Principles of business management

Business culture

Managers and leaders determine the culture

It is important to remember that managers and leaders determine the entire culture of a business, even when they are not conscious of doing so. Typical examples include:

• time-keeping (if managers arrive late to work, so will their employees)
• lack of praise (if managers don’t use praise and encouragement often, neither will their employees)
• poor team culture (if managers don’t emphasize the importance of team, their employees will neither feel part of a team nor behave as if team is important)

Take a look in the mirror

If you either want to know how your employees are feeling or are concerned that the atmosphere and work ethic in your company do not feel right, the number one principle is to ask yourself how you are feeling.

If you are feeling unduly stressed, overworked, frustrated and working too many hours, the chances are that your employees are feeling very much the same. This of course means that if you want to change how they feel, you need to make changes in how you are working.

Vision and values

If you want your business to be a success and you want your employees to feel highly committed to your company, you need to keep communicating your vision to them (at least once a month). If you have a compelling vision, not only will your employees feel more committed to their work, but they will be more ready to cope with criticism and forgive you when you make mistakes. If you are not clear, what your vision is, please take a look at the section below on vision and values.

Taking on staff

Taking on staff is one of the biggest commitments a leader or manager makes. Here are some principles:

• it may sound rather harsh, but it is for everyone’s long-term benefit: be slow to hire and quick to fire
• in the early days, you may not be able to attract the perfect employee who has both the skills you need to get important tasks achieved and who can represent the values of your company. If you cannot find the perfect employee, in the early days it is better to employ someone who can get the tasks done efficiently, but in the longer term it is critical that you employ people who can represent the values of your company
• this means that you need to be aware that you will need to adjust both your staff and your employment criteria as your company grows

Team is everything

The long-term success of any company lies in the quality of the leadership and vision, finance, the quality of the product, good marketing and, very importantly, team-work. Many leaders only pay lip-service to team work since it is the nature of who they are that they deep-down often believe that they can do everything better themselves. Yet this fatal for two reasons: first it breeds a sense of insecurity into the employees and secondly it will lead to burn-out since the leader simply cannot do everything, especially as the company grows.

So, if team is so important, how can a good team be created?

• invest quality time in discovering the strengths and weaknesses of your team members, in particular with regards to their knowledge, skills, aspirations and motivations. There are well-know tools such as Belbin and Myers-Briggs that can help you with this important analysis.
• do everything you can to align or re-align your team member’s skills with the vision, values and requirements of your company
• hold regular, meaningful team meetings that give your employees a real sense of being a very significant member of your team
• never talk negatively about one team member to another since this breeds a culture of mistrust throughout the company
• provide opportunities for your team to get to know one another outside of the work environment
• be aware that if you ever put anything, however important it may be to you, before the above points, you are sending the message that the team is not that important to you. Actions always speak louder than words.

Work smart, not harder

One of the most common mistakes made by managers and leaders is to keep working more intensely and for longer hours as the stress increases. This is fatal, for many obvious reasons, such as the danger of burnout, but most importantly because it causes the manager to lose sight of what is going on in the company. Ways of working smarter, not harder have to be found, for example:

• take a radical look at your working day and jettison everything that is not important
• re-visit your company vision and check that you are not spending time doing things that do not, or no longer, line up with your vision
• audit your tasks into the four categories of urgent and important, urgent and not important, important and not urgent and not important and not urgent and plan your diary well in advance with this audit in mind
• look to delegate as much as you can to members of your team

Meetings, agendas and minutes

Meetings are essential in any organisation but you need to monitor whether or not they are serving any real purpose. If they are not, they should be dropped or radically changed. Every meeting, especially a regular meeting, should have a very clear purpose, not only to you, but also to your team. Then, in order to make its importance clear to your team, you should ensure the following:

• an agenda should be sent out in advance, where possible giving your team members the opportunity to contribute to it. The number of items should be clearly manageable and not overwhelming. There should also be at the beginning a brief review of the action points from the last meeting.
• items on the agenda should have a time-limit and a designated person responsible for them. There should also be an appointed  chair (not necessarily you as the manager but the person who can best chair a meeting in your team), a minute-taker and a time-keeper.
• The minutes should be brief and to the point with action points and a named person responsible for each action point and a deadline by when the item should be achieved. The minutes should be distributed promptly to everyone as soon as possible after the meeting.

