Once a business grows into the $3 million to 5 million revenue range, or has about 30 to 50 employees, it needs to start developing more formal practices for managing the people and the work of the organization. At this size, there is too much at stake to have the work and people of the company not properly coordinated, or not adequately managed through a standardized set of organizational practices.

In today’s rapidly shifting marketplace, the basics do not get done because there is less time to do them. Under conditions of rapid change and stress, companies, like individuals, tend to chase the immediate rather than the important. The trick to surviving and thriving today as a business is to find more effective and rapid ways to give quality attention to the basic practices of management while still keeping the business going day to day.

Five management basics build your business’s foundation, so that your company can grow and prosper. These five basics act as control levers that allow management to ensure that the business is operating successfully. They also help your company stay ahead in today’s world of more rapid economic change, and increasing company and industry complexity.

1. Defining Company Purpose and Getting Everyone On Board

First, define your company’s purpose and get people to participate fully in that purpose. If staff members are unclear or unsure of the business’s "reason for being," or do not personally connect with the owners’ aspirations for, and vision of the business, then they may lack crucial knowledge about, and personal drive and enthusiasm for the company. All staff need to fully understand and relate to what business the company is in, what excellence they need to be striving for, and what’s important for company success, so that their energy will be focused and their day to day decisions will be sound.

2. Redesigning Business Processes through Interdepartmental Collaboration

Second, you must guide and facilitate the design and implementation of business operational processes that accomplish the core activities of the business. Well organizing and coordinating work inputs (labor, materials, methods and technology) and transforming them into valuable outputs (quality products and services) contributes to a company’s profitability, and thus its survival.

Often, companies get inefficient, stuck, or even paralyzed, when organizational departments become more focused on their own area’s goals and priorities, protecting their own territory, resources, budgets and egos, than on collaborating to ensure that key processes are properly functioning. Impermeable psychological walls can get raised between company areas. This creates an "us-against-them" mentality, causing time, energy and resources to get wasted in interdepartmental wrangling, rather than in creating the sound processes (and related policies, procedures and systems) that best serve the customer, make the organization’s work efficient, and the company more profitable.

3. Using Information as the Lifeblood of the Business

Third, develop sound systems and methods for collecting, sorting, analyzing and disseminating information. Every business needs to operate with information, both from outside of and from within the company. Without it, the organization would be operating blindly. The critical question that needs to be addressed by management is "what information is important to whom and when, and how should they be getting it in order to inform their business decision making?"

4. Generating Performance and Commitment from both Individuals and Teams

Fourth, work with staff members to build their commitment to their job goals, as well as obtain their best job performance. Because of today’s higher customer demands and a faster-changing marketplace, owners/executives must learn to pass down greater work responsibility and decision-making authority to staff members on day to day issues. You must engage people’s hearts and minds. The best needs to be brought forth from everyone if a business is to succeed in today's challenging marketplace. As speaker and author Harvey Mackay says, "The boat won’t go if everyone doesn’t row in the same direction." Maximizing individual and team performance through employee involvement, performance management and performance improvement will yield dividends for any organization.

5. Developing a Capable, Cohesive Management Team

Finally, create an effective management team who act well on behalf of the owner/entrepreneur. It is uncommon to see an independent business owner/entrepreneur who is great at delegation and top-management team building. Most independent business owners tend to be sales, marketing or product-development oriented (or young and insufficiently experienced), therefore often lacking the skills in managing and mentoring key people. For a business to grow much beyond $5-7 million (or 50-75 people), an owner/entrepreneur must be able to develop capable lieutenants who can operate parts of the business relatively autonomously. Usually, day to day business management and staff development can be more easily delegated while the owner/entrepreneur holds onto business planning, business financing and other longer-term, business capacity-building activities. 

Focus on priority management practice areas and set goals for change and improvement. Also consider making these critical management practice areas regular agenda items in your off-site management and planning meetings. This is an excellent way to keep the conversation of company management alive and advancing. Continual attention to these five management practices will help your company maintain and develop itself internally for the long run.


Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .