Icon Business Solutions discuss the role of management in business

Here is the latest article from Tano Rebora, our guest business writer from Icon Business Solutions.

Management in all business and organisational activities is defined in dictionaries as the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organising, staffing, leading or directing, and controlling an organisation (a group of one or more people or entities) or effort for the purpose of accomplishing a goal.

So there it is – people; goals and objectives; using available resources effectively, efficiently. Note that it does not say where (other than organisation or effort) so by implication, anywhere and at any level of human activity.

All ‘professional’ people immediately stand to attention and see the implications applied to business whilst rejecting that such notions exist in any other field.

Dictionary definitions continue by stating that the word derives from the latin ‘manu agere’ to ‘lead by the hand’ and this is at the base of management skills; it is about giving direction that is stronger than just a passing suggestion yet not an order and also implies that the person doing the leading knows where he is going and is going first, willingly, to where the follower is being lead. The leader is not asking the follower to do something he is not willing to do himself.

But let us move sideways for a second and leave fuzzy people ‘things’ to one side and let us consider the much harder, more concrete ‘business management’ first.

What do we mean by ‘business management’?

Well, if an enterprise is to be managed effectively and efficiently then at least the Board must know what the correct corporate vision and mission is, mustn’t it? Otherwise, if there is no understanding of what the business is to have achieved in a specific time period the chances of success are hugely diminished.

It is much easier when both are present because this can lead to planning achievable objectives in realistic times. It’s the point at which the ‘Executive’ strategic level manages the tactical to achieve long term aims.

Business Management – Goals and objectives

It stands to reason that, if there are reasonable vision and mission statements then good management dictates that appropriate, preferably numeric, objectives can be derived from them for the Managing Director/C.E.O./Owner to ‘own’ and be responsible for delivery in measurable timescales. This can then be cascaded down the organisation, irrespective of the depth and complexity of that organisation.

At a simple level there are three basic levels of hierarchy in any business – the operational, the ‘Management’ (tactical) and the Executive (strategic). For the ‘one man band’ – all three need to be considered and applied. Therein lies the basis of many company failures – but that’s for another time.

All three levels need to be accountable and all the objectives must funnel upwards and downwards to fulfil the success criteria for the business.

Setting the goals/objectives and measuring people on their achievement against them is at the heart of ‘business management’.

All different functions must be managed on this basis, as example:

Sales:

• Director: KPIs based on company revenue, company profit ; departmental profit; territory cover; Wins vs Losses; client satisfaction; team performance. All, as appropriate dependent on market, sector, high value vs low value, timescales and other factors.
• Manager: KPIs on team sales target; profit target (as above); client acquisition; territory coverage; client satisfaction. The above constraints apply.
• Salesperson: revenue, profit (if applicable), number of new Accounts

Marketing:

• Company/departmental/sector revenues; number of suspects and prospects created totally attributable; competitive positioning (wins/losses)
• Sub divisions of these depending on structure and responsibilities.

Operations/Production

• Company revenues and profit margins
• Number of units produced
• Efficiency of equipment and employee levels
• Health and Safety
• ‘Returns’

Other functions such as Financial/Legal and Human Resource should be similarly treated as should any sub-functions for example; Product Development, Product Marketing.

The above list is not complete and it is not intended to be. It is just an example of the sort of tangible, concrete objectives that can be measured.

There are tomes written on how to set these and Peter Mayer (Attitude is Everything) describes good objectives as being SMARTERS (Specific, Measurable, Attainable, Relevant, Ethical, Rewarded and Satisfying Strategic goals.). There are other words used for the acronym but I choose to finish on the last one for good reason – Satisfying Strategic goals.

Everything that everyone in any company does is focused on getting the business forward today (operational level), tomorrow (Management tactical) and in the future (Management Executive).

So, all employees now know what tune they are marching to at every level but how does anyone know how different people are performing, individually, departmentally and at company level to ensure company success?

People Management – Not so ‘fuzzy’ stuff, then ‘fuzzy’ stuff
Well, the answer to the above is – no-one does, unless there are proper Human Resource processes in support.

How many companies, again, at any level, have these? In my experience – very few.
Rarer indeed the ones that have the end to end processes that guarantee performance such as:

• Hatch: Recruitment -attracting the right people at the right time and the capacity to tell the difference in measurable ways (there you go- there’s a good SMARTERS objective for HR people already!).
• Batch: Appraisal – setting the correct objectives and regular meeting to match objectives achieved with those set out. In the process also identifying ‘high flyers’, succession planning (both measurable) as well as non-performers and documenting all for action etc.
• Dispatch: No easy way to put this one – but the actions taken must be, again, set against proper well documented situations, ethical and with respect for all individuals.

Well, that was non-fuzzy but what about fuzzy stuff?
Have you noticed that some people just manage to get more out of other people than others might do?

What do we call that? Leadership? Charisma? The innate or developed (there’s a question!) capacity to ‘lead by the hand’ (please re-read previous introduction).
People/Managers can spend a lifetime blithely managing by objectives and not totally understand how to get the best out of their people, always managing to make their own objectives without understanding how they can do more through their ‘fuzzy’ people management skills.

No matter how well the company may be doing and may be business managed these are the ones that, typically, make the best sales to the most loyal client base; may need less human resource in production to achieve best output; may hire or help hire the best people in the marketplace….the list is endless.

Oh and who measures them? They may well be managed by people who, let’s repeat here, people who ‘always manage to make their own objectives without understanding how they can do more’. Perhaps understanding this and hiring for ‘fuzzy’ traits is what makes good companies great.

From Maslow through Herzberg to Goleman and beyond there has been tremendous work done on people motivation through the years precisely focused on this.
Companies are made from the top down but without the right business and people management skills with the right processes they will never be successful.
So if any of the above resonates – act on it, for that is the role of management in business!

This article was written by Tano Rebora and was originally published on the Business Matters blog.

Tano offers free, no commitment Business Health Checks, which will guarantee companies with business building strategies upon request. To find out more about Icon, visit the website at https://www.iconbusinesssolutions.com or email Tano Rebora at tanorebora@iconbusinesssolutions.com