What to: Do, Delegate, Outsource
May 20th, 2010
Copyright © 2010 Integrated Profitability TM
The owner/manager of a small business only has so much time in a day to do everything that is needed for the company to survive and, hopefully, thrive.
As hinted at last week, nobody can do everything. To paraphrase Abraham Lincoln:
● You can do everything some of the time
● You can do some things all the time
● But you can’t do everything all the time
Owner/managers who try to do everything all the time eventually:
● Burn themselves out
● Do everything less well than possible or even desirable
● Restrict the growth of the company to their own, self-imposed, time and quality constraints
Owner/managers need to put all the activities required * to run their companies into three categories:
1. Do
These are strategic activities; the ones that suit your knowledge, skill, and experience. Allows you to keep focus on the big picture, to keep your finger on the health of the business.
2. Delegate
These are more tactical; frequently those that are process related or procedural in nature. They can also be those activities that require knowledge, skill, and experience that you don’t have in sufficient quantity or quality: activities that others do better than you.
3. Outsource
These tasks have similar characteristics to those that you delegate, with the added feature that an outside company has built their business model on performing exactly those activities and they can do them more effectively and cost-efficiently than you or your staff, at the same or better quality and same or less risk.
The more efficiently and effectively work is done, the better opportunity for growing profitability.
Bill
William A. Stong
Email: william.a.stong@gmail.com
SBF&P # 65
Telephone: 925-202-6244
Copyright © 2010 Integrated Profitability TM
Footnote:
*: There is a fourth category: activities that DON’T need to be done. These can be hard to spot. Basically, though, if regulations don’t require an activity, it doesn’t do anything for profitability, and/or it isn’t something you should morally be doing; then it’s probably not necessary.
Defining Management
May 13th, 2010
Copyright © 2010 Integrated Profitability TM
For small businesses, what’s a good definition of management? Or, put another way, what are the most important attributes of an owner who is the management of a small business?
● Knowing the business
This runs the gamut from what’s the product/service, how it’s produced & delivered, who’s the clientele, how is profit generated (one’s profit dynamics), and what is the market doing
● Vision
Knowing where and what the business is today; AND where it is going. As long as the business is successful, “where it is going” is never really reached. It gets bigger and better as the market continually changes, but it always is in the future. As soon as one milestone is reached, there should always be further ones on the horizon.
● Delegation
As John Donne said:
“No man is an island, entire of itself,…”
Likewise, no single person can run everything about a business—especially one that is growing. An essential characteristic of management is knowing WHAT to delegate and then to delegate that to the best people.
● Keeping track
A good manager delegates responsibilities to others. At the same time, that manager needs to keep track of everything that is going on—well, not everything since that would be way too much detail.
A reporting mechanism that continually feeds the most critical information on the health of the business, however, is needed. This means identifying and reporting “key indicators” that drive the success, or failure, of the business.
Like a spider, management must have a superbly sensitive web of information to know everything of importance that is going on. The earlier one knows of something, whether good or bad, the more time there is to act. The first and second characteristics, knowledge and vision, should be sufficient to allow such a reporting network to be created.
● Managing
Personally, I prefer the word “leading” but both are necessary to ensure that the wheels of the business are in fact working well. An integral part of management is ensuring that responsibility and accountability are embraced by everyone who works for, or with, the company.
What have I missed?
Bill
William A. Stong
Email: william.a.stong@gmail.com
SBF&P # 64
Telephone: 925-202-6244
Copyright © 2010 Integrated Profitability TM
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