Five Steps to being a Better Business Owner

blog | December 29, 2011 - 11:37am | By Ken Keller

Owners of businesses are a different breed. These individuals are the risk takers and idea people. This kind of person is essential to a vibrant economy because the majority of new jobs are created by small and mid-size businesses.

Inspiring and dynamic, these folks have issues. Those issues surface in conversations with the people that work in entrepreneurial organizations.

Employees have concerns about owners: unfocused, no written plan, constantly changes the plan if it exists, either micromanages or is apathetic and unwilling to quickly fire the people that need to be let go, isn’t decisive enough and does not praise or recognize hard working employees enough.

Why should an owner want to become better? It will make them more money. A longer answer includes raising the engagement level of employees, increasing productivity, better client care, improving the odds to add not just more but better clients, cost reductions and cash flow and profitability improvements.

How does an owner become better? There are five steps to the process.

The first step is to create a written plan for the organization. The time period for the actual plan should at a minimum be one year and preferably for three years, with strategies, goals and tactics broken down quarter by quarter.

Having a written plan solves a number of issues – a lack of focus, the constant changing of focus, and taking the plan from the owners’ head and putting it on paper so that details and concepts are not forgotten. The plan should be shared with others who help execute the plan.

A written plan is merely a starting point in the movement toward success. The second step is to determine what in the plan is important enough to be measured. The rationale is that some things are more important than others and it is the responsibility of ownership to determine the vital few things that require measurement and monitoring in order to achieve success.

Determining the vital factors solves the issue of micromanagement of employees. Instead of focusing on the unimportant things that take place in any organization, everyone will be focused on the vital few that will make the business more successful both short and long term.

The third step is holding people accountable for achieving goals. This requires having one-on-one meetings discussing progress towards objectives on a regular basis. These meetings may be uncomfortable because ample progress is not being made and the topic of underperformance will be discussed. Employees need to know that there are consequences for not achieving goals and owners need to back up words with deeds.

Having those difficult conversations may, at some point, turn to making a very hard decision which is to terminate an underperformer. This is the fourth step owners must learn in order to become better. Many owners go to great lengths to avoid having critical conversations that may lead to letting people go. The entire organization suffers as a result.

When an owner does get around to terminating someone who is not doing what needs to be done, everyone else wonders what took so long. The answer is that the owner does not like letting people go and delayed doing the obvious.

The fifth step for an owner is to get out of the way of people. Owners being owners, the natural instinct is to jump right into a problem, challenge, or opportunity and start barking orders like a drill sergeant.

When this takes place top performers wonder why they are on the payroll; after all, haven’t they been told what the vital performance factors are that they are responsible for achieving? The owner interfering surfaces two issues: a lack of trust and an inaccurate job description.

It has been said that “a person can fail many times, but isn’t a failure until someone else gets blamed.” Being a better owner begins with a long look in the mirror.

Change is difficult and it doesn’t happen overnight. Wherever an owner is on the spectrum of company longevity, if the owner wants to have a better business, the five steps outlined above are a good place to start.

About the Author

Ken Keller

President of Star Business Consulting, Inc.

Ken Keller is president of Star Business Consulting, Inc., a company that works with coachable growth oriented business owners, addressing challenges, opportunities, problems and situations faced when leading a growing, profitable enterprise. He can be reached at (661) 645- 7086 or e-mail KenKeller@SBCglobal.net.

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