What Different Functions are Essential to Manage an Entrepreneurial Venture?

There are five key areas in most business plus the softer skills of management, leadership, hiring and creating a productive culture. The five key areas are:

  1. Marketing
  2. Sales
  3. Product/service development (innovation)
  4. Finance
  5. Operations & Customer service

A new venture needs slices of expertise in each area with a senior person that has 5+ years full-time experience in each on tap. Initially the development of the company is mainly about #1 and #3, which Peter Drucker the father of management says are really the two key functions. This is true because they require more creativity and top people.

In addition, under these categories of business there are about 30 to 40 more detailed level skills needed to grow any company. For example, marketing would include: branding, strategy, graphics design, SEO, PPC, copywriting, web page programming, etc.

I created a course to review these skills that is about one hour and free here:

This is about growing significant businesses and building...

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What Are the Three Levels of Management?

Like any model, this just divides a highly complex topic, or spectrum, into a number of levels to simplify.  However, this can be useful to set some framework and goals to climb that ladder.

First, Management and Leadership are “Arts” not skills, consisting of hundreds of skills combine and requiring experience not book learning. That said, I created a model with five styles of Management learning, each would enable a person to start their own company and do well.  They are only learned through experience. 

Every person should be managed mostly using one of these techniques, or styles:

1. Micromanagement - the lowest form to supervise individuals in real-time. Generally, only need for low level and lazy workers. This style is only for inexperienced people or those new to the organization. Or people in very low-level jobs that need to be monitored constantly, often because the job is repetitive, unskilled and low paying where it is difficult to find...

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What are Some One-on-One Manager Best Practices?

Management is an art, not a skill that can be put into an easy list of rules. Your question is kind of like asking how do I paint a perfect work of art? Even Leonardo Davinci could never answer that as it takes years, even decades of experience to learn.

However, that said, some important foundational philosophies are known to be very effective. I’ll list a few below. I would recommend reading The Daily Drucker or other Peter Drucker books first. I also have a Recommended Reading List below with many great classics and serious Entrepreneurs and business owners should read most, if not all, of them.

Tried and true management philosophies:

1. Set up a win-win scenario between every employee in the company providing challenge, learning, career growth and encouragement. More for those that put in the extra effort to study and learn on their own time. This will allow you to attract and keep the best people. As the best people want challenge, growth and appreciation. These are...

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Is Management Still Relevant As A Course Of Study Today?

Of course.  Anytime people are needed, management is a required skill, or more accurately a required art.  It is also a philosophy which generates the culture of a company that should be appropriate to its own market circumstances.

And yes, I agree with Elon Musk and others that our university system cranking out MBAs is not a solution. Colleges and universities are failing to adapt to the new world. There are now so many specialties, industries, and skills that few programs provide the practical learning needed to be a successful Entrepreneur or manager.  That is why I created The CEO & Entrepreneur Boot Camp in 2004. 

People change on an evolutionary timescale, and almost all still need to be managed.  No amount of technology will replace the need for managers and management.  At least 80% of people need to be guided in their work.  And they always will.  Because most people are followers, not leaders.  They do not want to take...

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What are the comprehensive differences between managerial and non-managerial?

Almost too broad a question to be worth answering, and you could write many books on the topic. But in short, managers are expected to:

Think, analyze, plan, hire, fire, improve productivity, budget, motivate and be accountable for results (not activities).

Individual contributors do little, if any, of these things. Of course, some professionals are required to do some of these things too as their main job. i.e. Accountants budget and plan money. Architects design and plan projects and budgets.

Typically, there are four levels of ability and skills in an organization, and almost all professions:

  1. Individual contributor - does the technical work
  2. Manager - Manages those ICs. Typically, the “Span of control” is 7 to one ratio. Though this can vary by industry and company structure.
  3. Executive - Manages the managers. Generally requires 15+ years experience and deep domain experience in one area of sales, marketing, finance, operations, product...
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Do managers need management training to be effective?

