If you own a business, then you’re no stranger to work. Unfortunately, it’s easy to be busy for 60 hours a week without making much progress. The reason many owners find themselves on this unprofitable treadmill is because success is not simply a matter of working hard, it’s a matter of doing the right kind of work. You need to be doing work that will leverage your efforts and get you closer to your goals. This starts when you learn to recognize the real value of your time.
Whether you promote them from within or hire them from outside, relinquishing operational control to a management team is a scary proposition for many entrepreneurs. After all, you built your business, so how could anyone else run it as well as you?
The fact is, however, the sooner you can free yourself from the daily management of your business, the sooner you can focus your attention on strategy; a critical step if you want to increase the value of your business.
So, how do you turn your management team into a value-driving force?
1. Make sure you’ve got the very best management team you can afford.
One of the simplest and best ways to determine the strength of your management team is to conduct a skills audit. The objective of this activity is to measure the ROI for each of your key players across a fairly broad cross-section of management and leadership skills, such as efficiency, communication, or general productivity. This should let you know if the skills you need, match the managers you have. Plus it will point out the areas in need of improvement.
By clearly understanding your managers’ strengths and weaknesses, you’ll be in a better position to offer the right kind of training to those who need it most, or if necessary, make more intelligent restructuring decisions.
2. Give your managers clear goals, in line with your overall objectives, and involve them in the goal setting process.
Have you clearly communicated a vision for the future of your business to your leadership team? Have you sat down with each of them to lay out a roadmap for how you expect your managers to achieve success? As the leader of your company, it’s your responsibility to clearly outline your expectations, and provide each manager with both the necessary guidance and an opportunity to contribute to your big picture objectives. This gives them a much better chance of meeting your expectations.
3. Get out of their way and let them do what you’re paying them to do.
After you’ve outlined a roadmap for their success, step back and give your managers room to deliver. If you want them to be proactive, it’s important that you interfere as little as possible. Instead, ask for regular reports so you can monitor their progress without stepping on their toes.
4. Develop a measuring mechanism to keep everyone focused on the task at hand.
Put in place a monitoring tool (commonly referred to as Key Performance Indicators) that regularly measures and documents the progress of your team, in terms of their defined goals. Make managers responsible for their own ongoing contributions. Then, periodically ask questions in reference to this document to help keep everyone accountable, motivated, and focused.
5. Allow your managers to share both financially and emotionally in the success of your operation.
People will behave more like owners if they are compensated more like owners. So consider compensating your team through profit sharing, bonus plans, company share programs and so forth. Do this and you will build a strong management team that is able to successfully run your business without your direct support. An environment such as this, adds, and continues to add, tremendous value to a business on an ongoing basis, whether or not selling is on your mind.
The implementation of an effective senior management team is a critical step in the maturing of a business. It might take a while to get there, but once achieved, it can take a business to a whole new level.