, roles are clearly defined, support functions exist, reporting and compliance are embedded, and responsibility is distributed. In a smaller business, much of that structure is no longer present, and the founder is instantly responsible for a much broader range of activities.

The response is often one of two extremes. Some founders reject structure entirely, favouring speed and autonomy. Others attempt to recreate a corporate environment too early, introducing process and cost that the business does not yet require and may not be able to support.

Both approaches can work in the short term, but both can create misalignment over time. Being appropriately corporate is not about choosing one approach over the other. It is about selecting what is required, and when.

What appropriate looks like

Appropriate corporate behaviour is rarely defined by a single decision. It is reflected in how the business operates day to day.

It often includes elements such as forward planning that is relevant to the stage of the business, financial information that is understood and used rather than simply produced, client relationships that are shared across the organisation, and consistency in decision making, particularly in areas such as pricing and delivery.

These are not separate disciplines; they are evidence that the business is being run with intent rather than reacting to activity.

It is also evident in whether decisions are followed through, the extent to which the business relies on individuals, and whether there is a shared understanding of values, brand and direction across the team.

None of these ideas are necessarily complex in isolation. However, together they change how the business behaves and how it performs over time. They also apply to both growing businesses and those that are maturing, where the challenge is often maintaining consistency rather than creating it.

Getting the balance wrong

There are two common forms of misalignment.

The first is under-building, where the business grows but structure does not keep pace. This can lead to pressure, inconsistency and dependence on individuals.

The second is over-building, where structure is introduced too early or too heavily. This can slow decision making, increase cost and reduce the flexibility that initially drove success.

Neither outcome is necessarily a failure, but both can limit the performance and sustainability of the business. The key issue is whether the level of structure is appropriate for the stage of the business.

Sequencing decisions

One useful way to think about this is through the sequencing of decisions over time.

In “The Alchemy of Growth”, the authors describe how businesses evolve through different stages, each requiring different characteristics. This can be viewed as part of the broader task of leadership: deciding what to focus on now, how far to take that decision, and what is deferred as a result.

For example, investing in a new technology platform may consume significant financial resources and leadership attention. That investment may be appropriate if it supports the future shape of the business, but if it is poorly timed or quickly becomes not fit for purpose, the consequences can be significant in both cost and lost opportunity.

Strong leaders tend to make these decisions with an awareness of sequencing. Others may focus on the wrong issue at the wrong time, with the result that the business does not achieve the performance or productivity that was expected.

Why this is important

Being appropriately corporate does not determine success in the short term. Many businesses perform well while carrying inefficiencies or structural weaknesses.

Over time, however, it influences how consistently the business operates, how dependent it is on individuals, how it responds to change, and how sustainable it becomes.

These characteristics become more important as the business grows or matures, and they influence how the business is understood and valued by others.

HHMC Global operates within the staffing and recruitment industry on equity transactions, market valuations and business growth advisory. Contact us to discuss further.