Anne Sempowski Ward was brought in as CEO of the Thymes fragrance company to take it to the next level. The founder, Stephanie Shopa, had grown the company steadily for more than 30 years. It was in great shape and poised for future growth.
Capitalizing on that growth was going to require a well-timed, step-by-step cultural evolution embracing hierarchy. As discussed previously in "Why You Must Lead Differently As Your Team Grows", if your team has more than 30 people then you need to get over your natural abhorrence of hierarchy and start substituting some organizational and operating processes for your ability to know everyone on the team.
Leveraging Thymes' Strong Base in Distribution
What Anne inherited was a strong brand, good distribution, and an organization perfectly designed to produce the results it was currently delivering. She had an operations group that included R&D, a sales and marketing function, and an accounting group that was managing all the administrative tasks as well.
Anne told me:
At the end of the day what we were doing worked for the size of company we were, but it was not scalable. We needed to move from an individual-dependent organization to an interdependent scalable system. We had to move from Jane getting it done on her own in her silo to leaders and departments that worked together.
How Hierarchy Changes Organizational Structure
To achieve synergy among leaders and departments, she embraced the power of hierarchy and started evolving the organization to strengthen capabilities in a couple of key areas:
- Operations: Ideas are useless unless they can be executed. Thymes' operations were strong and continue to be strong. Anne pushed this strong group to build on the tactical things it does so well (make, pack, ship) to add in other strategic value-creating activities upstream in the supply chain such as strategic sourcing and more robust demand planning.
- Marketing: One of the common steps in a team's evolution is splitting sales and marketing. At some point, the tasks diverge with marketing charged with building the brand with consumers and sales charged with building the business with customers. Anne made that separation.
- Sales: Always important. As Drucker says, "The purpose of a business is to create a customer". Anne recently hired a new VP of Sales who is charged with fully supporting the existing retailer base while growing in the continually evolving retail landscape.
- Finance: This was Anne's first executive hire. The business was ready for a real finance function that could do strategic analysis and planning as well as accounting.
- Human Resources: Not yet. But soon. For the moment, Anne is the chief people officer with a part-time consultant to support key HR needs. At some point that will evolve.
It's working well. The organization had a breakout year in 2012 and is doing even better in 2013. Here are a few statements from Anne that say it all:
The new CFO, Allison Garside, is amazing. She brought the essence of what we talked about earlier - finance vs. accounting. She had put processes in place before and was an example of what we wanted to do. She symbolized what we wanted to do in the shift in thinking.
Full support of Cindy Anderson, the operations lead who had been with the company over 20 years and built the world-class organization we have today. She has been a true partner for me and someone who was able to bridge from the old culture to the transformation.
Timing. Knowing when to implement each of these things - when to push a change and when the organization was naturally making a shift. Doing things in a nice, orderly way that made sense. For example, the departure of the prior head of sales and marketing opened the door to split sales and marketing into two different roles and leaders.
Implications For Leaders
All teams evolve from starting to operating to embracing hierarchy. With a "starter" team of less than 10 members, leaders must emphasize environment and values. With a team operating like an extended family of 10 to 30 members, emphasize attitude. With a team of over 30 members start to embrace hierarchy (emphasizing relationships and behaviors) by:
- Working on the organization.
- Putting in place enabling practices to scale.
- Reinforcing vision and values - the number one job of a leader.