So having identified the gap, the distance between where we want to get to and where we are today, we can surely see that something has to happen in between. This is where the methodology that I mentioned I would share with you in our previous edition of this newsletter comes in.
In short, the method is about fixing the issues in your business, optimizing performance, and aligning employees’ performance with desired results. Along the line, you will find more cash in your business, build profits, foster greater performance, teams, and leadership, and overall become a better business owner of a much more efficient and profitable business.
The very first step of this journey is to establish a management team. You do not wish to go this one alone. If you have already built up a business, you have more than likely witnessed firsthand that as you grew you needed more personnel to spread the workload over and to assign certain functions and responsibilities to. The best of businesses are not one-man shows.
At the stage you are in it’s more than likely you already have employees and probably have a management team of some sort. However, even if you do have a management team, I would suggest that you follow along in this edition and the upcoming ones too, for you may gain perspectives on how you could potentially run your management team meeting more effectively with the intention of improving results (i.e. improving your net profits).
Now to create your management team, you will need the key important people of your organization. Who are these people?
Well, you will need people who represent and (probably) lead up the areas of your business. In a very simplified business model, you will have 3 compartments: Sales, Operations, and Finance.
Sales: Without Sales you have nothing. Without Sales you do not have a business. In short you may think of this compartment as the art where you Get The Work.
Operations: Operations is where you do all the things necessary in order to deliver upon what you sold. You may think of this compartment of where you Do The Work.
Finance: Finance is where we ensure that our books are in order so we can see if we are generating great and profitable results. This is where we Keep Score and also where we Get Paid.
Often when you talk about Sales you may also talk about Marketing. If you have a bigger business you may have separate departments for these, and thus you can expand on the team members that would make up the necessary parts of your management team.
Similarly, you may have a production company, where you need your production manager as part of your team, but you may also have additional people for e.g. research and development, quality control and compliance etc.
Ultimately speaking you do not wish for the management team to be too large. The idea is to produce results, and also create management team meetings that are efficient and get things done, while avoiding endless discussion or time spent on anecdotes.
For most of our discussions, I will focus on smaller businesses where we have a smaller team. For those of you that operate somewhat larger organizations, you can extrapolate from these concepts or of course reach out to me and I can discuss this with you and help suggest ways of making it work for your business.
Before leaving the larger organizations you may consider that you break off some of the management team meetings, so that topics are handled separately and so as to avoid too many employees’ time being spent on matters that does not involve their direct participation. As an example larger businesses may chose to have Sales and Marketing Management Team meetings separate from the others, and the same for Operations, which may even have their separate Quality Control meetings, etc.
Ultimately speaking though, to invoke a sense that everyone in your organization is part of generating the results and are interdependent upon each other, you may wish to have some form of Management Team Meetings that then summarizes the results for all the business.
When helping a lot of clients and I ask them who takes care of what, the conversation often goes something like this:
Consultant:: “Who takes care of Sales in your organization?”
Business Owner: “Well, I do”.
Consultant:: “OK, who is in charge of operations?”
Business Owner: “Well, that would be me also”
Thankfully, for the most part, at least they have someone else who is handling the books. But that means the CEO is also head of Sales and Head of Operations, and probably a bunch of other things too. Spread too thin, taxed with too much, and probably neglecting a lot of important things while minutiae and fires have to be put out all the time.
If this is you, you have to begin to make some serious changes.
Ideally, you will have separate people in charge of each of these compartments of your organization, so start thinking about how to get this in place.
In the next edition of this newsletter we will look a how to structure your management team a bit further. How to choose the right people for the task.
