Business leaders are decision makers

When you’re in business, the most important thing to do is to make decisions, which means taking a risk. Sitting on the sideline will get you nowhere.

Here’s some things to consider: do you pride yourself on making instant decisions,and believe that sitting down and thinking a problem through is a total waste of time?
Making decisions this way, you believe, enables you to get on to the next problem – and there are always problems, you can never get away from them, they never stop.
Well, consider this: could it be that these incessant problems arise from the snap decisions on which you pride yourself?
John Arnold says that problem solving is a skill, a process with a beginning, where you identify and analyse the problem; a middle, where you consider a variety of solutions; and an end, where you implement your decision, and follow up and evaluate the results. To shoot-from-the-hip, tackling problems methodically and objectively may seem painful and a time-wasting exercise. However, in the long run, carefully defining and analysing problems actually saves time.

Isn’t nipping trouble in the bud the easiest way of resolving it?
Ideally your antenna should be tuned so you’re alert to potential problems. And you’re right to avoid the temptation of ignoring symptoms because they won’t go away and they’ll erupt, eventually.
A wise person does watch for those early-warning symptoms and heed their message. Arnold says that you should think of the time you lost a valued employee: when she handed in her notice, you were shocked to the core. Later, when you recovered from your hurt, your annoyance, your concern about whether you would find someone as good to replace her, little things started niggling your brain. Absenteeism marring her previously perfect attendance record; her recent penchant for cynicism; the way she had become slightly withdrawn. John Arnold says that if you had been alert to these symptoms, you may have been able to address the problem before losing this talented team member.
Experts like Arnold say that the data is always there, whether in employee problems, production problems, supplier problems, computer problems, customer problems. He advises people to read reports that a computer churns out and to look and listen to what is going on in your environment.
During the identification process, he advises that you monitor yourself to ensure you consider only relevant facts; inestimable amounts of time can be lost examining irrelevant facts. He says another time-wasting trap is seeking out additional facts when those that are already available paint a complete picture.

How do I work through to a decision?
After identifying the problem, you need to decide the end result you want: that is, the outcome you desire after you take appropriate action.
Arnold says to help you clearly establish your criteria, divide them into ‘musts’ and ‘wants.’ For example: your current computer system has to be either replaced or upgraded in order to install certain software essential for improving the efficiency of your business. Your ‘must’ list will include your absolute budget limit for the project and the essential features necessary for your computer to run the software. Your ‘want’ list will include all the features you would like to have in that computer system.

Once I’ve worked out a problem how do I solve it?
You can’t remedy a problem until you uncover what caused it, so you must now determine its cause. Remember: symptoms are the results of problems. Arnold says that focusing on symptoms won’t solve the real problem, all they do is alert you to the fact that a problem exists.
He says that analysis is the painstaking “sit down and think it through, examine it from every angle” aspect that many of us prefer to skip. Yet taking the time to assemble the facts and obtain input from everyone involved can save you a great deal of trial and error in formulating an effective solution.
Avoid the temptation to jump to conclusions about the cause of the problem, or settling for the first remedial action that pops into your mind.
So Arnold advises that you:
1. Analyse the symptoms.
2. Work out the likely causes of the symptoms.
3. Examine those causes to ascertain if they are indeed the root cause of the problem.

Using the example of that key staff member you lost: for months, or years, she never took a sick day. The first day she calls in sick, everyone is in a state of shock. A month later, she is absent for two days – unheard of! Over the next six months, she has several more single days off.
You didn’t take a great deal of notice because, although you were surprised at her absences, the amount of time she was taking off wasn’t really out of hand. You assumed that she, like half the population of the country, was catching every cold and ‘flu doing the rounds that season.
20/20 hindsight tells you that you were wrong to jump to those conclusions.
Arnold says that if you had taken the time to analyse her absenteeism, you may have come up with several other causes:

  • Impaired immune system. (Why? Stress, overwork?).
  • Relationship or family problems, at home or work.
  • Unhappy in job: lack of promotion prospects, no new challenges, boredom.
  • Attending interviews for other jobs.

Taking into account those other symptoms – her new tendency to be cynical and withdrawn – the alarm bells should have jangled a warning in your brain, prompting you to investigate the cause of those symptoms, find the problem, and take remedial action. You may have been able to retain her services.