Create a culture of encouragement and celebration

Almost all human beings work best in an environment of encouragement. It is therefore very important that you create a culture of encouragement. Criticism and honest feedback are of course essential, especially with colleagues who are not performing quite as well as they could. However, any negative feedback or constructive criticism should take place within the following parameters:

• do not communicate negative feedback in the heat of the moment
• take time to check that you have got your facts straight beyond you launch out
• never communicate negative feedback to the employee in front of other employees of a similar standing
• once you have introduced the theme of your feedback, give the employee ample opportunity to explain things from his/her angle first
• then couch your criticism in a very clear, factual structured way
• end by giving the employee an opportunity to ask any questions and with an encouraging comment about a more positive aspect of the employee’s work.

It is also best practice to offer employees regular appraisal, at least once a year. This should be done formally and with the outcome linked to professional development and, where possible and if appropriate, a pay increase. Apart from the fact that such a procedure will great benefit your company, it will also make it very attractive to other highly qualified and motivated professionals.

The future is always ten years younger than the age of your average customer

This may sound strange, but it is an important business maxim. The main challenge is that life moves on faster than we like to think. Many managers, including their friendship circle, are already at least forty years old, so when they think about how to develop their product, they think about what they would like. The reality is, however, by the time the product is on sale, several years have elapsed and in any case, the next generation of customers have already moved on to something different. So, the rule of thumb is, if you want to develop a new or existing product, find out what people at least ten years younger than your current average customer are looking for.

Always invest in younger people

This is important not only because of the reasons given in the paragraph above, but also because young people will keep your company feeling young and dynamic and it will make it attractive to young and old alike. Furthermore, amongst these up-and-coming employees you will most probably find the most loyal and talented future leaders of your company.

Nowadays, it is also possible to work with younger people by offering them a short to medium-term placement as part of their training/university degree. If you do this, please be aware that you will need to look after them properly and not to use them as cheap labour. Ideally, they should have a pre-arranged, formal training programme that includes time with you, professional development on the job, a mentor (not you) who looks after them pastorally and they should also work shorter hours than your paid staff so that they have time for other aspects of their personal and professional development.

 

Jettison everything you are doing that is not genuinely productive

Many run the danger of continuing to do things simply because that is the way that they have always been done or because they have seen others doing things in a certain way. Please be aware that a strategy that works for a very similar company to yours may not work for your company at all. Resist the temptation to copy. Focus on your USP(s).

If you want to see something you’ve never seen before, you are going to have to do something that you have never done before.

Carry out a regular SWOT analysis

Life is very busy and very quickly unimportant things begin to feel like genuine priorities and we lose sight of the main goal. Therefore it is good practice to carry out a regular SWOT analysis, looking with a very critical eye at your company’s and you team’s Strengths, Weaknesses, Opportunities and Threats. Once you have done so, take appropriate action in any relevant areas.

Marketing

The world is changing fast all the time and the marketing that worked five years ago probably won’t work today. Right now the two most successful marketing strategies for most companies are internet presence and word-of-mouth recommendation. This means that, whatever else you might be doing, the following are critical:

• when you google your product or area of the market, how high up the Google pages do you come? It makes complete sense to give everything you can to getting yourself to the top of that list.
• think creatively about as many ways as you can to increase the possibility of your product being recommended from person-to-person. Can you use an app, social media or even financial incentives to improve on your current situation?
• the above two bullet points should have an effect on your use of other media. For example, very few potential customers will read a press release but many will read an interesting story about a customer who has seen success or something interesting happening as a result of using your product.

