Building a successful business is difficult. Early on, entrepreneurs are faced with liquidity challenges to invest in growth while remaining flexible and responsive. Survival is the focus, and business owners find themselves deep in the details of management decisions. As the business grows, new customers, products, channels and geographies exponentially increase the number and complexity of management decisions. While new employees are brought on to help, owners still typically find themselves immersed in day-to-day decision making.
The more the company matures, the more important it becomes for business owners to relinquish some control and let their team perform. But traversing the gap doesn’t have to be a leap of faith. An integrated set of strategic management behaviors can help a growing business establish a foundation that creates sustainable value and a culture that gets people enthusiastic about coming to work. While this is a process and won’t be accomplished overnight, there are basic steps owners and their management teams can take to get there:
Define clear strategic objectives and share them within the organization.
Highlight value drivers for meeting financial and operational goals. Assign owners who are accountable for each target or goal, and follow up to review their plans to deliver.
Delineate roles and responsibilities individuals will play/execute in the organization’s success.
Move from good to better to best:
- Good: Organizational charts illustrate roles, reporting relationships and spans of control.
- Better: Job descriptions summarize role expectations and standards for how work is performed.
- Best: Corporate strategy cascades to department- and individual-level objectives. Define roles in the overall corporate success and empower employees to build a plan for execution.
Understand the current state of the business.
Organizational capabilities must support strategic objectives. What resources does the business have or need to be successful? Understanding this will help prioritize investments to fill the people, process or technology gaps.
Measure progress and reward success.
Track key metrics to drive accountability, and reward those who positively impact business performance. Keep attainable targets in front of the team and watch them thrive. Aligning employee objectives with the company’s strategy drives the right behavior and creates a win-win culture.
Taking these straightforward steps to creating a value-focused culture can help:
- Deliver on strategic and financial objectives. Defining financial targets and a plan to achieve them is the starting point for sustainable value creation.
- Attract and retain good employees. People like to be challenged, respected and valued. A happy workforce will have buy-in and really care about business performance.
- Build a company less dependent on the owner. Owners can take a vacation, or handle family or other outside concerns without being interrupted by work or worrying about the business.
Change in any organization is hard; it requires a cooperative workforce to get it done. Every day owners face business challenges that need attention and require leadership, making it difficult to find the time to pull away from the details and focus on the bigger picture. Finding that time, though, could be the most valuable, both financially and personally, to drive real change in the business.
Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.