Tag: business owners

I believe the most important factor in success is management

I am well aware of the downsides of management, or “over-management” as there is a point where all you are doing is managing. At some point this breaks down because someone has to do the work. Levels of bureaucracy that have built up over the last century have recently started to collapse, but management is still important. I don’t refer to management only as “supervision” or even as “leadership” but as “resource allocater”. By that I mean that management is more about measuring and reacting. In practice that means collecting information, understanding vision from leaders, crafting a plan of action, and then ensuring supervisors and production workers act appropriately. This method of management is at its very core what separates a hobby from a business. Happy is a plan implemented – a plan brought about and executed through great management.

Take two business owners as an example: the first business owner keeps mostly to himself, but expects his workers to know exactly what he wants and how to do it. When things go wrong he has no idea why and so his only response is to fire and replace staff who in his mind will do a better job. The second manager leads his staff with a clear vision, meets with them regularly, and makes small, iterative changes to craft his organization into the company he wants it to be. When his staff aren’t operating by his standards, they are given helpful feedback and training. At the end of the year, he’s got a loyal, well-trained staff all moving in the direction he set forth. Meanwhile the first manager is now contemplating more turnover to ‘finally’ get the staff he needs to do the job the way he wants it done. Which type of manager are you? Which type would you like to be?

While these traits and outcomes may seem obvious to the observer, they an be less so when the owner, manager, supervisor, and production worker are you or when all of them are the same person. How many solopreneurs do you think take the time to ‘meet with themselves’ to go over strategy and vision? How many take time to stop and review reports and other insightful information? And how many just spend their time working without any real sense of direction? What you’ll most likely find is that most people in this position pick one of those things to do 80% of the time. This means that roughly a third of business owners spend so much time thinking about their business that they hardly ever do any ‘work’. On the other hand, a third are people stuck in ‘analysis paralysis’ going over the data without a clear direction. It’s important to set your direction early on, do the work, then use the reporting time to periodically check to see how effective your work is moving you towards the goal. All three parts are necessary, but don’t let anyone go too long without doing the other. This is just good management.

How important is management, really?

Recently Steven Van Zandt from Bruce Springsteen’s East Street Band was on NPR’s Fresh Air and he stated that management was more important than talent. He said that his band was not the best musicians even on his block, but because of their management team they were able to become a commercial success. Now it is one thing to base a statement off your own experiences, but there is music manager named Lou Pearlman who had an uncanny ability to turn musical acts into cash cows. Regardless of how you feel about New Kids on the Block, N’SYNC, or the Backstreet Boys, their ability to make money seems to have more to do with Lou’s management formula than with available talent. In other words, those who know how to make money will continue to make money because they are active and intentional about their process. This is another way to describe management.

Take Donald Trump for example. One could easily argue that he is a great manager. Regardless of what you knew about his personal management style, you would intrinsically know that in order to keep an empire of hotels, resorts, and casinos in daily operation one would have to at the very least be an adequate manager. But consider the fact that Trump has made a fortune and ‘lost it all’ – only to turn around and build it right back up again, you begin to wonder if its not the man, but the system the man employs. It’s more than mindset, it’s a business model. Donald Trump knows how to make money a certain way. Think of this “way” as a function. If you knew that by simply putting time, money, and dedication into a validated function that the return would always be greater than the input, would you keep doing it? That’s what great managers do. They don’t spend time re-inventing new functions.

Consider the man who discovered a great treasure in a field and sold everything he had to buy this field. He didn’t say to himself, “If I sell everything I have I will use it to think of a way to turn it into a great treasure.” No! The great treasure already existed, it only required changing the way in which he managed his personal finances in order to obtain that great fortune. One might say that his greatest fortune was discovering the treasure in the first place, and I would say that this was but the first step in the three-step management process. If the man had not taken the time to set a direction and been walking that path (doing the work) he would have never been able to report the findings he had. You see, all three steps of management are necessary and useful for success. No one is more important than the other, but they are all required.

There is another story about a man who found a rather peculiar rock in his back stream and although it was slightly ugly, he thought it unique enough to place on his fireplace mantle. One day a visitor with some geology experience noticed the rock on his mantle and realized the true value of this find. It was in fact the largest diamond ever to be found in North America and that’s where we get the expression, “diamonds in your own backyard” (a variation of the Acres of Diamonds story). The moral of the story is that nearly everyone has something within their skill set, background, or location that will lead them to their own success. Most people are simply ‘diamonds in the rough’, but with the discipline of management to their own lives, they could be more successful.

Success itself is hard to define because of its relative nature. For example, you could decide success as where you are right now, but most people define it as something more or something better than where they currently are now. Management can help you achieve success (however that looks to you) because it will help you define what success looks like, ensure you do the work, and measure and monitor the results. However, the biggest obstacles when attempting to meet your goals are self-doubt, lack of accountability, and limited resources. This is why it’s so hard for solopreneurs to achieve success. When there is no one to report to, it’s easy to let yourself down. Realizing this is an issue is the first step, but ultimately you have to just do the work.

You may have heard that “No man is an island” or “behind every great man is a woman” or that most big companies were the result of two-man teams as co-founders (1,2,3), but why? What does a partner have to do with becoming a great company? It doesn’t take a great leap to realize that successful business owners have to have someone to bounce ideas off of, to keep themselves from veering off the initial path, to keep them accountable, and to share their achievements with. Even single founders have strong “number 2’s” or life partners to play the role of co-founder. Regardless, role of the owner(s) is to execute the strategy and ensure it stays on track. They are the ultimate managers of their business and their ability to manage effectively has more to do with the success of their business than their product, their location, or their customers.

Do not be afraid to manage yourself, your company, or your product lines. You are not wasting time or ‘building a bureaucracy’. You are building an internal business model for the success of the-way-you-do-business and only you can be the one to do it. You are the only one with your unique ‘backyard’. In that stream or in that field lies your treasure. It will not come easy, but the rewards will be great if you can learn to manage your business in a definable, repeatable way. For more ideas on how to do this, consider reading The E-Myth Revisited or Good to Great. Both are excellent books for those wanting to grow it manage large companies, but for solopreneurs, I recommend reading The 4-Hour Workweek. You might also like reading my post on customer development.