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10 keys to managing people

Thursday, 5 April 2012 | By Tom McKaskill and Michelle Hammond

feature-penguin-thumbFailure rates for early-stage ventures are reasonably high, but most fail because they lack the fundamentals of a good business. This includes people management.

 

In order to transform your start-up into a world-class company, you need to inspire your staff to share in your vision. As the saying goes, you’re only as good as the people around you.

 

This may sound relatively easy to achieve – you’ve got a great idea, so what’s not to get excited about? But in reality, staff expect more from their leader than passion.

 

They expect consistency, direction, fairness, and the list goes on.

 

Dr Tom McKaskill is a professor of entrepreneurship and has spent many years as a mentor and coach to a wide range of business ventures. Here are his top tips for managing people.

 

1. Develop strong values

 

The most effective way to run a business is for every person in the business to be able to predict what the right strategy is when faced with a situation or problem.

 

Not that you necessarily want everyone making decisions, but the fact that they all understand how the business will react, and what decision is likely to be made, adds a degree of stability and predictability to the business.

 

You should not underestimate the micro decisions that employees make every day. Whether they are advising a customer on a service delivery or working on a project, they are all making decisions.

 

What you want is a consistent approach to these interactions and decisions. That can only happen if the values underpinning the business are understood, agreed and widely implemented.

 

You can then have confidence that the right decisions are being made across the business.

 

2. Build teams, not islands

 

You need to think of your business like an automobile where every part has a function to play and where the whole is much better operationally than the parts.

 

You need to work to ensure that everyone is part of the team and not just an onlooker.

 

The role of the entrepreneur is both leader and visionary. You need to create an environment where everyone looks forward to the rewards that come from their combined success.

 

The reward for success can be as simple as achieving industry recognition or having done something outstanding.

 

But without something which pulls everyone together around a common purpose, it is very easy for individuals to focus on their own goals, often at the expense of others.

 

3. Make everyone accountable

 

Business goes more smoothly when everyone knows what their job is, what they are expected to do and what targets they are to meet.

 

The advantage of assigning responsibility, and thus accountability, all the way through the business is that you have certainty as to where decisions are supposed to be made.

 

The person responsible has to collect whatever information they need to make a reasoned decision and be prepared to defend the decision they make.

 

The same person should have the best data or best judgment on what will be the results of their actions in the forthcoming planning periods.

 

Whether it is sending out invoices, making deliveries or making sales, the individual responsible is the best person to suggest how to improve their activity and to predict their results.

 

4. Reward workers who have a go

 

What distinguishes entrepreneurial cultures is that they chase opportunities.

 

If you want your staff to be motivated to consider the opportunities, submit them for evaluation and then actively participate in doing something about them, you have to allow some to fail.

 

When that happens, the people who participated can’t be blamed or passed over. The fact that they were willing to step up and have a go should itself be recognised and rewarded.

 

What you want is lots of ideas coming forward, no matter how bizarre they might seem. Subject them to the usual opportunity evaluation tests but be proactive.

 

It is only by having a go that the successful ideas will survive and contribute to your business. Make sure you reward those who participate, whether their idea is successful or not.

 

5. Keep staff informed

 

Employees are not stupid and they can put isolated bits of information together to create a picture of the health of the business.

 

However, their interpretation of what is happening, and how you are dealing with the various issues facing the business, might be wildly wrong.

 

A more proactive culture informs employees so that everyone has a comprehensive picture of what is happening and an understanding of how you are dealing with pressures on the business.

 

The advantage of this approach is that there are no surprises, and individuals who have good ideas can come forward to assist in the strategy.

 

While there are risks, keeping people informed and involved is the better strategy.

 

6. Leave your ego at the door

 

The last thing you can afford is for anyone to have a big ego and think they are better than everyone else.

 

You need to avoid situations where any one person feels they have the only solution to a problem and are not open to advice, or keep everything to themselves in case others see a weakness or fault with their decision.

 

My advice has always been to employ people who can go beyond their personal issues and focus on the right thing to do for the business.

 

The last thing you need in business is for someone to make decisions purely on what is good for them at the possible expense of finding the right solution for the business as a whole.

 

You can only have meaningful conversations if individuals can fully contribute without feeling that others are judging them.

 

7. No one is indispensable

 

If you are lucky, you will have some employees who are unbelievably good. They are super productive, get on with everyone and never ask for more than they deserve.

 

Then one day they announce they are leaving – going back to school or moving interstate with their new spouse. You are devastated because you know how rare they are.

 

Then there are the great salespeople who close more than their fair share of deals. However, you discover that they have been putting in false expense claims or overpromising on sales. You have no choice but to fire them.

 

In both cases, you have lost someone who will be missed because of their outstanding contribution to the business. But the reality is that this will happen over and over again.

 

What we have to ensure is that we never lock ourselves into one person so much that the business cannot continue without them.

 

8. Beware the management fads

 

If you have been around for a while, you will have seen the next big thing come and go, leaving a lot of disappointed entrepreneurs in its wake.

 

Whether it is the secret to selling, recruiting, manufacturing, supply chain management or corporate strategy, there will always be the great breakthrough, usually based on a limited study but great penmanship.

 

For years now, I have been researching the principles of high-growth ventures. Almost without exception, I have come back to old and tried fundamentals. Why? Because they make sense.

 

They have wide applicability and they have strong validity over many decades. That is not to say that we don’t get useful insights through new techniques and processes, but they are never the whole story.

 

We still need a solid business model with good people who can execute on the business strategy.

 

9. Implement a zero-tolerance policy

 

As the boss, you set the limits for behavior. Whatever you tolerate or overlook becomes the boundary line for employee behavior.

 

Basically, you need to set a line over which people only cross if they wish to put their employment at risk.

 

Where you have someone who does cross that line, you must, as a matter of discipline and policy, come down on them hard and, in most cases, terminate their employment.

 

I would apply this policy to cheating, fraud, misappropriation of company resources, misrepresentation, bullying and any form of discrimination or harassment.

 

Someone who undermines the goodwill of the business, who creates disharmony or puts the business at risk, in my mind, has no place in the business.

 

10. Set the example

 

We have all heard the saying that the culture of an organisation comes from its leaders. That is certainly the case in every organisation I have belonged to.

 

The values of the leader determine the acceptable culture in the rest of the organisation. That being the case, you need to be especially sensitive to what you say and do.

 

Your behavior and decisions will convey meaning to the rest of the organisation about what you value and what they need to do if they want to be successful in your organisation.

 

Organisational culture grows over time from the shared experiences of those who work within it. While there may be stated values, the real ones are those which come from practice.

 

You need to show what you value by how you act yourself and in the decisions you take. What comes from the top permeates to the bottom.

 

Dr Tom McKaskill is a global serial entrepreneur, educator, author and angel investor. He is an authority on how entrepreneurs start, develop and harvest their ventures. Recently retired from the Richard Pratt Chair in Entrepreneurship at the Australian Graduate School of Entrepreneurship, Dr. McKaskill is the author of 20 books about entrepreneurialism.

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