5 Steps for the Owner to Build a Growing a Language Service Provider (LSP)

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Effective management is crucial for the success and growth of any organization, regardless of its size or industry. For a language service provider (LSP), as well as for basically any business, establishing robust management practices can ensure high profitability, sustainable growth, and foster trust and loyalty among clients and partners. At Task Force, we believe that system management is our engine for growth and development. We transitioned to a systematic approach over five years ago when we were a small company. Since then, we have grown significantly, expanding to three offices and 70 employees while achieving a compound annual growth rate (CAGR) of over 50%. 

In this article, I am excited to share the steps we implemented that have worked for us, to achieve this growth, despite external volatility, covid and wars. While this is not an exhaustive guide to system management, I hope some insights will be useful to those seeking growth strategies for their businesses.

1. Define Your Mission and Vision and Implement a Regular Strategic Planning Process

Seems very basic or unnecessary? This is only if you have not done it before! The first obligatory step in establishing system management is clearly defining your company’s mission and vision. These serve as guiding stars for all subsequent management decisions.
•    Mission: The mission is the purpose, the reason your company exists, reflecting an idealistic sense of being with a permanent and stable nature. It guides and motivates, existing long-term with humanitarian messages (to improve, help, etc.). It inspires people and allows them to fulfill their need to create and change the world, to be remembered. 
Profitability is a necessary condition for existence and a means to achieve higher goals, but it cannot be the purpose of existence! Profit is like oxygen for the body but it is not the meaning of life. A useful question to formulate the mission is: "If you woke up tomorrow extremely wealthy, what would motivate you to continue working for your organization?" At Task Force, our mission is "Helping clients to easily overcome language barriers."
•    Vision: The vision is what your organization strives to become. It should resonate with your team, making them feel proud, excited, and part of something bigger than themselves. It should communicate organizational capabilities and the organization's image. It shapes the future direction of the organization, serving as a challenging yet realistic long-term goal (5-30 years). Our vision at Task Force is "To be the #1 choice for our clients, employees, and partners."

It's optimal to develop the mission and vision during a strategic session, involving all key team members (5 to 20 people, depending on the company's size and structure). Next, you need to develop your company’s strategy. In our era of technological innovation and rapid environmental changes, a three-year planning period is often optimal. While much has been written on strategic planning methodology, I will focus on practical advice for beginners:

•    Business Model: Describe your company's current and target business models. This allows you to identify what needs to be transformed, and when. There are numerous templates for business models; we use the methodology by Alexander Osterwalder and Yves Pigneur (detailed in their book "Business Model Generation"). Once a year, we have a look at our business model and discuss whether anything needs to be changed.
•    Strategic Goals and Financial Model: Beyond setting strategic goals and outlining how to achieve them, your strategic planning process should include developing a financial model. This will enable you to sufficiently specify goals across key areas and, by forming a revenue and expenditure budget, verify the sufficiency of resources for achieving the set goals. This step ensures you avoid planning goals that your company lacks the resources to achieve (including capital attraction). It's also wise to verify the sufficiency of other types of resources, not just financial.
•    Transformational Projects: An important result of the strategic planning process should be a portfolio of transformational projects, which you and your team define as the most important to be implemented in the given period of time. A well-crafted strategy should anticipate change, whether it's related to specific aspects of your business model (e.g., product portfolio, market presence, or sales channels) or elements ensuring organizational effectiveness (e.g., organizational structure or corporate culture). At Task Force the team has a lot of work every day, but they know, the transformational projects they are involved in, are the priority. 

After approving the company strategy, the goals and project portfolio will be used for more detailed annual business planning. It's also beneficial to conduct an annual review of the existing strategy (we call this a strategy update) to assess where we planned to be versus where we are, how the environment has changed, and what differs significantly from our initial forecast. This will help determine necessary adjustments to the original action plan.

2. Implement Necessary Changes in Organizational Structure

A well-designed organizational structure should support the achievement of strategic goals at every stage of strategy implementation. This means choosing an organizational structure type that aligns with the company's strategy and business model. A structure that works for one company may be ineffective for another within the same industry if their strategies and business models differ significantly.

Regardless of the chosen type, a good organizational structure should have clear horizontal (between functions) and vertical (between management levels) lines of responsibility, as well as a balance of authority, resources, and accountability for each position.

Creating collegial committees for key functions can be beneficial, as they act as sponsors for regular improvements. For example, at Task Force, we have a Client Committee tasked with continuously improving client satisfaction and strengthening integration with key clients.

An integral part of a good organizational structure is optimal and clearly defined processes (in graphic, tabular, or text format) that ensure effective cross-functional interaction. These processes act like strings that securely bind the organizational structure’s branches (functions) together. For many businesses it is still an open question, how to efficiently embed the processes into the everyday operations, so that the company is not depending solely on the memory of the employees.

Also, founders may find it challenging to delegate decision-making to lower organizational levels and adhere to the hierarchy (e.g., not assigning tasks to subordinates of their top managers). However, this is necessary for organizational growth and to free up the founder for other strategically important tasks. Based on my experience, it can be difficult to maintain the hierarchy we’ve built in Task Force, but it pays off immensely.

3. Establish a Corporate Governance System

Corporate governance is a system that ensures interaction between a company's managers and its shareholders. It includes management accountability to shareholders and mechanisms for controlling the company’s leadership and distributing the results of its activities.

Even for a small LSP or any small business, having a board of directors can provide valuable oversight and strategic direction. The board should include both internal leaders and external advisors to bring diverse perspectives. At Task Force, we have established both a Management Board composed of key executive managers and a supervisory board consisting of owners and external advisors.

Regular meetings of the Management Board and supervisory board ensure that strategic issues and company performance remain priorities. We find this structure very helpful in making well-considered decisions and maintaining control over the company's development.

4. Implement Strict Financial Controls

Sound financial management is the foundation of good system management. Implementing strict financial controls helps prevent fraud, ensures accurate financial reporting, and promotes the efficient use of resources. It's crucial to identify Cost Responsibility Centers (CRCs) for both revenue streams and expenses. This planning allows companies to understand how much they need to earn (and what to do to achieve it) to cover their “wants.”

Designate individuals in each department as cost responsibility centers. This balances authority and responsibility, helping them learn to manage the company’s finances as if they were their own. Since we started budgeting sales and expenses six years ago, we have become more structured and consistent in our work with sales and expenses. While budgeting may not seem exciting, it has been key to our growth from a Ukrainian micro-business to one of the TOP 20 Eastern European LSPs. As a founder and a business woman, I can only confirm that setting goals helps to achieve them!

5. Foster a Strong Corporate Culture

A results-oriented culture is crucial for the success of any organization. At Task Force, we had a family-like corporate culture until 2019, which was relaxing for employees but had clear drawbacks. People did not feel responsible and were used to being taken care of. We had to retrain our employees to adopt a results-oriented culture and take ownership of their work areas. We implemented training programs to promote this culture, encouraged employees to take responsibility for their tasks, and rewarded high performance. Once achieved, the company began to grow faster. This was not an easy path—we lost part of our team along the way because not everyone wanted to embrace the changes.

Conclusion

I have outlined the most important steps for building strong system management for a small or medium-sized LSP. Of course, there are many other aspects to it, such as compliance with laws and regulations, promoting ethical behavior and corporate responsibility, and leveraging technology for management. However, for beginners, it's important to start with the simplest steps that yield quick results and set the company on the path to increased efficiency. Start today by defining your vision and mission, and planning your first strategic session. Strong system management is key to long-term success and sustainability, as evidenced by Task Force!
 

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