The demands on business owners and managers have grown exponentially in the last decade. The global credit crunch and resulting economic recession are just the latest of a series of challenges faced by business owners. Before we ever heard of sub-prime mortgages we had the aging population crisis, skills shortages, Generation Y, ever-changing government regulation and tax laws, new accounting standards, SARS, a ‘global war on terror’, rampant technology growth and information overload.
And do we still remember Y2K and the millennium bug?
It is no wonder that business owners and managers can feel overwhelmed. A lot has happened in the past decade.
So how do we face this oncoming recession?
One of the first human resource priorities for business owners and entrepreneurs is to assess their own capabilities and skill-sets. What are your strengths and weaknesses? What are the tasks you enjoy doing and are good at? And what are the tasks that you would rather someone else do? In times of crisis, people tend to focus their energy on the tasks they prefer. This gives them the greatest and most immediate satisfaction. These things are an island in a sea of turmoil.
Unfortunately, the unpopular tasks get delayed and deferred until they can wait no longer – and then they are rushed through and are done poorly. For some people, these tasks are the Business Activity Statements and Accounts that are done on the weekend before they are due. For others, it is the email newsletters that are left to the last minute. Some find debt collection a particularly onerous chore. And for most of us, dealing with customer complaints is something we would rather do later, if at all.
For many business owners and entrepreneurs, however, there is only one person they trust to do all these tasks – themself. Most people start out in business with a dream of getting more control of their lives and achieving a better work-life balance. Instead, they are working harder than ever – and their world can seem out of control!
How many business owners have had a relaxing four-week holiday in the last twelve months? And how many expect to take such a holiday during this next difficult year?
For these businesses (and their owners) to survive this rapidly changing economic environment intact, they just can’t continue to do everything by themselves. To be successful, they need to have an experienced team around them to provide the information, experience and support to meet these growing challenges. This team needs to be able to provide the experienced advice that is needed. They need to know how to handle a difficult economic environment. They need to be flexible. And they need to be affordable for the business. You need a Management Team.
Your 21st Century Management Team.
But how does a business owner or entrepreneur create such a management team? When should they start building this team? And how can they afford it, particularly in the very early stages of their business?
There are a number of strategies that can help business owners and entrepreneurs build a management team early on that is affordable and will help the strategic direction of the business.
First, you must understand why businesses can and do fail more often than they succeed.
- Some business owners have unrealistic or outdated expectations that can’t be met. If your business has an ambitious growth target that is no longer appropriate in a global slowdown, you need to realise it quick smart and take steps to mitigate the problem (eg cut costs). If your business relies on significant bank borrowings, you may be in for a nasty surprise if the bank reduces your loan facility.
- Others fail to recognise their personal strengths and weaknesses, and the latter destroys the business. For example, if you are not good at the book-keeping and never pay your suppliers on time, it will always catch up with you.
- Some business owners can’t delegate, so they ‘burn out’. You must work out what are your realistic and achievable business goals, list the business tasks you don’t like to do and then seek out talented individuals who can do these tasks.
Second, look at all the options available when building the team around you, and choose the most affordable and appropriate option. Remember, you don’t have to engage everyone in your team as full-time employees. This is often the most expensive approach.
What about exploring the use of a business coach, a mentor, a ‘virtual’ board of directors, contractors or even part-time employees? You don’t engage your experienced plumber, electrician or carpenter as full-time employees around the house when you need a project done. But if you rely on their advice, these people could be considered members of your house’s management team. Why don’t you consider your business in the same way?
In fact, many of the most experienced executives nowadays prefer not to be full-time employees. They are not looking for a master servant relationship. They provide their services on a consulting basis. These people enjoy the flexibility and independence of contracting – and have what is commonly termed a ‘portfolio’ career. They have a wide range of contemporary and relevant experience and provide businesses with a very flexible solution, as they are only paid when actively engaged. The business benefits since the oncosts and often onerous obligations of employment are removed.
Once you have decided on the skill-set your business needs, and the most appropriate way of engaging them, you need to find the way to keep them for the long term. This is particularly the case with employees. You never want to lose your best people. These people are fully trained, they know your business and its culture and they can take a long time to replace. Just paying more money often doesn’t work in the long term. The provision of training, mentoring, career support and flexible work practices are just some of the ideas to consider to excite your team and to keep it intact for the long term.
Whatever the stage in the business growth cycle, business owners and entrepreneurs must continually review their management teams. With many new and challenging issues facing business, including the economic crisis, the aging population and increased job portability across all demographics (not only Generation Y), your ability to attract, engage and retain your management team will be the key to your business’s survival and future success.
How does the team function in the current high-tech, high-churn environment? How confident are you that your team are ‘on the bus‘ and are not looking to get off at the first opportunity? And does the business have a management succession plan that strengthens its chances of survival if times get really tough?
There are thousands of management textbooks and training manuals for business owners and entrepreneurs. Most have been written by people whose formative influences and business experience dates back to the ’70s, ’80s and ’90s. The world has changed a lot since then and for the next generation – the successful 21st Century business owners and managers – many of the old ideas may simply no longer apply, particularly in the areas of management, team leadership and labour resources.
To keep ahead of the game in this challenging environment, you need the resources and people around you that are the most relevant in this 21st Century environment. Business owners, entrepreneurs and managers should always remember they are not alone – there is plenty of help available. Don’t be afraid to engage a management team. Always welcome fresh ideas. And never forget the many good reasons why you went into business in the first place.
Remember, there is no Magic bullet, just ‘intelligent management’.
Andrew Blunden has spent over 25 years assisting fast growth companies maximise their value in the Australian marketplace. In 2006, he founded Part Time Professionals, a company that supplies over 190 part-time executives, accountants and managers to growing companies throughout Australia.
A report from the team at Part Time Professionals has now been published for business owners, managers and entrepreneurs at www.21stcenturymanagement.com.au. This FREE report tackles all these issues and provides an easy-to-follow roadmap to build the best management team in your business.
Photo: Roby Ferrari (Flickr)