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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