Absolutely, but that is not to say most people do not learn on the job. Teaching management is like teaching art, it is an art.  You can study and learn foundational principles, but practice is required to get good.  I recommend reading several books by Peter Drucker first. Especially The Daily Drucker.

There is so much to the art of management that comes only with experience. But you will learn foundational principles and philosophy from these texts.  Key systems, for good management, include:

A) A regular meeting and Management By Objectives process (MBO = specific goal setting).  Some call this OKR now, but it is the same thing, really. This is key to corporate productivity. Research shows a 56% impact on enterprise value creation. That is HUGE! 

B) Having a dashboard with clear metrics (KPIs) that are all “owned” by someone and directly tied into the corporate strategic plan. Needed when > 7 people involved in a company or department,...

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What Happens when a Doctor Run Company Becomes More Professionally Managed?

 

BEFORE

After 3 Years

 

  • Revenue $20M, low profitability at < 10%

 

  • Four Locations, one failing
  • Founder stressed with no real management team

  • Growth rate: 15% CAGR
  • Poor morale and recurring revenue with high employee turnover.

  • Business Value: ~ $20 million

 

  • Revenue $40 million, high profitability at over 25% not including huge increase in enterprise value
  • Six locations
  • Founder has full team in place (done in first 6 months).  Less stress, more success and growth.
  • CAGR: 40%-50%+
  • Morale improved greatly. Reduction in turn-over especially in senior positions.
  • Offer to buy from Private equity firm for $60 million due to better recurring revenue, growth and strategic position in marketplace.

ROI: Increase of $40 million in enterprise value for an investment of about $100,000 in OD and MD programs. All paid for from internally generated cash without any outside financing.

To learn more, click here

What was Done Over Fourteen Months?...

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A Simple Structure of Time Management and Prioritization

Get More Done, but Also Get the Right Stuff Done

Effective time management is accomplished by using the Pareto principle of 80-20.  Making sure that  80% of your time is spent on the 20% of the work that makes most of the difference.  Some have called this the Picasso work. Where creativity, talent or experience is critical.  The book Blink by Malcolm Gladwell also discusses this principle and calls it reaching the level of unconscious competence.  Brain science and scanning have recently proven the biology behind this, whereby human beings used neuroplasticity to rewire their brain for certain sophisticated tasks. This is why experts who have spent 10,000 hours or more can potentially answer or do something in the blink of an eye. Where the book title comes from.

There are some things experts can do in hours, or even minutes, that others could never accomplish in weeks or even months. That is the invisible value of five or more years of experience, When...

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Simple, Yet Powerful Management Methods

There are far too many texts and systems on management, and I do not want to create another.  However, there is a simple and effective system I use that leverages many of these wonderful systems that can be anywhere from fantastic to disastrous in a particular situation.  In every case, some thought must be given as to which technique is appropriate for each special circumstance and individual. 

A simple, yet very effective, model for people management uses the following combination of well known management styles by selecting the appropriate method for each individual.  This is an easy model to understand and implement, and adjusts the management style to each individual's specific abilities and limitations.  In general, you are going to work very closely (micromanage) with anyone when they are first hired to help determine where they are on this scale and then move down the scale until you reach their current ability to perform.  Initial...

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When and How to Use Consultants Cost-Effectively

Consultants And Getting The Most Value Added

As a CEO I struggled long and hard over any decision to use a consultant. There are many issues that need to be managed by the client to keep a consultant from going overboard on time and costs.

Too many need to long to get up to speed on your business (on your dime), cost too much, and can not provide tangible results on a limited project basis. Too many are unproductive and do things in ten hours that I know I could have done in 2-3 hours, as paying by the hour is often a de-motivator while paying by the task aligns the client's and consultant's interests more.

All that said, I currently make my living as a consultant and do believe there is a better way.

The old saying that a consultant is someone who you pay to learn your business who then goes down the street to sell that expertise to someone else next week can be true if you let it happen that way. But it does not have to be that way if you use consultants appropriately and as a...

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