How do I find the right solution?
To find the solution that will best achieve your objectives, you need to come up with several possible solutions, even though only one may be effective in the long run.
Arnold says that generating ideas demands that you switch off your logical, left-brain thinking, and rev up your creative, right-brain thinking. He says that brainstorming does this: you can brainstorm alone, or involve others who may be able to offer valuable input.
Arnold identifies five rules for successful brainstorming:
1. Don’t judge any idea – either positively or negatively – because seemingly crazy ideas can spark practical ones through the process of cross-fertilisation.
2. Go for quantity rather than quality of ideas. Just let them flow – it doesn’t matter how wild or unworkable they appear.
3. Don’t constrain your thinking. Allow your thoughts to freewheel, to travel in all different directions.
4. Write the ideas down because they can dissipate if not captured immediately. If you are in a group, use a board or flip chart so that everyone can see them; if you are alone, a notebook is fine.
5. Don’t give up the moment you hit a block and the ideas stop coming; hang in there for a couple of minutes until they start again. Only when you experience the third dry spell should you stop.

Now you can pass judgment on those ideas, weeding out those that are unsuitable. Problem solving now metamorphoses into decision-making. Keep in mind that a solution is rarely perfect: inevitably, there will be some negatives. However, Arnold says that asking these six questions will help evaluate each idea, eliminate the ones that are unworkable, and arrive at the solution that will have minimal negative consequences.
1. Will it achieve the desired outcome?
Strike out any ideas that don’t meet the criteria set out in your ‘must’ list.
2. What are the financial and resource costs of implementing this idea?
Delete any ideas that would demand more than your budget or that staffing would allow.
3. If you choose this idea, will it impact on other employees or departments?
Make sure you have covered all contingencies, and that your decision won’t create a precedent that may have undesirable repercussions later on.
4. Will implementing this idea create other problems?
Be sure that by solving one problem, you are not setting off a domino effect of others.
5. What could go wrong if I went with this idea?
Decide how serious it would be, and what steps you could take to lessen the effects.
6. Will this solution be readily accepted by employees/customers/suppliers/financiers?
Consider their objections and how you can sell the idea to overcome their reluctance.
When you have chosen the most suitable solution, commit yourself to working with it until it succeeds.

Once I’ve made a decision how do I put it in place?
A little more time is needed to plan the implementation of your decision. You must first decide how, what, when, and who does it. What you need to do is to assume the role of devil’s advocate and think about what can go wrong, how you’d recognise potential problems, what damage-control actions you can take, and how you’d recover if the worst-case scenario did occur.
Few decisions are made in isolation. If your decisions affect others, make sure that you talk to them regularly. Keep the lines of communication open throughout the decision-making and implementation process. Answer any questions that they might have truthfully and thoughtfully. This is particularly important when dealing with employees: by seeking their input, communicating with them each step of the way, you have a much greater chance of gaining their co-operation and making the solution work. When you regularly talk with your staff you can also help them overcome any resistance they might have to change. It’s best to remember that most decisions mean disruption of familiar routines. You’ll also need to engage your motivational skills to sell your decision to employees, to inspire them to accept it and make it work.

Anything to do after it’s implemented?
Never just implement a solution and leave its success in the lap of the gods! Things will probably go wrong: that’s not being negative, just practical. And the more people involved, the more chance of hiccups.
Regularly check in to see that things are running smoothly, according to your plan. Doing this will highlight errors or problems before they get out of hand. Talk to everyone involved to find out how the new procedure is working, whether it has improved efficiency, if more training is needed, if they are aware of any potential problems.
After you have allowed sufficient time for your decision to bed down, evaluate the results. Has the solution achieved the desired outcome – the objectives you set at the very beginning of the problem-solving process?
If your plan did not achieve those objectives, find out why. Decide what corrective action you should take. The important thing is to look closely at any failures, highlight where you went wrong, what errors you or others made that can be avoided in the future. Seek input from others about what went wrong, why it did not work. Solicit their advice about how things can be improved.
Arnold says to review the seven-step problem-solving process you used to see if you made errors of judgment. Perhaps you did not spend enough time on one of the steps – or even omitted it completely?
If your plan was successful – congratulate yourself! However, do take the time to look at precisely why it was successful so that you can use those ideas or methods in the future.

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Think like a manager

Think like a manager
Managing a small business demands that you develop not only a whole new set of skills, but also a completely different way of using existing skills.

You are responsible for everything: setting it up, getting it established in the marketplace, growing it, employing staff and moulding them into effective, empowered team members who will support you in achieving your goals and objectives.

The first principle for improving your management skills is to identify areas where your performance is not up to scratch. Once you know your weak areas, you can start working to improve them: read magazines like Grow Your Business, buy self-improvement books on the specific subject, find a mentor who can help you, attend seminars or courses.

