Are you an entrepreneur and have you ever been excited about hiring an executive to professionalize your company, but the process turned out to be more complex and with fewer results than expected?
Or perhaps you are an executive and experiencing frustration because, although you have been hired to professionalize an organization, key decisions are not being made?
Why is this happening? The problem is that professional executives arrive with structured knowledge on how to move toward professionalization, but this path involves important decisions, such as personnel changes or investments, that often do not have the support of the board.
Professionalize: more than a concept, a necessity. Professionalization consists of applying the principles of business administration. It is important to understand that creating a business and running it are completely different processes. Creating a company requires creativity, courage to take risks, speed, ability to speculate, lobby and skills to attract investment. However, once the company has reached a certain size, founders face limitations in managing all necessary fronts: from selecting and retaining the right talent to making strategic decisions based on data.
At this stage, it is common for business owners to decide to hire a professional executive, assuming they will be able to handle these challenges. But a conflict arises here: a professional manager operates best in an environment with teams that share a structured vision, work autonomously, and are evaluated by clear indicators. Many times, people in the organization do not have these characteristics, and, even if attempts are made to train them, they do not always have the willingness or ability to adapt.
When the board, for emotional reasons, blocks the proposed changes, the professional manager encounters insurmountable barriers and ends up being perceived as a disappointment.
The challenge of necessary investments. Professionalization also requires investments in systems, processes, new positions and talent, but the results are not immediate. This can lead to skepticism among shareholders, especially when there is no shared vision or when there are different perspectives among them (for example, prioritizing growth versus enjoying current profits).
The responsibility of the board of directors in business success. Although shareholders have the freedom to make decisions, they also have a responsibility for the success of the company, not only for the jobs they generate, but also for the legacy and effort invested in its creation. An effective way to balance this freedom with responsibility is to have a professional board of directors, which allows emotions to be separated from business decisions and facilitates an objective and enriched decision-making process.
Keys to a professional directory
- Incorporate external and trusted members: It is recommended to include independent advisors or directors with complementary skills, such as financial experience, international vision, legal knowledge or specific markets. These people provide an objective and up-to-date perspective on the path forward. Their selection must be rigorous, even with the support of specialized consulting firms.
- Establish clear decision mechanisms: It is not enough to incorporate external members to the board; Your opinion must be heard and seriously considered. It is essential to define a process that allows us to propose alternatives supported by concrete information and collect the opinions of all members. Decisions must be made based on analysis, leaving emotions aside, and respecting the diversity of points of view.
The consequences of not professionalizing. When a functional and professional board of directors is not in place, key decisions—such as expanding product lines, adopting new technologies, or entering new markets—are often postponed, putting the company’s competitiveness at risk. On the other hand, if the professional CEO’s proposals are properly justified, he should be allowed to act, since that is the reason he was hired.
A company is not just the interaction between two people; It is a complex system that includes the board of directors, management and other subsystems. As in the human body, the “head” of the company, represented by the board of directors, is essential. Therefore, developing and professionalizing boards of directors is key to facing the growing complexity of the business environment and ensuring long-term success.
*Ricardo Bäcker is Management consultant and Headhunter Founding Partner of Bäcker & Partners.
by Ricardo Bäcker
