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 I want to welcome you back to our 10-part series on core business processes. So far, we've covered customer strategy and relationships. We've covered employee development and satisfaction; quality process improvement and change management; financial analysis; reporting and capital management.

This blog is on core business process number five: management responsibility.
I want you to think through what we're going after here. What we are talking about is under the category of “why are these important”? Why do you need to be core competent in these things -- at least in seven, if not all of them. Why is it critical to the success of your business and the success of how you interact with large companies? I'm going to spend a little bit more time on this one because this one not only sets you up for success with big companies, it sets you up for success in general.

Let's talk about management responsibility. And in this case, really and truly, we're talking about the stewardship of the company -- who is responsible, who is accountable. It's not necessarily who gets the work done -- it's who's overseeing that the work is done per expectation that it is done to meet the objectives of the business. That gets you into the conversation of was the work done on time. Was it done properly? Was it the right work? Did you have the right people? Did you properly define who's responsible for overseeing the work? Does the work support the stated objectives of the company? All of that is encompassed in management responsibility.

We're going to discuss the work of a manager, and then we're going to discuss the essential skills of a manager. The work of a manager is hiring and staffing -- making sure you have the right people. One of my mentors, Michael Gerber, makes a very interesting argument. He talks about the retail or fast food industries. and he makes the argument that retail or fast food hires the absolute best people. He doesn't mean that to be denigrating or disrespectful to anyone. What he was getting at was if you're a business owner and you have well defined processes, then you should be able to bring competent and capable people in to execute against those processes. You clearly are going to have some great people, but not every single person has to be “great”. They do have to be capable and competent however, and there's a fantastic business model that surrounds having well-defined processes so that you can bring capable and competent people in.

If, after hiring, they should choose to go off and do other things, then you can easily bring in other people. That's not to say that you won't have some great people and folks you won't miss, but you have a process designed so that losing a person is not critical to the business. That's his only point. And if you design your business around having mostly capable and competent people and you have a few stars in other positions, then you've set up a fantastic business model -- highly repeatable and highly scalable -- because you have documented processes in place that allow you to bring people in that can perform and execute against that. Manager training; onboarding new employees; coaching and developing existing employees; dealing with performance problems and terminations; supporting problem resolution and decision-making; conducting timely performance evaluations; translating corporate goals into functional and individual goals; and monitoring performance all become easier when you have documented processes in place.

That one's pretty substantial, especially if you bring on a new contract, a big corporate client, you have to understand what the goals are for your business and then have to understand how you translate your goals through the company to make sure you can support a big corporate client by monitoring performance and initiating action to strengthen results. We talked a lot about continuous improvement, monitoring and controlling expenses and budgets, tracking and reporting scorecard results to senior management, planning and goal setting for future projects. That's just to name a few. I'm hoping you aren't overwhelmed by that list and I'm hoping you're not overwhelmed primarily because when you talk to corporations, at some point you're going to come across a manager very quickly and this is their day to day reality.

So if this is your day to day reality or if you know something about these things, you will be a kindred spirit. You will understand what they're confronted with. You'll be able to quickly, easily and readily translate for them how what your company is offering addresses a pain point in their business. Then when you go out to lay out the project plan around what you're going to do and how you’re going to do it, they know that you understand how a project has to actually perform well within a team structure. You understand what management's role and responsibilities are; what resources you need to bring on; what the budget needs to look like; and what the timing looks like because these are things that they deal with. So just your general familiarity with that becomes huge.

You don't have to have a team of hundreds and thousands of people in order to know this, but you do have to have some sense within your company that this is the actual work of a manager. And as you begin to grow your business, these are things that should be natural for your management team under your actual management responsibility. This becomes very differentiated for you as a small business owner because you are perhaps doing a lot of things yourself. What you're now doing is beginning to provide the roadmap to how your business expands; how you bring additional people on; what you have them doing; what  their functional responsibility is. What roles are you going to have them assigned to within the company? That then allows you to communicate how your company is going to perform against a contract, and why your company is best suited to do it. It also gives the customer confidence that you can handle the business.

