Build a Better Business Podcast

61 – Build Your Management Framework

3 Key Points in this Episode:

  1. Start by creating an organizational chart and document each role in the business.
  2. Next, create a profile for each role so you know exactly who should be working in each role.
  3. Finally, create an engagement system to help everyone who works for the business achieve professional and personal success.

Show Notes:

In today’s episode, I talk about how to create your management framework.

Your leadership provides you with the foundation to build your business upon but that is only the beginning of building a great business. Next, you need to put a framework in place that will help you manage the business as it takes shape and eventually begins to grow.

If you have been in business for some time you may find what we are about to discuss next a little strange.

If you are just developing a business idea and have not yet started a business, you will be more comfortable with this concept because your entire business is still in the theoretical stage.

We are going to build an organization chart for your business which is the first step in creating a management framework.

This may seem very strange if you are the only one in your business. You may be tempted to think, “I don’t need an organization chart yet, I am doing every job, it’s just me right now. I will do this later when I start hiring people.”

You may be tempted to think that, and you would be doing yourself a great disservice if you skip this part until you start hiring people.

Let me explain.

The structure of every business follows the same basic format:

CEO – Chief Executive Officer (Owner)

VP of Finance

Office Manager

Accounts Payable

Accounts Receivable

Bookkeeping

Purchasing

VP of Operations

Operations Manager

Senior Production Staff

Junior Production Staff

VP of Marketing

Marketing Manager

Web Designer

Social Media

Inbound Sales

Outbound Sales

Depending on what type of business you are operating you may have estimators, or receptionists, or some other position that is required on your organization chart but whatever these positions are they will fall under one of these three operational categories. Every business at its core is nothing more than three departments, finance, operations, and marketing, with a fourth department called leadership that oversees them.

If you are about to start a business, you will need to do all these jobs. If you have already started your business, documenting all the jobs you must do will give insight into why you are so tired all the time. Owning and running a business involves a tremendous amount of diverse work.

If you ever want to build a business that is predictable, that operates without you, that can scale, and that can be sold for a profit, in other words, if you ever want to build a great business, you must fill every one of these positions multiple times because as your business expands you will have to duplicate this organization chart in every future location.

Are you starting to appreciate why waiting until you have hired people to do this work is too late?

You must develop each one of these positions, one at a time, and when the position is completely systemized you can hire someone to do the job exactly as you designed that job to be done. This will free you up to work on the next position, and then the next position, and the next until your entire organization chart is filled with employees who have been shown WHY, WHAT, WHO, HOW, and WHEN to do everything they must do to be successful and produce a predictable result.

Where do you start?

Many people would start by developing a management team. They would start at the top and work down. Remember the top-down leadership that is so prevalent in so many businesses? The triangle with the employees at the base, the middle management above them, and the leader at the top of the triangle?

Remember how your leadership foundation is built from the bottom up instead?

Remember how the leader must provide the stability, must create the foundation, must show everyone in the business WHY, WHAT, WHO, HOW, and WHEN to do what they need to do to create a predictable result and keep the promises of the business?

This process of developing an organizational chart and then systemizing each position starts, not with leadership or even management, it starts with every entry-level position in each of the three operational departments.

We will develop the systems of your business in some of the following chapters but for right now you should start thinking about how your business is structured. What you name these departments and positions is up to you, but whatever you call them they must represent the finances of the business, the operations or customer fulfillment processes of the business, the marketing or lead generation and customer acquisition for the business.

Hire with a profile-first approach

Before you can develop systems for each position you need to consider another extremely key factor.

The ideal personality profile for each position.

Every human is subject to the limits of their inborn personality profile. Every human has certain roles that are an ideal match for them and other roles that are a terrible mismatch. Think back on the last job you absolutely loved, then remember the last job you absolutely hated. The profile for the job you loved probably was a good match for you, the profile for the job you hated may have been a total mismatch for you.

Let’s use the position of Outbound Sales as an example to demonstrate how this works.

Profile for an Outbound Sales Position: An outgoing personality that loves communicating with people, is motivated by interaction with people and is a result-driven person.

Now what if you hired someone that was not comfortable communicating with people, was motivated by minimizing interaction with others and was driven by comfort instead of achieving results?

It would be a disaster.

You would be frustrated because you would be constantly asking this individual to go and make sales calls and the employee would constantly be looking for ways to make the job fit their personality better and avoid making sales calls.

Every Position has an Ideal Personality Profile

Every position has a set of personality characteristics that perfectly fit the job.

If you define that set of perfect characteristics you can then incorporate them in your search criteria for people to fill the position.

When everyone in your team is in a role that matches their inborn personality characteristics it is amazing the impact it has on your culture, on your productivity, on employee retention, on customer satisfaction, and the list goes on and on.

How do you create a personality profile for each role?

How do you measure each person as you are screening for new employees?

