There’s a great article on Chobani, the Greek yogurt pioneer, and it’s founder, who almost lost it all because he didn’t build a structure of competent professionals to help him manage the business.
But, the big question the article didn’t answer is a what point do you decide to upgrade your personnel? For Chobani, it appeared to hit when they built a second big plant 2,000 miles from their first plant and headquarters, and as a result, got into financial trouble, only to be rescued by a vulture capitalist, who lent them a bunch of money in return for an equity stake in the company, in addition to normal repayment terms (I’m guessing, since the article didn’t say). And, Chobani had to hire a CEO, since it’s founder had long ago run out of ability to manage a much larger company. Not too onerous, all things considered.
The professionals have apparently saved Chobani a bunch of money in logistics and purchasing, which isn’t surprising.
And, continued growth has also indicated a need for a seasoned professional CEO, to take over from the owner. We have a couple of Solutions Forum members in the same position, and one of them has got to hire a professional CEO, but is resisting. We’ve decided to let him crash and burn again (he’s stubborn).
The point of it is, you have to know when to bring in higher grade professionals. It’s hard to figure it out, too, because I have a lunch next week with one of our clients who might have done it too soon, and is drowning in added expense. On the other hand, we normally advocate hiring the right people when they’re available. The finances can be rejiggered, which is probably what we’re going to do for him.
So, at what sale ranges do you decentralize your people and upgrade? It all depends, on a lot of factors. Start at $1million, start upgrading at $5 to $10 MM, which is the part it looks like Chobani got right.
At some point though, the founder’s got to step aside and admit that he/she doesn’t have the wheelbase for expanding as rapidly as one must, but that’s hard, too.
We’d be happy to provide a sounding board to talk it over. You can take some courses at our School, but this is a hard one.