Management

Management Principles

By November 10, 2017 No Comments

Most small businesses rely on their owner’s strengths and day-to-day management presence to get by. I’ve been one of the worst offenders I know, but my awareness of this tendency gives me a chance to beat it with the right systems. This is one area of my leadership I intend to perfect.

I’ve had it both ways and seen the benefit of getting it right a few times. While ownership presence is effective at times when the CEO can be involved in all things, it doesn’t empower management to run the company without them. The objective of most company owners or CEOs is to have a team in place that can run and grow the company without them. That’s the dream. The same goes for sales organizations. Does the team have the systems in place to succeed without the presence, personality or leadership of the President or CEO? Really, you either have this in place or you don’t.

So, how do you get it in place? First of all, it isn’t complicated; however, like many simple things, it takes discipline to create the system and use it. Part of the solution to creating an empowered management team is to develop a set of written principles to operate within. Business and management gets a lot simpler when everyone knows the rules to the game. Unlike a set of goals, “principles” are more like roadsigns to point everyone in the right direction towards the goals. Below are the written management principles I hold my own team accountable to. You are welcome to borrow from if you like. Keep in mind, while so many of them seem so obvious and basic, it is usually the lack of fundamentals in practice which are the greatest opportunity for improvement in a company.

MANAGEMENT PRINCIPLES:

The business exists to earn the best possible return on investment for its shareholders.

Managementís primary objective is to create a customer–at a profit–and keep them.

Management will attract, recruit & retain people who can get the best results for the company at a competitive salary.

Management will staff the company at a level that equals $200K-$300K in annual revenue per FTE.

Management will operate the business at no less than a 15% net profit margin.

Management will constantly seek ways to improve their results and master their professional occupation.

Management will ensure all vendors & suppliers are shopped annually to ensure the company is receiving the best possible balance of price, service and quality.

Management will outsource any job function which can be performed equally as well remotely at a significantly reduced cost.

Management must be able to do far more selling & building relationships with key customers and prospects than day-to-day managing. If ìmanagingî becomes a primary activity then we need stronger people in place.

Management will foster a high performance results-oriented environment in the company.

Management will encourage focus, teamwork, productivity, attention to detail & competitiveness at all times.

Management will know their competitor’s strengths and weaknesses.

Management will know their own strengths and weaknesses.

Management will formulate a plan to complete, execute it, and constantly improve the strategy to beat the competition.

Winning is the objective. Winning is the fun we seek in the business.

Once you document your own set of management principles, you can share them with your team and begin to hold them accountable to following them. Unlike goals, they are not all pass/fail oriented. With written principles in place, the guidance of the company is understood, accepted and corrections can be made with less resistance and surprise. If you come up with any useful principles you’d like to share, please do. Use the comments feature below.