Business Owner Series: Part 1 of 9
How to develop a management team so you can step back from your business
Chris Broome – Chartered Financial Planner
Taking a step back from your business can be a daunting task. Trusting that you have the right management team in place will go some way to releasing some or all of the company reins.
Getting the right mix of people to complement and reinforce your business is therefore essential.
Having an effective and diligent management team will help you to create a more efficient and capable business.
To help you on your journey, we’ve listed some of the key areas you need to be looking at.
The role of your management team
A strong management team is particularly important if you want your business as a whole to grow and develop. Each member of a management team can concentrate on their own area of expertise. In addition, the business benefits from having its overall direction and goals viewed from different perspectives.
A review of your business should identify skills that are important to it and those skills that your current staff, including yourself, already possess. Some types of expertise might only be needed from time to time and it may be better to outsource as required. Ensure all roles and responsibilities are clear and that good communications structures are in place both formally (management meetings, briefings, progress reports) and informally (team building sessions, general feedback).
Building the dream team
In order to develop a successful management team, you should consider carrying out a SWOT analysis to identify what gaps there are between where the business is and where you would like it to go. You can then assess the fit of existing skills to business requirements and establish priorities for the acquisition of missing skills. Look to permanent staff recruitment and plan ahead where possible by recruiting for future positions and anticipating any prospective skills gaps.
Training and development
In developing a management team most people will need some help and training to be able to fulfil the new roles required of them – especially if they are being promoted from within an organisation.
As you delegate management responsibility and become more removed from the day-to-day feel of the organisation, you will need to have in place good systems to be able to monitor performance. Performance assessment can usually be divided into two parts – measurement and evaluation. Performance measurement concentrates on key performance indicators (KPIs), objective factors that can be clearly identified and measured, such as:
- sales figures
- production output
- financial performance
- machine downtime.
Performance and rewards
In addition performance measurement, all managers should be part of a formal appraisal system to evaluate personal development. An appraisal allows personal objectives to be discussed and relevant tasks and targets to be agreed on. An effective appraisal system should have four key stages:
- Set objectives
- Manage performance
- Carry out the appraisal
- Provide rewards/remedies
Incentives at a management level need not always be financially related and can be tailored to different sorts of success.
Please get in touch to discuss your business and the steps you can take to create long-term stability.
Next in the series – Part 2 of 9: What is management buy-out?
The next blog in the Business Owner Series looks at the steps involved in the management buy-out process, from putting together a proposal to transferring assets and liabilities. You can read it here.