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The Formula for Business

Thursday, October 8th, 2020

Quite a lot of my time is spent helping business owners develop their management team. In a small business, my client may have had limited management training and the potential managers even less – so they are coming from a long way back in terms of becoming capable and accountable managers.

The effort is worthwhile. Not only are the people concerned loyal and passionate about the product but it avoids the huge risk of hiring senior people from outside the company. Managers from larger businesses in particular can be fish out of water when they move to a more senior position in a smaller business, with disappointment on both sides the result.

This approach requires some simple and repeatable method to develop management skills that can be applied quickly to free up the business owner’s time (usually, the biggest constraint on growth). The approach I have developed uses business processes as “units of delegation”.

Each process to be delegated has a clear start point or trigger and a single output or result. It can be large (like Marketing) or small (like Invoicing). It will have a cost, an average lead or cycle time, a balance, stock or backlog, and defects. These concepts are easy to explain (or draw) and easy to measure. This makes them easy to delegate and monitor.

The point is, every process in every business can be described (and so managed) in exactly these terms. Using this approach doesn’t teach a manager how to manage one process – it teaches them how to manage any process.

In this way you gove them a formula for business.

Of course, the full set of management skills are far wider and deeper than this – but any useful concept, from motivation to return on investment, utilisation to margin, can be related to this simple model as and when required.

If you’d like to know more about applying this to your business then register for one of our events.

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