Management

In our first editorial, which appeared in the last issue, we summarized the “focus points” of Driving Business Results, the first of which was “management.” We will explore management more fully in this issue.

The MONEY Business

Management must clearly understand that, regardless of what business it is in, it is in “The MONEY Business.” Whether a for-profit, a nonprofit, a sports franchise or a branch of the military, it is always about the MONEY. The organization continues to exist and pursue its mission if it is able to attract, secure, or earn at least enough MONEY to cover its operating expenses. MONEY is the fuel that an organization “burns” as it operates.

Profit and Cash Flow

These are the primary measures of MONEY for the business, therefore Management must understand that these are the primary objectives —to earn a profit and generate cash. Everything the business does—every program, key initiative, investment, etc.—must be focused on or “linkable to” driving profit and cash flow.

Responsibility

Management must understand that it is fully responsible for the results of the business. Poor business results cannot be blamed on competitors, the government, the economy, the weather, the employees, etc. When things are not going well, the first place management needs to look is in the mirror. That is where the problem is.

Alignment

Management must be aligned, period. There can be only one plan and it must be “owned” by every single member of management. Each manager must personally buy into “making the plan come true”. A key to driving this management alignment, of course, is making sure that all members are invited to participate in the shaping of the plan. All voices need to be heard, all options evaluated. Vigorous debate is encouraged. In the end, however —there is only one plan—and each manager is expected to work hard to make the Plan successful. No spectators. No “I told you so(s).”

Decision Making

Many times I have seen small businesses grow to what I call the “tipping point,” the point at which the owner or top manager cannot stay on top of all the issues and make all the key decisions, and then the performance of the business begins to decline because the rest of management is not equipped to “make decisions”. Managers must be expected to make decisions – to gather the facts, solicit inputs, weigh the pros and cons and “lay it all on the line”. People who cannot do this, particularly after a degree of attempted development, cannot serve as managers.

Process

Superior business results will be tough to achieve if the business does not employ an effective “Management Process”. By this I mean “who in management comes together and how often, to review what facts and data as to the operating status of the business and make key decisions.” We suggest a weekly management process with the “Management Whole Brain” (all key functions represented, all the players required to make key decisions) in attendance, utilizing a screen of key metrics (the subject of a future editorial). The keys to effective management— The MONEY Business, Responsibility, Alignment, Decision- Making and Process. Employ them and your business will have a better chance of “getting results.”

This entry was posted on Wednesday, March 26th, 2008 at 6:30 pm and is filed under Archives - Apr-Jun 2008. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.