 

Consider inviting coach or adviser into your company

The kind of advice available here and elsewhere can truly help your company to grow and to move successfully into the future. However, it is often very difficult to apply these principles on your own and to your own situation. It is therefore much more effective to invite an independent consultant or coach into your company in order to do this very important work for you. Sadly, it rarely comes cheap, but it will most certainly pay off, especially if you are able to find a good consultant.

How do you measure success?

This is one of the most difficult things for any manager or leader to do, no matter whether you are one of the biggest, most lucrative and famous companies in the world or whether you are a three-year-old start-up that is still borrowing more money than it is making.

Obviously, there are the very obvious criteria such net profit, increase in market share, growth in production, and so on, but there are some very grey areas where it can feel impossible to make any objective evaluation. Some examples of the latter include:

• will our current generous investment in research ever pay off?
• does our attendance at trade fairs bring in any significant business?
• is our customer service record doing us more harm than good?
• was our last management consultant worth what we paid for him/her?

Whereas it is theoretically possible to measure such things over a period of time using spreadsheets and so on, often such questions can be better answered by the so-called gut feeling of any good manager or leader. Hence, knowing yourself and being confident in your leadership will so often be more important than having statistical answers to the above questions. The chances are, if you are clear about who you are and what your vision is, you will simply know, deep-down, whether the research is worth it, the trade fair is a waste of time, the customer service is damaging the company’s reputation and that the consultant made a significant impact on your company’s biggest challenges.

What is more, as you show others that you know the answers to these questions and that you are confident in your own leadership, such issues often become self-fulfilling prophecies. It is your job to make it happen, and as you do, others will follow.

Vision and values

Vision is about how you see the future. It is not your mission statement, which is something quite different. A clear and inspiring vision is critically important to you and your company in every way. It is therefore worth investing time in being sure about what your vision is. Of course, a vision alone is not enough. You need to be clear about your values too since a vision will ensure that others will join you but values will determine whether they will stay with you. Then, of course, you need a great team whose effectiveness is greater than the sum of its parts. You will also need to be clear about which vehicles you invest your precious resources into in order to make your vision become a reality. If you think about it, these things alone, not a large bank balance, have enabled individual leaders and managers to grow the most successful businesses in the world.

Articulating your vision

It is a good principle to be able to articulate your vision in the following formats:

• one short sentence that sums it up (this often ends up as part of your company logo)
• a three-minute summary that explains the vision in a little more detail
• a thirty-minute summary that you could give, say, as a presentation to a new audience.

If you are unable to do this already and you are finding the management of your company to be a real challenge, then you have probably just made a very significant discovery!

Articulating your values

It is important also to be clear about your values. Most companies have about five core values, and the most important thing about values is that they should permeate absolutely everything that you do. It is also unlikely that your values will change much over the longer term.

Articulating your vehicles

Vehicles are the action plans, tasks or projects that you and your company will need to focus on in order to take you from A to B. These vehicles have to be carefully monitored and may need to change over time. Most companies have about five vehicles. If you have more than five, not only will they become difficult to monitor,  but it might be an indication that you are trying to be all things to all people instead of focusing on your unique vision and USP(s).

Engaging your team

Finally, you need to ensure that your team is properly deployed. Ideally, they should not only leave and breathe the vision and live out in the values, but they should also be primarily engaged in the vehicles. Many companies employ one key team member to be responsible for each vehicle. This in turn makes team meetings more effective and manageable.

Once again, it is unlikely that you will be able to work out and articulate your vision, values and vehicles on your own. Bringing in a good consultant to help you achieve this will be a very worth-while investment. Even if you discover that you have been doing pretty much everything wrong, it’s much better to find that out now and to change course that to spend the coming decades moving in the wrong direction. At the end of the day, to put it rather crudely, who wants to spend his life arranging the deck chairs on the Titanic?