Consider your performance in the following areas of effective management.

Staff motivation
As a manager, you’re responsible for creating a happy, fulfilling, challenging work environment and keeping your staff motivated. Motivation is the ‘enabler’ that inspires your employees to willingly do what you want them to do, embracing your goals as their own. In turn, the confidence that flows from employees’ increased sense of accomplishment fires greater drive and incentive to give their best.

Employees crave managers who can assist them to enjoy, and derive satisfaction from, their jobs. A manager who sincerely believes that most people a) are not inherently lazy and b) do not like being lethargic and bored, and also understand that their role is to channel their team’s energies into an acceptable work performance, has a head start to becoming a top motivator.

While numerous theories about motivation have been formulated through the years, the tools of motivation can be distilled into two basic types:

Tools of maintenance
The practical tools that maintain rather than inspire employees’ efforts on the job. They include salary, fringe benefits, job security, working conditions, company policy and administration, status, and management competence.

Tools of satisfaction
These are the less-tangible tools that inspire employees to greater achievement. They include recognition, the work itself, achievement, advancement, additional responsibility, and personal growth. Research shows that the last factor is so important that employees often accept a lower salary in exchange for the opportunity of growth.

While it’s essential to get the maintenance tools right in order to satisfy basic needs, the majority of your motivational efforts should focus on tools of satisfaction.
Praise, feedback and open, free communication are the primary motivational keys in a small business.

Be generous with feedback and sincere with praise. Routinely thanking employees for their daily efforts is essential, but it is especially important to recognise extra effort, as people need this individual recognition and boost to their self-esteem.

Recognition not given for work ‘above and beyond’ has an extremely de-motivating effect that leaves employees wondering why they bothered – and next time, they won’t!

Be imaginative so that praise never becomes mechanical, and personalise it by making specific mention of the action you are praising. Sometimes public praise is appropriate, at other times a personal handwritten note or even a token gift is warranted.

Encourage open, honest, two-way communication with your staff in an atmosphere of trust. Talk to them about how they are doing, their progress, problems that may be evident. When you need to discuss a shortfall in performance, use the opportunity for coaching.

Get the message out
If you choose to enhance just one set of skills, make it your communication skills. Even if your overall management skills are superb, poor communication ability can result in less than optimal performance.

Good managers keep their staff informed, knowing that open sharing of information leads to empowered people. The more clearly you detail your expectations, goals and objectives, the more concisely you give instructions for each task and explain the reasons for doing it.

The more feedback you provide about completed tasks, then the greater the chance that employees will meet performance requirements and expectations, and the less chance there’ll be of serious mistakes arising from misinterpretations.

Plan of attack
Many managers get so caught up in the day-to-day running of their business that they find they have no time to spend in forward planning. Big mistake: lack of planning makes it almost impossible to achieve business goals, which puts your business’ future at risk.

Ideally, your basic planning tool should be the business plan you prepared when you set up your business. Keep this plan alive and evolving: conduct a major review at the end of each financial year, comparing results against estimates, analysing the differences to identify where you’ve fallen down and where you’ve done better than predicted, and determine – in both instances – how you can further improve performance.
Measure your performance against your mission statement to ensure the two remain aligned.

Prepare a SWOT analysis (strengths, weaknesses, opportunities and threats) and write up a plan to build on your strengths, address your weaknesses, capitalise on opportunities and address threats.

Update your plan for the coming financial year by preparing new sales, expense, profit and cash flow budgets for the entire year, and also broken down month by month.

Each month, compare your actual financial results with your budgeted figures. This lets you identify potential problems such as poor sales performance or expense blowouts and nip them in the bud before they get out of hand and negatively impact your business.

With each goal you achieve, set a new one so that you are constantly stretching your own and your staff’s abilities.
If your business starts moving ahead more quickly than you anticipated, more detailed planning becomes critical to ensure you can sustain that growth and your cash flow.

It’s also important to have five and 10-year plans in place to help you structure long-term growth strategies such as expansion through branch offices, e-commerce, diversification; increases in staff numbers; creating new jobs and reallocating tasks within existing jobs to make better use of the employee skills.

When you talk growth, inevitably the question of finance will come up: any bank manager will tell you that they like organisations that use their business plans as an operational tool. A dog-eared, annotated, coffee-stained business plan is always looked on more favourably than a pristine document clearly produced to impress.

