The Greek SME at the Turning Point: When Experience Is No Longer Enough
Every business that lives long enough reaches a point where what has grown it so far is no longer enough. There is no specific date and no single event to point to. Gradually, the way the business operates simply falls behind how large the business has become. In Greece, where most businesses are built around the judgement of one or two people, this happens often, and no one notices it easily.
The model that brought it this far
The typical Greek SME has a simple formula: the founder knows the market, knows the customers by name, makes the decisions personally, and because the distance between decision and execution is zero, the business moves quickly. This is not primitive at all. At a certain size it is far more efficient than any complex structure, because one person with good judgement can indeed keep the entire business in mind: who owes money, which customer is unreliable, what performs, and what does not.
The issue is that no one put an expiry date on this formula. It works perfectly at ten people, well at twenty, and with difficulty at thirty. The founder has not become worse. The business has simply become more complex than can fit inside one head, however capable that head may be.
How it appears in daily operations
It does not appear as one major failure. It appears as many small frictions, each of which seems manageable on its own. Decisions are delayed because they all pass through the same office, while that office now has three times the workload it had five years ago. Good executives leave because they are never given real authority to decide anything on their own. Knowledge about how the business is doing exists, but it 'lives' in the heads of specific people, so it leaves with them when they leave.
The most interesting sign is this: the business grows in size without growing its capacity to manage that size. Turnover rises, the number of people rises, but the way decisions are made has remained the same as when the business was one third of its current size.
Experience does not lose its value; its role changes
This point requires care, because it is often misunderstood. The founder's experience does not become less valuable at this stage; quite the opposite. What changes is how it should be used. Until now, it served to make all decisions personally. In the next stage, it serves to build the system that will allow other people to make the right decisions without the founder-entrepreneur being present every time.
This sounds like giving up control, whereas in reality it is the only way to keep it. A founder-entrepreneur who insists on personally deciding everything, when the size of the company no longer corresponds to this decision-making method, ultimately loses control, only slowly and quietly. Decisions are delayed so much that they are eventually made by others, or not made at all.
What it means to move past it
It is not one step; it is many at once. Someone must actually have authority, not just on paper, to make decisions within one part of the business without asking every time. Knowledge must come out of people's heads and be written somewhere: in processes, files, and systems, so that the business does not stop when someone is absent. More points within the business must be able to make decisions in parallel, within limits agreed in advance. And management itself must accept that its role is changing: from doing everything itself to creating the framework within which others will do everything.
None of this happens easily, and there is almost always resistance, first and foremost from the entrepreneur, who has been used to one way of working for thirty years and does not find it easy to let go of it.
The hardest part is seeing it
The most difficult part of this entire issue is not technical. It is understanding that the business is at this point before a crisis confirms it. The businesses that manage this are not necessarily the richest in resources. They are the ones where someone in management sees in time that the formula that brought them this far is not the same formula that will take them further, and is willing to change their role before circumstances force them to.