Writen by Joe Love
Most small businesses fail within the first three years because of a lack of management on the part of the owner. Most people who start a business love the excitement of the start-up phase but don't understand that you must have a plan and provide direction for the business.
The success of any business depends on people. You can't build and grow a business without people. You have to take the time to hire good people and help them set goals. You have to be able to manage, motivate, and lead employees, which is something most business owners don't know how to do. Employees today are more educated, experienced, and knowledgeable than ever before and they won't work for a business that has a hardball style of management.
One of the first important keys to building a successful business is to put in a system that is flexibile. You cannot keep people pigeonholed in organizational boxes. Your business will succeed or fail based on how you manipulate and sometimes circumvent cut-and-dried rules and regulations. The success of your business will depend on how flexible you are in managing people.
If you're flexible, your management system won't be a system. Rules and regulations won't be set in stone. They'll be guidelines. You need this freedom to provide excellent customer service. For example, if you've promised to ship a customer's order the same day but the new order system won't let you ship it until tomorrow, you circumvent the system and ship it today.
There are two types of employees, those who care and those who don't. Break the rules for those who care. For example, if your employee policy calls for two week paid vacation and one of your good employees has a family emergency, you give him or her the time they need and not charge it to their vacation time.
On the other hand it is important to be inflexible when it comes to ethics and principles. And especially on things such as expense controls, quality, working hours, and substance abuse.
Today's employees are complex, frustrating, unpredictable, and potentially rewarding in a big way. They are your number one asset in today's highly competitive business world. A flexible management style and flexible employees, then, are strengths that can help your business grow and prosper.
The best framework is only as good as the people that oversee it which is why to be successful you must have good people. You must constantly search for the best people. But once you have good people it's important that you're patient. Even the best people don't become superstars overnight. They require time to develop, mature, and learn.
When you're looking for a good employee, you can get a good indication of how he or she will perform based on how he or she performed in the past. Trust yesterday's actions, not today's words. And always look for those people who embrace change. Resistance in the ranks of top management impedes growth and destroys opportunity.
Once you have assembled a team for you business make sure they are compatible. They must agree on the company's goals and that a cohesive team is worth working for. Your employees must be able to work in a group and leverage their skills by working with others. Always look for team spirit.
If your business is growing slowly, find and develop superstars from within your business. If you're growing rapidly, find them outside. And always pay your best people extraordinarily well and help them solve their problems.
As the business owner it is your responsibility to provide the vision, mission, and goals for the business. Your vision needs to be broad and say where the company will be in five or ten years. And not just in sales of product, but in distribution, markets, manufacturing capability, and anything else you think will ensure your company's survival and growth. Put your vision in writing for your employees. They deserve to know where they're headed.
The mission for your business is what gives direction to your vision. It's a plan of action that has to be understood and implemented by the entire team. That is why you need to involve every person in your business to help develop the mission. Involvement paves the way for commitment.
A good mission provides focus, defines direction, differentiates you from the competition, and communicates your niche. Put the mission on the walls of your business, in manuals, and memos. Then set company, department, and performance goals that will achieve your company's mission.
Empowerment by itself isn't enough, you must establish a culture that encourages accountability, allows for mistakes, and welcomes change. But you need the right employees for this culture to work. Empowerment won't turn inferior employees into superior ones, but it can turn good ones into great ones. Besides, you'll find that the best people like empowerment because it allows them to contribute to their fullest.
Empowerment starts with your own heart. If you don't truly feel that employees can or should be empowered, they won't be. Begin by letting people help make decisions, set goals, define roles, and assist in setting missions and strategies. People need to be given a voice before they'll accept the responsibility of empowerment.
Employees also need to understand the business. They must share your vision, responsibilities, and even your financial statements. And consider sharing equity. You may have heard the old story that people don't want the reins if they don't know the horse.
Most business owners have problem focusing. Many of them waste time focusing on jobs that someone else in the business can do better. Many businesses offer too many products and services. They often try to provide the fastest delivery and the best quality at the lowest prices. Just as the owner can't be all things to the business, the business can't be all things to the marketplace.
To manage your business successfully you must learn to give your undivided attention to tasks, meetings, and conversations. You must make good choices for yourself and for your company and limit activities to those you can and have time to achieve. You must be able to prioritize long and short-term projects and learn to say no. You must understand that concentration is a cultural issue. If you can't focus neither will your employees.
It is important to understand that it doesn't matter what you think or believe. What matters is what your employees perceive you think or believe. If they perceive you don't care about their problems, then they won't care about yours. If they perceive that quality is not important to you, it won't be important to them. If they perceive you believe customers are trouble, they'll treat them poorly.
Anytime you communicate with your employees, prepare your words carefully. Always hear your words from their perspective.
Business owners cannot escape the 80-20 rule which shows how hard it is to avoid putting in so much time for meager results. This rule states that 80 percent of your profits come from 20 percent of your customers. 80 percent of your output comes from 20 percent of your employees. 80 percent of your people problems come from 20 percent of the people. 80 percent of the sales come from 20 percent of the sales force. 80 percent of the headaches come from 20 percent of the responsibilities. And 80 percent of the your success comes from 20 percent of your efforts.
The 80-20 rule both helps and reveals problem areas. On the one hand, you know to take good care of your top 20 percent of your customers or employees. On the other hand, it means you must work to improve the productivity of the rest of the work force. Or cater to the other 80 percent of customers more efficiently.
There is never just one reason for success or failure. If your business is a success, it's because you've hired right, focused, made a good product, provided excellent service, and planned well.
Plan, prioritize, and pay attention to detail. Hold people accountable. Refuse to be satisfied. Everything matters, big things, little things, and in-between things. Knowing this, "rule of many reasons" is the key to managing your business successfully.
Copyright©2005 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.
Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many of America's largest corporations, on the subjects of leadership, self-esteem, goals, achievement, and success psychology.
Reach Joe at: joe@jlmandassociates.com
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