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Ken Keller: How to become a better owner in five steps

Brain Food for Business People

Posted: April 6, 2010 10:11 p.m.
Updated: April 7, 2010 4:55 a.m.
 
Owners of small and mid-sized businesses are a different breed. These individuals are the risk-takers, idea people who launch and grow businesses. These kind of people are essential to a vibrant economy, because the majority of new jobs are created by small and mid-sized businesses.  

As inspiring and dynamic as these individuals may be, they have issues. Those issues surface in conversations with the people who work in organizations run by an entrepreneurial owner.  

Observational research suggests that employees have these concerns about owners: The owner is unfocused; has no plan; constantly changes the plan if one exists; either micromanages or is apathetic beyond reason; doesn’t fire the people who need to be fired soon enough; and isn’t decisive enough and does not provide enough praise or recognition for hard-working employees.  

Why would an owner want to become better? The short answer is that it will make him or her more money. The longer answer includes raising the engagement level of every employee, raising productivity, taking better care of current clients, improving the odds of adding not just more, but better clients, reducing costs and improving cash flow and profitability.

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

It starts with how a business owner does planning. Most owners usually find the process boring, a waste of time and unnecessary.

Whatever plan exists can be found between the ears and it is constantly being changed, sometimes minute by minute.

If the goal is to become a better owner, the first step is to create a written plan for the organization. The time period for the actual plan should be between one year and three years. Strategies, goals and tactics should be broken down quarter by quarter.

Having a written plan solves a number of issues, including a lack of focus; the constant changing of focus; and taking the plan from the owner’s head and putting it on paper so 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 the owner 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 many unimportant things that take place in any organization, everyone will be focused on the vital few concerns that will make the business more successful in both the short and long term.

The third step is that the owner must learn how to hold people accountable for achieving goals. This requires having essential one-on-one meetings to discuss progress toward objectives on a regular basis. Sometimes, these meetings may be uncomfortable because ample progress is not being made, and the topic of underperformance might need to be discussed.

Employees need to know there are consequences for not achieving goals, and owners need to back up words with deeds.

Having those difficult conversations may turn to making a very hard decision, which is to terminate a constant 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 whole organization suffers as a result.

When an owner does get around to terminating someone who is not doing what needs to be done, everyone 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 U.S. Marine Corps 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 “A person can fail many times, but isn’t a failure until someone else gets blamed.” A better owner begins with a long look in the mirror.

Change is difficult and it doesn’t happen overnight. If an owner wants to become better, wants a better organization, the five steps outlined above are a good place to start.

Ken Keller is president of Renaissance Executive Forums, which brings business owners together in facilitated peer advisory boards. His column reflects his own views and not necessarily those of The Signal. “Brain Food for Business People” appears Wednesdays in The Signal.

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