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

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