When I consult with remodeling companies, I often recommend the same action to cure many of their ills. And often they report major improvements when they follow this relatively simple advice. The problem? Many companies have outgrown their management structure, even though they have staff on board who could help lead, if they were mobilized.
As companies grow they need a more formal governing system, one that's multi-level. It's no longer enough to run the company by chatting as you pass another person's desk or writing employees e-mails. You need more consistent and reliable ways to communicate and make decisions. You also need high-level strategic planning and monitoring that you may not have needed earlier in your company's development. And you need to involve more of your staff in decision making.
Michael Gerber, author of The E-Myth, writes of the critical need to not only work in your company but to work on the company as well. Gerber stresses that every company, no matter how small, needs both big picture and day-to-day governing. Most owners manage to get the day-to-day on their schedule, but they often miss the critical big picture planning and monitoring.
Here are four levels of authority and accountability that make sense for companies over $1 million. If your company is smaller, simplify this structure to something workable.
Establish a board of directors. Your board will be composed of you, any other partners, and key management team members (head of sales, production, administration). Include anyone else who will contribute effectively and with whom you feel comfortable sharing any information about the company, good or bad. The board will meet monthly and discuss only the highest level, big picture issues and planning. The board will OK the budget and business goals, make course corrections, and approve any major business decisions.
Develop your key management team as a management force on your behalf. The head of sales, production, and administration will meet with you on a weekly basis for a meeting likely to last 90 minutes. There will be a formalized report from each attendee as well as a chance to get input on the challenges each faces. One person will keep notes to be distributed to each attendee after the meeting. This is a "State of the Company" update and lets everyone in on just how the company is doing, what actions need to be taken, and who is to do what by when.
Have all key management team members meet with their own teams. On a weekly basis, each department head will meet with staff to reiterate departmental objectives and find out how each job, or each sales or administrative task, is going. Again, goals are set and monitored and challenges are addressed, only this time at the departmental level. As owner you'll visit occasionally as an observer, but the department head will run these meetings.
Gather the company together. Get the entire company together on an annual, semi-annual, or quarterly basis. This is your chance as owner to put a uniform message out about where the company is going, what your vision for it is, and where your major goals are taking you.
Set a schedule of meetings each week that doesn't vary. Insist the meetings go on every week no matter what and can't be canceled. These meetings should be the first thing to be scheduled each month. Keep them on time and on track.
The above outlined structure trains tomorrow's leaders for your company. It aligns the company's direction with its goals. It will save time by limiting the need for all those informal communications. It will enhance accountability. You'll be amazed by the momentum you'll achieve.
--Linda Case, CRA, is founder of Remodelers Advantage Inc. in Fulton, Md., a company providing business solutions through a network of experts and peers.
