Key Management Strategies For Small Business Owners

Are you too busy fighting the alligators to clean the swamp? In other words, regarding management, are you so busy minding the details of your business that you seldom if ever have a chance to look at “the big picture,” about where you are heading, and how you are best going to get there? How do you know what to do each day to improve your company’s prospects for success if you are constantly “fighting the alligators?”

Famous American basketball player and coach John Wooden offered the following advice to his players:

“When you improve a little each day, eventually big things occur. Not tomorrow, not the next day, but eventually a big gain is made… and when it happens, it lasts.”

Irrespective of whether the economy is getting better or worse, there are always management opportunities to grow your company, especially if you have a well-developed strategy to take advantage of changing conditions. These efforts can be supported or hindered by the dynamic changes that are occurring in our markets, demographics, environment, technology, the internet, and consumer behavior.

The main purpose of this article is to stress the importance of rising above the daily demands of your company from time-to-time in order to survey the broader landscape of opportunities that are available for your company to grow.

Simply put, the main purpose of this article is to simply say:

STOP AND LOOK AROUND.

Management Strategies – Tips for “Cleaning the Swamp”

From a general perspective, many of us seem to be uncertain or cautious about what do we should do next to move our company forward. Do we maintain our cautious “status quo” approach, or start looking for new or changing opportunities? No matter what the economists predict about overall growth, we know small businesses have to be strategically-focused and highly creative if they want to keep cash in the bank and revenue coming in the door.

Following management strategies are some of the ways to stop a minute and think about cleaning the swamp:

• Focus on opportunities and success as well as challenges.
• Have regular meetings with your entire team for an hour, day , weekend or whatever is available to share, understand , and discuss goals, opportunities and challenges.
• Monitor and share your specific progress in those meetings. For example you might start with a one page presentation by each participant on their role, goals and opportunities. This will involve the team, provide some ideas for discussion and give everyone a better understanding of the total organization.
• Encourage out-of-the-box thinking and ideas and avoid normal day-to-day problem solving. For example you may develop solutions by better understanding underlying causes of issues rather than their characteristics.
• Encourage testing new ideas and scrapping ones that don’t work. One of the key recommendations of most great leaders is to recognize that you will make mistakes and focus on solving them rather than blaming someone.

Years ago, I was part of one marketing-focused organization in which management had regular meetings with all department heads. The best part of those meetings was frequently that the technical staff gained an understanding of the purpose of some the marketing complexity they endured and they also felt stimulated to develop and present their own specific programs to increase profits. The ability to both get away from life’s details AND bring the team together in a positive sharing setting made a world of difference once we all returned to our daily routines.

Specific Management Strategic Opportunities

While your efforts may be as open ended as you see fit, here are some common management issues facing companies:

Operations

Operations and logistics are frequently viewed as secondary functions that can be handled by someone else. However, in reality, they present a huge opportunity for a business to become more efficient and to differentiate itself. The key is maximizing forecasting, inventory control and distribution to maximize service, investment return, sales and profitability.

• Conduct a simple “SWOT” analysis (Strengths, Weaknesses, Opportunities, and Threats) to get a perspective on your business. The surprising aspect of this exercise is that we frequently take our strengths and opportunities for granted rather than maximizing them. For example, approaching key and repeat customers usually presents the greatest opportunity, lowest cost and most profitable source of additional sales.
• Many operations experts have long promoted that 80% of sales are with 20% of your products. However suppliers continue to proliferate styles, colors, sizes, models and features to presumably serve more customers and provide more features. In my view, the flexibility rule is a myth and the 80-20 rule rocks in business, marketing and our personal lives. We waste time, money, inventory dollars and frequently add confusion by adding complexity. One of my friends refers to this tendency as the “bright shiny stone syndrome,” where every new opportunity deserves top priority while the real core of the business is presumed to run itself untended.
• Do you really need to spend all that money? Can you work on less inventory, staff or marketing expenses? Are you reviewing your computer, programming and communications expenses to maximize, productivity, efficiency and cost?

Marketing and Sales

• Service is a key — While we always focus on product, marketing and finance, customer service is just as critical. Service goals start with a total commitment to providing consumers with a great quality product and making the experience enjoyable. Remember: “Let’s face it, anyone can put product in a store or pictures on the internet and attempt to sell it. It is the differences in service that frequently differentiates.”
• You must react to the marketing environment which is changing even faster today. Do you know what companies like Pinterest, Groupon, Kings Road, EBay, Amazon, Google, Apple, etc., are doing? Do you know what they are planning? For example Amazon will achieve about $ 70 billion in sales this year and Google $40 billion in marketing revenue. These tremendous levels of growth didn’t happen by accident, but by careful strategic planning and execution.
• Examine the mix of your business to focus on growing relationships with your ideal customers and products they support, and giving less marketing attention to declining customers and unprofitable products.
• Everyone is trying to stay competitive and many customers and suppliers will react to promotional opportunities. Examples include renegotiating leases, discounts from suppliers and incentives for growing your customer’s business. If you don’t ask you won’t know!!! Rebidding is usually a good exercise to understand your suppliers and their trends.

Understanding Trends and your business environment

• Join and contribute to networking groups. Put up a Twitter page and create interesting content to build a following. Update your website or raffle off a free lunch to anyone who puts his or her business card in your fishbowl. It’s all about putting yourself out there.
• One of the most significant opportunities for you may be understanding and reacting to demographics. While the country is simply getting older, more diverse, more ethnic, and more educated, there are also niches in the details that may spell opportunity for you and your company that may be overlooked by others. These changes will dramatically affect both who you target as customers and how you will serve them.
• The economy is changing, and your company has to change with it. Take whatever isn’t working and scrap it.
• If you haven’t looked at your business plan since you first wrote it several years ago, now may be the perfect time to dust it off and give it a good test to see what worked, what didn’t and what needs to change.
• Another suggestion is to simply test some new and sometimes simple ideas. Ask customers, resources and staff how to do things better. Attend a seminar or webinar, read a book, shop your competitor, or just visit an Apple store and try to figure out how you can generate just some of that business. These are all simple and easy to do.

Ultimately, It’s All About People

Today, it is all too easy to get caught up in analysis, reports, media and the sheer number of planning and running a business. In the midst of such “alligator-infested waters,” it’s easy for management to forget that at the end of the day, your business is all about people and human nature. It’s all about whether or not you offer the very best product or service to your customer at a fair price and with excellent service after the sale.

An easy, free and surprisingly effective effort in this regard is to simply say “Please,” “Thank you,” “How are you?” and (when appropriate) “I am sorry” more often. In today’s world, we often under-estimate the value and power of the personal touch.

When I talk to people thinking about starting a business, my experience has led me to focus on two distinct concepts critical to success: Passion and Reality. Passion is the dream, idea and mission of your business. Reality understands the basics of the business and the problems, limitations and constraints.

There are lots of good ideas. However, entrepreneurs need to constantly review measure and consider whether they are maximizing their execution. In particular we need to regularly evaluate balancing these two needs.

 

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