Management Is Your Toughest Job!

Why does "good" management seem to be such a challenging part of your business?

There is a book entitled, First Break All The Rules, written by Markus Buckingham and Curt Coffman.  It is an exceptional book and should be required reading for everyone who runs a small business or is considering a start-up business.

In this book they ask the question...

What do the worlds greatest managers do differently?

• They look for talents, not weaknesses
• They do not take their own beliefs and assumptions for granted.
• They maximize diversity, not uniformity, in groups and create hero's in every team role.
• They learn from their mistakes.
• They know how to manage differences and are good at resolving conflicts.

How does this apply to the small business owner?

Ask yourself if your are faced with any of these problems and frustrations:

• If I left my business, even for a short time, it would fall apart.
• I work too many hours.
• I do a majority of the work myself.
• Its easier to do the work myself rather than train someone to do it.
• Finding good employees to do the work that I do is too expensive.
• When I finally find a manager to help me, they don't know what to manage.
• My employees do not follow the rules I have put in place.
• Training my employees cost too much and I don't have the time to do it.
• My employees aren't motivated to do a good job (as good as I can do it).
• I feel like my employees take advantage of me.

Do any of these management issues sound familiar to you?

Are there some potential solutions to these problems and frustrations?

Lets start with the basics.  There is an excellent overview of management issues at the Small Business Administration web site that you should investigate.  The SBA asks you to examine several aspects of managing a business as well as looking into your own personal motivation on owning and operating a small business.

Lets look at some specific areas of management that will help eliminate some of your frustrations.

1. Training

The most effective way to gain large chunks of time to manage your business is to train others in your business to do many of the jobs you do today.  In order to be effective in your training you must document the training program you chose to provide.

This is a time consuming effort however, the pay off in time saved more than makes up for the initial time spent on developing training programs.  An additional benefit to writing your training programs is in training new employees, employees you promote to a new position, and training required due to personnel turnover.

Finally, if you develop the training programs you are able to set the standards that employees are required to meet.  This allows an employee to know, follow, and understand your expectations.  This also improve employee morale and motivation. 

Nothing is more disappointing than an employees does not know what you expect.  In most cases when an employee is uncertain of your expectations they use their own discretion to solve issues.  In a majority of cases both you and the employee will be disappointed in the outcome.

2. Learning good management techniques.

You must learn to manage people and activities to keep you business growing.  Remember what was said earlier about the "greatest" managers they look for talent rather than weaknesses, they are good a managing differences (and settle conflicts) and finally they learn from their mistakes.

Remember, you really never manage people; they manage themselves.  Your role in management is to create the "systems" and "processes" in which they function.  You create the standards by which you can evaluate their performance.  If you don't define and clearly communicate (document) what your standards are, your employees will not perform to their full capabilities.

3. Learning time management.

There never seems to be enough time to do all the things a small business owner must do.  that will probably never change.  However, there are many steps you can take to use the time you have effectively.

They include:

• delegating non-managerial duties whenever possible.
• provide clear instruction and monitoring a job to be certain it is completed in a timely manner.
• schedule your own personal work to enable you to produce more in less time (here is a site that may help you Organize your life with FranklinCovey!
• define managerial work for others to free you up to work in your area of strength.

4. The primary role of management is to attract and retain customers.

That sounds like such a simple statement. However, it requires well thought out “systems” to succeed.

What strategies and systems do you use to “Attract” customers?

At the “start-up” of most small businesses, the business owner is the primary sales generator.

You used a “strategy” or “plan” to attract your first customers.  Do you remember how you got your first customers?  Where did your customers first come from?  Why did your customers first begin to buy from you?  What did you say or how was your product or service presented?

There was a strategy used. Do you remember what it was? Are you using it today? Does it still work?  Have you expanded how you attract customers? What new methods, techniques, strategies are used today?

These are the questions a “good manager” of a business must be asking.
As the manager, you are responsible for the development of these strategies.
Warning: If you find yourself involved in activities that are NOT related to attracting and retaining customers you are “creating costs”. Most small businesses cannot tolerate these costs.

As a manager of your business you must develop the systems by which you attract customers and then keep them (retention) coming back to do more business with you company.  You have many choices in developing the systems to attract customers some of these include:

• A direct sales force
• Direct mail
• Referral marketing
• Joint venture marketing
• Tele-selling
• Advertising in publications (newspapers, trade journals, magazines, etc.)
• Internet Marketing

Once again, you must document your strategies and systems. The reasons for documenting systems are many. Here are a few reasons:

• You clarify your thoughts.
• Those you depend upon to implement your strategy or system have the opportunity to understand what your vision really is.
• You have a “starting point” from which to make improvements.
• You don’t have to “re-invent the wheel” when a new opportunity presents itself.
• You make it easier for your customers to understand how to do business with your company.
• You will be able to attract a higher quality employee to your business because they will be able to see how they can contribute and have a level of success with you company.

What strategies or systems do you use to “Retain” customers?  Customer retention is probably the most “critical” issue for management to deal with.  How many of your customers buy from you year after year? 

Do you measure your customer retention?  For every one-percent increase in customer retention you will improve net operating profit by 35% to 50%!

A “powerful” fact that is overlooked far too frequently.

What are the strategies and systems you have to manage to control and improve customer retention?

There are many, including:

• Planning the work for your people, daily, weekly and monthly.
• Scheduling work on a day-to-day basis.
• Training people on the systems in the business (processes, procedures and policies).
• Training people on the products and or services you provide.
• Organizing people and their positions to get work done efficiently and effectively.
• Staffing positions to keep up with the demand of customers.
• Direct the development of training programs on recruiting and hiring.
• Training managers and supervisor on proper management methods and techniques.
• Developing and writing company policies and work rules.
• Clearly stating (in written form) expected results to be generated for each position in the organization.
• Creating, defining, and managing compensation plans.

To conclude, you will need an “overview” for management of your business?

You have two primary activities related to the management of your business.

First, you have strategic activities. Second, you have tactical work to perform.

What is the difference between the two activities? The elements of strategic work include:

• Planning
• Forecasting
• Controlling work output
• Reporting
• Setting standards
• Creating and defining policies
• Communications with employees, suppliers, customers, bankers (stock holders).
• Creating “fair, equitable” compensation plans for the entire company

Second, the elements of tactical work include:

• Determining what your employees, suppliers, customers, bankers (stock holders) want and need to run the business successfully.
• Setting schedules for work and activities to be performed.
• Training people to meet the “results” expected by employees, suppliers, customers, and bankers (stock holders).
• Defining and writing job descriptions.
• Evaluating job performance against the standards set for the business.

When you make standards clear, everyone in your business will naturally perform at a higher level.

How is this done?

You document (in writing) your goals and expectations for your employees, suppliers, customers, bankers (stock holders).  With out this documentation you have what is known as“upward delegation”.

What does upward delegation mean?

Everyone in your business runs to you for answers in any situation. And, you are making all the decisions, all the time. Decisions both large and small. 

What is the normal result of this?

You will find yourself complaining that your employees are not motivated, don’t follow instructions, aren’t committed to the business, never follow through, can’t be trusted, take advantage of you, etc, etc.

Does any of this sound familiar? 

How do you solve this problem?  

It brings to mind, Ben Franklin’s saying, “An ounce of prevention is equal to a pound of cure”.

By working “on the business” rather than just working in the business” you will solve 90% of the predictable problems you experience.

Your goal as a manager of your business is to spend at least 75% of your day “working on the business”and the balance of your day working in the business. If you create this pattern your business will flourish!

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