For Ghanaian businesses trying to grow beyond the small-business stage, having enough money to expand is only part of the challenge. How the business is organised, managed and controlled can also determine how well it handles growth.
The issue has come into focus following comments by GOIL Group Chief Executive Officer and Managing Director Edward Bawa, who said his transition into the leadership of the oil marketing company was made easier by the people, structures and policies already in place.
Mr Bawa said the support he received from his heads of department during his onboarding, together with the willingness of staff to help him settle into the organisation, made the transition smoother than he had expected.
But he also pointed to the importance of having systems that do not depend entirely on individual employees.
“You need people supporting you; that’s the human capital. That’s the most important part of it. But you also need the structures,” he said on Joy News’ PM Express Business Edition.
He said clear policies also help employees understand what is expected of them and the systems available to achieve the company’s objectives.
His comments come against a wider challenge for Ghanaian SMEs, where access to finance remains a major constraint, but studies have also linked management capacity, governance and internal controls to business performance.
A study of SMEs in the Greater Accra Region found that inadequate managerial competencies and governance systems were among factors affecting the development of smaller businesses, including their ability to access financing.
Another study of 300 SMEs registered with the Association of Ghana Industries found a positive relationship between the effectiveness of internal control systems and financial performance, with corporate governance strengthening that relationship.
For businesses that are still largely driven by their founders, these issues can become more visible as operations expand.
A founder who once handled customers, suppliers, staff, finances and major decisions personally may find it increasingly difficult to maintain the same level of control as the business takes on more employees, larger contracts and external financing.
The challenge, therefore, is not simply about putting more people into the business. It is about creating systems that allow those people to work with clear responsibilities and within processes that remain consistent even when individuals change.
That was part of the lesson Mr Bawa drew from his own transition at GOIL.
“I wouldn’t zero in on just people, people, people. I think there’s a combination of just, one, the people, the structures, and what are the principles underpinning your activities,” he said.
For SMEs seeking to move into larger markets or attract bank financing, private investment or other forms of capital, the strength of those structures can become increasingly relevant.
Investors and lenders are not only looking at sales or the size of a business. They also need to understand how the company manages its money, keeps records, makes decisions and controls its operations.
This means that as Ghanaian SMEs look for more capital to expand, the ability to show that a business can operate beyond the direct involvement of its founder could become an increasingly important part of the growth process.
The gap between a business that is built around its owner and one that can operate through established people, systems and processes may ultimately determine how easily it can take the next step in its growth.