A manager needs vision
A man whose greatest claim to fame was that he was a good encyclopaedia salesman has become the guru of small business owners, writing the greatest selling small book of all time called The E-Myth.

Michael Gerber said the biggest mistake made by a small business owner is to believe that his or her business is different to every other business.

“Many business owners are simply technicians and not true entrepreneurs,” he argues. “Technicians see their business as a job but it should be a product of an entrepreneur.”

The argument runs that as a consequence the technicians, be they hairdressers, consultants, retailers or manufacturers spend most of their time working in their business, where on the other hand, entrepreneurs work on their business.

Gerber says the starting point for creating a successful business is to look to the future, then look back at your life. “You need a retroactive view of your life as if you are at your own funeral,” he says. “You need to create a vision of your business and your related life and be happy with it.”

Implementing systems throughout your business creates the opportunity for the entrepreneur to work on the business.
“The technician is work-centric, the manager is systems-centric and the entrepreneur is vision centric,” Gerber insists.

The bottom line is that becoming managerial and implementing systems creates the time to work on the vision for the business. “Vision is the most critical thing,” Gerber says. “The vision will determine whether you are really going to be successful.”

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Leaders need clear goals and vision

Goals and vision
Having answers to the most important questions to determine the success of your business should be your key aspiration. But I reckon knowing the right questions to ask is more important. After all, you can always pay an expert to help you.

Give me money – but happiness too
There’s a business owner in South East Queensland who wanted to ramp up his business and he was asked what he wanted to get out of being in business. He came up with the typical response of money – but when drilled down into the issue, he had happiness as the end play. What a softie!
After a bit more Q & A, he finally linked a materialistic hook to his happiness dream. That gave him a chance to then connect his big life goal to what is sometimes called a BMG or big measurable goal.

What’s your BMG?
A BMG needs to be thought about and, inevitably, has to be put into words. Experts insist that dreams and goals need to be put into print and dated, so you have something to shoot for in the future. You need to picture it! Visualisation types would have you see it happening everyday until it gets out of your head and become a reality.
Aussie breast stroker, Leisel Jones, would have gold at Beijing as her written down goal while Russell Crowe, more than likely, would have his newly-acquired Rabbitohs winning the competition within three years.

This is your vision
Of course, this is all about the vision thing which should show what your business looks like. This creates a target and keeps you committed to the goal.
Okay, that’s enough of dream-land; let’s get back into the land of the living and business.
(It’s good to dream but we should as, Ali G would advise: “Keep it real!”)

Make it come true
Here are questions to help weave your dream.
o What do you sell? And how might that change as you grow?
o How big are you right now? You can measure yourself on indicators such as sales, profit, business value and employees.
o What’s your current business growth? You can use sales, profits or even goods and services sold.
o How many business locations can you see in the future?
o How important are you in the market and where do you aspire to be in the future?
o How long do you need to create the vision? Some businesses shoot for a 10-year plan while others like five years, or even shorter.
o How do you compete now and what will you have to do to make it happen? This goes to the heart of how you make your BMG come true.

It takes two
Peter Drucker, the great US business mind, gave us the ultimate lesson that business is essentially made up of two things – innovation and marketing.
It’s simple, but spot on: innovate to give yourself an edge, then market the living daylights out of it. Even use innovation again to market smart (and even cheaply) to double ‘wow’ the process.
On this subject, you need a plan, which has a purple cow ‘wow’ factor.

The colour purple
Another Yank, marketing guru, Seth Godin, says you have to make your business like a purple cow!
His story says when we go driving in the country, the first cow is a blast and will thrill young children, in particular. However, after 30 minutes, cows become a bore and that’s what happens to many of our businesses, with everyone out there with predicable marketing messages.
A purple cow would really grab a bored traveller’s attention! And that’s what you have to drum up to make BMGs come true.

All tints and shades of purple!
But you don’t only need to purple up your marketing. Why not go long on the colour purple?
Take the colour to your products, your employees’ customer service and workplace practices, the look of the business, the efficiency of the operations, etc.
Remember, everything you do in business becomes advertising if a customer sees it – so don’t tolerate anything connected to your business being second-rate.

Look at me!
A great question to make a dream come true is to continually ask: what can I do to stand out from the crowd of competitors I’m up against?
So what do you have to do? Well, try completing this template, which shows you how to put your goal into words:
“In five years time, we will sell ‘x’ products/services, worth over $’y’ million out of ‘z’ locations. We will be seen as the best business in the industry and our reputation will be the benchmark for all our competitors. However, we will never be complacent.”

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