The evolution from a small to a medium-sized business is a journey fraught with growing pains, challenges, and paradigm shifts. One of the hardest barriers operating a small business is turning that business into a medium size business. A key element of this growth strategy is growing your team, ensuring consistent quality of service or product offering and doing this in a scalable way.
Using the ABS data from 2023, businesses within Australia are broken down into the following groups:
| Employees | Number | % of Total |
| 0-19 | 2,520,419 | 97.4% |
| 20-199 | 64,559 | 2.5% |
| 200+ | 4,895 | 0.2% |
| Total | 2,589,873 | 100% |
Growing from the 97.4% of the business population to the 2.5%, and employing more than 20 people and generating $5m plus in annual income, leaders are often met with the critical challenge of maintaining clear communication and cohesion within their teams.
John C. Maxwell’s Five Levels of Leadership offers a crucial framework for understanding how effective communication plays an intrinsic role in achieving this.
1. Position – You have the Title & Rights
The first level of Maxwell’s leadership hierarchy is based on position. Leaders here have authority merely because of their title.
The communication in this stage is typically top-down, and while this may work for very small teams, it becomes increasingly inefficient as a business grows. To transition to a larger scale operation, there must be a move from solely positional communication (relying on titles) to fostering a genuine connection with team members.
2. Permission – Relationship are Genuine
At the second level, leaders communicate not just from a place of authority, but from a place of genuine relationship.
It is in this stage that the foundation of trust is laid. As businesses aim to scale, this level of trust becomes vital. Leaders must regularly check in with their teams, not just about work, but about their personal lives, aspirations, and challenges. This forms a bond that’s essential for navigating the complexities of business growth.
3. Production – Results through Effective Communication
The third level, Production, is where things get done and results are evident. Communication at this stage is geared towards achieving specific outcomes.
The leader sets clear expectations and ensures that everyone is aligned towards the same goals. This clarity is crucial when a business is aiming for an ambitious target, such as a $5m+ annual income. Every team member needs to understand their role in reaching this target, and this understanding stems from transparent, consistent communication.
4. People – Reproduction of Results through Nurturing Growth
Level four emphasizes the development of people.
As a business grows, its leaders must not just communicate what needs to be done, but also empower their team members with the skills, knowledge, and confidence to achieve those tasks. This involves mentoring, training, and two-way feedback. A leader must be receptive to feedback as much as they give it, creating a culture of continuous learning. This level of leadership and communication ensures that as the business grows, the team grows with it.
5. Pinnacle – Respect with Legacy and Influence
Reaching the Pinnacle is about legacy.
A leader at this stage influences not just through direct communication but through the values, culture, and standards they’ve set. The communication here is often less about the immediate tasks and more about the broader vision and ethos of the company.
For a business transitioning from a small enterprise to one with over $5m in annual revenue, this means the leader’s vision should be clear, inspiring, and continuously communicated. It’s not just about numbers but about the lasting impact and value the company aims to create. The leader’s communication at this stage shapes the very identity of the growing business.
Wrapping Up
Scaling a business is not just about strategies, market research, or financial planning – it’s profoundly about people. And the key to unlocking the potential of those people is through effective communication. As highlighted by Maxwell’s Five Levels of Leadership, a leader’s approach to communication significantly influences their effectiveness and, by extension, the success of their business.
As you stand on the brink of expanding your business, take a moment to assess your communication strategies. Reflect on Maxwell’s levels and ask yourself: “Where do I stand? And more importantly, how can I leverage the power of effective communication to guide my business to new heights?”
With the right leadership and communication ethos, that $5m+ annual income isn’t just a dream – it’s a tangible, achievable reality.
