By Karen E. Klein Q: I am operations manager for a $5 million business that wholesales and markets textiles to specialty retailers. We are trying to make good decisions about our organizational structure. We currently have a president (the company owner), a marketing director, a controller, and me. The president is looking for a vice-president of sales, but I feel we need a general vice-president to make decisions in the president's absence (and also to make sure a sales vice-president doesn't give away the house!). I would welcome your feedback regarding the most efficient organizational structure and appropriate leadership. -- M.M., San Francisco
A: There simply isn't a one-size-fits-all, textbook solution to your dilemma, experts say. The best management structure will depend on things like your intermediate- and long-term objectives and your overall business strategy. Since sales vice-president is the position being contemplated, it also would help to know something about the sales process for your products in your markets. Finally, in a company with a management team as small as yours, it would help to candidly assess the strengths, weaknesses, and motivation of the key individuals already in place.
INTERNAL DIVISIONS. Are there specific problems at the company that are not being addressed with the current management team? Your fear of a sales vice-president giving away too much suggests that there might be an issue with discipline. Is the current sales force too ready to offer discounts? Your reference in passing to the president's absence also suggests there could be a problem area that might need looking into.
Only you can answer those questions, but there are some generalizations that certainly bear considering.
"If the objective is to grow sales by increasing sales-force size, improving sales productivity, improving competitive win rate and improving selling skills, then hiring a talented, full-time sales vice-president could be the best use of resources," says Marty J. Schmidt, president of Solution Matrix, a Boston firm specializing in strategic planning. "Just how important it is to have good, focused sales management depends on how you sell and compete, how satisfied you are with current sales hiring and sales productivity, and how many sales people you have."
BUILDING MUSCLE. On the other hand, if your business strategy involves larger issues, such as changing your business model, launching new product lines, entering new markets, forming alliances or otherwise expanding and adding complexity, then a good general vice-president could be the best choice.
Says Schmidt: "A management team this small needs multiple talents and contributions from each of its leaders. As the business grows in size and complexity, no one person is likely to be able to cover everything. Bringing in a general vice-president whose strengths complement -- rather than replicate -- the strengths of the people already there could be critically important."
Your best bet at this point is to take these suggestions to the management team and use them as starting points for a more detailed discussion - perhaps with a management consultant who can look at your business and offer more valuable advice. Best of luck!
Have a question about your business? Ask our small-business experts. Send us an e-mail at Smart Answers, or write to Smart Answers, BW Online, 45th Floor, 1221 Avenue of the Americas, New York, N.Y. 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally. Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.