Now let's delve into the essential skills of a manager. There must be leadership skills even though there are differences between leaders and managers.  Not all leaders are good managers. Not all managers are leaders, but there has to be leadership capability because you have to motivate the troops. I think the best way I can talk about leadership is I was listening to an army general - Joel Schwarzkopf - who commanded the forces in the desert storm war when the U S went into liberate Kuwait from Iraq. I was listening to him talk and he was talking about what is leadership and he made a fascinating argument. He says, look, if I told you there was $1 million in the back of the room, that's not leadership because most people would get up and go and check it out and try and grab it. All right? He said, that's not leadership. He said leadership is inspiring people to do what they otherwise would not choose to do on their own. That one's always struck with me because now we're talking about having a cause for your business, a vision. When you start talking about goals, objectives, when you start talking about culture, when you start talking about why people want to get up in the morning and come work for you -- what is it that motivates them?

And then as you begin to add management, how do they then begin to demonstrate leadership? They may not be responsible for the vision of the company, but managers are responsible for buying into the vision of the company, the strategies, the goals, the objectives, and even at their level providing leadership so that they keep the troops engaged. That's a huge skill set. I had a friend of mine tell me people don't leave companies, they leave bosses. Employees don't feel like their boss has their back - typically due to some breakdown in communication which should be a strong skill set of any manager. I'm just stating things that you probably already know, but we're repeating them in case it's something that you need to work on and get some additional support in  training and collaboration. Collaboration doesn't necessarily mean consensus. There's a lot of debate about that. Collaboration oftentimes means that you talk to other people in different departments. You try and make sure that you bring many perspectives into a process. Obviously sometimes not everybody's going to be on board, but if they felt like they were at least communicated with, that their opinion was heard or at least taken into consideration, you've advanced the cause. So, collaboration is a huge skill set. This isn't one of those things where you close the door to your office and you come up with all these great ideas on your own and then become frustrated because nobody understands how smart and how brilliant and how great a plan it is. You have to have a good deal of collaboration as a manager, and you have to collaborate with customers.

Then there is critical thinking. I think that one goes without saying because you want to design everything so that in a normal course of business, things work the way they're supposed to work. Therefore, you're dealing with issues based on exceptions - things that are popping up out of the ordinary, things that you haven't considered. When something comes up that you have not encountered before, you need to have critical thinking to help think through what is the most effective way to integrate it into our process? Even if you have to rethink the process now that you know this is something you're going to have to deal with -- assuming it's not a one off. How do you handle it? Who do you need to get involved? What is the impact of making a change? All of those things need to be addressed.

Clearly, as a manager, finance is critical. You have to know your numbers. It is the number one skill set for any management. You have to know your numbers and be able to effectively manage projects. So, we have leadership, communication, collaboration, critical thinking, finance and project management. Obviously the main thing that comes into being a manager is you have the day-to-day business that needs to get done, but there are always projects coming along - different things that need to be handled. Call them opportunities, call them whatever you want to call them. But invariably you have projects that come through, in which case you have to look at what new activity can you accomplish with your existing resources? Even if your resources are 100% utilized, how do you redo the work? Now we're back to critical thinking and project management -- just knowing how to staff a project, how to get the right people on, what's the budget that you need to set aside for it, what's the timeline, how to keep everybody on task and make sure that you've identified the critical success factors and you've identified any major milestones so that if a problem does come up you have plenty of time to deal with it -- hopefully before going over budget or going beyond the due date – is extremely important.

So project management skills are huge. Once again, just to repeat the essential skills of a manager: leadership, communication, collaboration, critical thinking, finance, project management. And the work of a manager: hiring and staffing, training new employees, coaching and developing existing employees, dealing with performance problems and terminations, supporting problem resolution and decision making, conducting timely performance evaluations, translating goals into functionally individual goals for the employees, monitoring performance and initiating action to strengthen results, monitoring and controlling expenses and budgets. Tracking and reporting scorecard results to senior management, planning and goal setting for future periods. Even large corporations go through reorganizations to get their management structure down on this -- in some cases, every two or three years. This is always something that you're going to be working on.

Your big corporate clients are always looking to be more productive and to be more efficient and to be more effective in their management as well as the entire company. So, do you need effective management responsibility to make money? Yes, you do. You absolutely need it to make money. This alone is one of the major transition points from a lifestyle business to a highly scalable legacy business. It really, truly is just one of those differentiators. So, it has to become core to your business. Once again, when you have these 10 core business processes you will have finally moved yourself from a primadonna business to a scalable business and become more of a business scientist.  

In our next blog we're going to talk about business process number six: customer acquisition -- the sales process. You've got to love that one.

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