Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

February 16, 2011

How to Set Up a Collective Organization

Filed under: Growth Management — Mike Van Horn @ 5:41 pm

Asked by Dasha Bushmakin in LinkedIn

mvh answer. I belonged to an artists’ collective once, years ago. I was the potter. (I have a photo of myself inside a kiln with shoulder length hair.) When times were good, things worked fine. But when a crisis hit, it essentially fell apart; we had no way to make the quick decisions needed. Collective decision making didn’t work well. People argued while we went off the cliff.

The collective of artists needs to be the board of directors: create the vision and basic strategy, spell out the policies. Then turn it over to a real manager–whether one of the members or someone hired from outside–and keep hands off day-to-day decisions. The board sets goals and policy, the manager executes. This way, one competent person responds quickly to whatever arises.

The board gives guidance and feedback in pre-arranged ways, and if the manager doesn’t do the job you want, then replace ’em. This works out best for everybody. The artists get to be artists and not managers (which they probably detest having to do). And the business is run according to their broad wishes.”

February 15, 2011

Tighten Up Your Growth Team

Filed under: Growth Management — Tags: , , , — Mike Van Horn @ 12:21 am

“I do what it takes, even if I must work 70 or 80 hours a week. Why don’t my managers do the same?” (Question from T on “Ask Mike.”)

mvh answer. It’s hard to find someone willing to work as hard as you are to grow your business. It’s not their baby. But maybe working long hours isn’t the key thing.

For you to expand your business, you must be able to entrust your current business to your top people. Your top managers must buy into your vision, hold to your values. They must understand the heart of your business. They must put their heart and talent into it, and be willing to go to the mat for it. When the stuff hits the fan, they must stay there till the fan gets cleaned up.

Their commitment may not equate to the number of hours they work. What really is the most important to you? Here’s what I think is most important:
— Work 110% when they are there. Be there when needed, especially the crunch times. Set days off and vacations around these.
— Excellence and competence in every action. They keep an eye out for the little details that need to be handled.
— Customer satisfaction is #1. And connecting with customers.
— Pay attention to the numbers and to the hours worked by the staff.

Your managers must exemplify these, and also ensure that their subordinates do so as well.

For this to work:
— You must have the right people in each job.
— They must be trained; you must tell them what you expect, and give them feedback and correction.
— You must have measurable performance standards, and they must be held accountable. You must hone your skills at managing managers.
— Their incentives must reward the most important things you want them to do.

If they don’t measure up, you must be willing to replace them.

However, sometimes you have a strong person who is in the wrong job. Could you redefine their job so they can excel? Assign the parts they don’t excel at to someone else.

But don’t let yourself be held back by their limitations. Insist on having people whose excellence will help you reach for the stars.

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