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Traditional management may not work in a small business

All of a sudden (not really) a small business owner finds himself with four employees. The first truth rises to the surface; a small business owner is not trained to be a business manager. Big businesses have the economies of scale and they can overcome individual deficiencies. In a small business success depends on the owner’s initiative and the teamwork performance of his staff.

A small business owner, who buys a book explaining traditional management style, and then tries to implement it, may find that he is doing more harm than good.

Small business owners, I find, have a tendency to micro-manage their employees and by doing so, actually impede their work output. Employees then    become afraid to make a decision, no matter how small, without the owner’s approval.  That sends the wrong message and delays or stops employees from using their own skills and knowledge to achieve the desired result.

This results in the dampening of individual creativity and team work. In addition, the owner takes on the additional burden of management instead of focusing on building the business.

I have seen small businesses with 8 to 10 employees, proudly display on a wall the organizational chart which includes the president (owner) a general manager, an assistant manager, a department head and finally a few employees, all of which are subjected to a ridiculous layer of management.  This same firm had three levels of meetings, the third being a general meeting with all employees.

During my interview session with the owner, the desire was to have us put together a new business and marketing plan and to guide the company in its growth. Unfortunately, the owner wanted only himself and the general manager to be involved in all the planning without disclosure to the rest of the staff.

My recommendations included my ability to visit individually with all the employees and then to develop the business and marketing plan with their “four person management team” and frequent updates with the rest of the employees.  I also said that we would have to revamp the current management philosophy of the firm as well as their current organizational chart, to a team achievement management style.

I know that this is going to be a difficult transition, especially for the owner and perhaps his general manager. Having to let go and to trust the employees to achieve the desired results  without micro-management will require a new mindset for the entire company as well as better training and communications within the company.

My challenge, when called in for some presentations, is to listen and then asked my prospective client why I was called if he has already decided what I am to do and how to do it.

The main ingredient of business success is the rest of the team.          Nick J. Petra CFP   

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