There is a tremendous amount of psychology and technology behind doing this in a scientific way. We recommend that you use the Profile Performance System which I can provide you access to when the time is right.

If you try to do it on your own, it won’t be as accurate, but you can still avoid making a lot of hiring mistakes by doing research and going to www.jamieirvine.ca/profile for additional information.

Engagement for your employees through mentoring & coaching 

Perhaps one of the reasons you want to start your own business, or did start your own business, is because you were dissatisfied with the working environment at your last job.

Many entrepreneurs talk about the corporate culture as being “soulless”.

What is missing at many large corporations?

Why do so many people struggle at their jobs and even hate where they work and what they do?

Is it a deficiency in the employees or is it a widespread problem that large corporations inevitably experience simply because they are large?

It has been my experience that when a corporation becomes large the leadership group changes from an innovative passionate entrepreneurial-minded founder to a group of corporately trained managers.

Things that at one time would have been encouraged like imagination, creativity and innovation are now viewed by the managers in a negative light and discouraged because those kinds of ideas often threaten the status quo. Those kinds of ideas push the managers outside of the safety of the corporate mindset and are viewed as disruptive and even dangerous.

The only way to combat what we generally classify as a “corporate” way of managing is to create a fundamental system within the business when it is small to ensure that once it grows, once the business scales, it doesn’t lose its identity as an entrepreneurial-driven innovative business.

It is not impossible to change an existing business and to embrace this entrepreneurial mindset, but as my wife always says, “it is easier to build new than it is to renovate”. While your business is small you must build a system to protect the entrepreneurial mindset. You must create an environment for your employees now and in the future, that makes them want to work for your business, serve your customers, and fulfill your vision.

How do you do that?

Culture is important but engagement for employees goes deeper than just the cultural identity of your business. Remember that your employees are only interested in getting what they need from your business. If they can contribute to your grand vision and that makes the world a better place, then that is just “icing on the cake.”

It has been my experience that to keep your people engaged they must feel important. They must feel valued by the business. They must be in a position doing work that they are well suited to do and can be successful doing, both personally and professionally.

Keeping people engaged is a challenging aspect of managing your business.

Keeping people engaged when your business scales and grows is exponentially more difficult, even impossible if you don’t create a scalable engagement system to accomplish this result in a predictable way.

The Role of the Mentor  

The mentor is a critical function for all leaders and managers in your great business.

This starts with you as the only leader and then, as your business scales and grows, extends to the people who become managers within your business.

Think of the mentor and his apprentice.

Think of the years they spend together, working together, with the mentor teaching, the apprentice learning, trying, failing, learning more, trying again, and finally succeeding. Think of how the mentor feels as his apprentice becomes a master and then takes on their own apprentice.

Is the apprentice struggling with engagement?

Not at all. In fact, the apprentice is always pushing the mentor to teach them more, teach them faster, and the mentor patiently focuses the apprentice on the task at hand, all the time the apprentice is learning, even when the apprentice thinks they are not.

This is the environment that you must create within your business. It starts with you and your very first hire and extends to every hire after that. Eventually, as the business grows, the people you mentored will start mentoring new hires and the process becomes a self-replicating system.

The Role of the Coach

The mentor and the coach are both educators but with one main difference.

The mentor works with the apprentice, side by side they build, and when the project is complete they start working on the next project together.

The coach never plays the game with the players he coaches. The coach, like the mentor, teaches his team, trains the team, but never plays the game.

To achieve higher levels of engagement with your employees and increase your retention rates, you will need to develop a system for both mentoring and coaching your employees.

Often the mentoring is done primarily at the beginning when you are training the employee. Then as the employee learns the position they have been hired to do you can switch to a coaching role. You can observe their performance and give needed instruction, advice, commendation, and at times correction.

Engagement – Worth Every Effort

How much does it cost when an employee quits, and you must replace them?

How much does it cost in lost productivity?

How much does the training process cost when you must hire new people for the same position repeatedly?

Your profit can be dramatically affected by your retention rates and engagement levels of your employees. This is motivation enough to give this aspect of your business a great deal of attention. Yet, beyond just the cost, don’t you want your business to be a place where people come to work, totally engaged in achieving your vision, inspired to be better themselves, to contribute to delivering your promise to your customers?

Don’t you want your employees to consistently say, “this is the best place I have ever worked?”

That one sentiment is really the benchmark for success when it comes to engagement.

Managing your business is a critical component to building a great business and as the leader, it is up to you to create the environment that will allow all future people who work for your business to be put in a position that allows them to be successful. Your management framework combined with the leadership foundation will dictate how great your business can become.


This episode sponsored by:

Screen2Fit by Pro.file

If you are hiring a new employee, I highly recommend that you use the Screen2Fit recruitment platform by Pro.File.

FreeeUp

I use FreeeUp to find high-quality freelancers to help me run my business and you should as well.


Thank you for listening and I look forward to working with you soon.

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