Small firms that expand face culture, communication challenges

Q: As a business that is scaling up from a three-person staff, what are some unexpected challenges that we will face? What can we do to prepare for these challenges?

A: You are wise to anticipate the consequences (both good and bad) of your firm's growth and try to manage them proactively.

Your top two concerns should be firm culture and employee communication. At the current size, it is relatively easy to establish and maintain the culture that you desire for the firm. In fact, I suspect that there are several elements of the firm's culture that are "taken for granted" by current employees — knowing what to do, how to do it and when to do it, all in accordance with your preferences and way of thinking as an owner. These "implicit" rules regarding the way your firm accomplishes its work will need to be made "explicit" for new employees.

Ditto for communication. Expansion increases the need for and likely the complexity of communication within the firm. While e-mail and other workplace technologies can facilitate communication, some important aspects of communication can be lost, such as informal chance conversations and nonverbal or visual cues, all of which can enhance the effectiveness of communications.

As you look to formalize and codify critical components of the firm's culture and communication, make certain that you focus on the elements that are important to the marketplace success of the firm. With culture, for example, things like how employees should interface with current and prospective clients are critical, since the firm is a service-based business.

On the communication front, specify what type of client situations warrant "further discussion" with management or other employees and when, temporally speaking, such situations should be communicated within the firm.

Finally, if future employees will be compensated based on commission, ensure that the pay structure incentivizes behavior that is consistent with the firm's values and the way that it wants to do business.

Michael DeVaughn is an associate professor of management and faculty director for the Full-Time Flex MBA Program at the University of St. Thomas Opus College of Business.