Business Coaching Blog

How effective is your Management Team?

Saturday, March 21st, 2015

Why is it critical for an SME to develop an effective management team?

• As SMEs grow it becomes more difficult for the founder(s) to run the business on their own – they need to find ways to involve other people in defining business vision and strategy
• Delegation means managing through objectives and key performance indicators (KPIs) and this requires both a shared vision and a management forum to review performance and decide actions
• You will almost always arrive at better decisions when you discuss them and arrive at a joint view
• Often potential acquirers put a high value on the quality and performance of the management team – after all, you won’t be there any more

What is a management team for?

The management team:

• Creates the organisation’s vision
• Defines the most effective strategy to achieve this
• Sets priorities for resources and actions (the plan)
• Reviews performance against plan
• Decides and assigns actions to keep the organisation on track

What factors make a management team effective?

Members of effective management teams:

• Think in terms of the whole organisation first and their own function second
• Move easily between detail (tactical) and overview (strategic) perspectives
• Accept responsibility for overall organisational performance and expect challenge from others on their own functional areas

High-performance teams* demonstrate

• Individual accountability based on
• Commitment to the goals of the team gained through
• Challenge and constructive conflict enabled by
• Trust between members

How can you develop an effective management team?

• Design the process so that desired behaviours are encouraged and development of an effective team becomes an explicit activity
  • Make explicit the purpose and functioning of the Management Team and the responsibilities of its members
• Change the performance of individual members by providing feedback and coaching.  In SMEs this may be problematic
  • The senior management layer may consist largely of supervisor-level staff who have little or no management experience and may also consider that they didn’t sign up to run the business but to carry out a functional role
  • The leader is probably the main shareholder and the person accustomed to making all the decisions and so may not naturally draw out or encourage other’s input
• Be aware of the way you lead.  Nothing in this document is advocating democracy or abdication of responsibility for the final decision but effective leaders:
  • Change their leadership style to suit the circumstances
  • Develop other leaders, not more followers
• Change the membership.  This is usually the MD’s direct reports by default so poor performance in the Management Team may have wider ramifications for the future growth of your business