As business owners, we have to wear many “hats”. The quality of leadership and management are two aspects that will have a profound impact on the results of the business.
What is the difference between leadership and management? A simple yet profound way of explaining the difference is that leadership works with the teams’ hearts and spirits whilst management works with the teams’ bodies and minds. It has been well documented that quality leadership will unlock more value than management but that does not exonerate us, business owners, from doing the tasks of management properly. It is almost like two sides of the same coin, we need to do both properly.
Let’s focus on one of the key management tasks for business owners being the performance management of the team running the business. Assuming you have recruited well and got the right people appointed in the right roles, how do you get the most out of them in a sustainable manner? As a business owner, you need to ensure every team member has a positional contract that clearly spells out who they report to, what their roles and responsibilities are, and it must contain their KPI’s (Key Performance Indicators) that include SMART (Specific, Measurable, Achievable, Realistic, Time Frame) goals.
The next critical part of managing your team is to implement a Performance Management System. All this really means is that you need a process to engage with team members on an agreed time frame (preferably quarterly) where you sit together and review their performance against the agreed SMART goals agreed. It is important that these discussions are documented and a simple template with a weighting and scoring for each KPI works well.
There is often a disconnect between the team member and the business owner’s perceptions around their performance and these formalised discussions are critical to close the gap and get in full alignment. Where a gap in performance is identified this is also an excellent opportunity to interrogate the reasons for the gap in performance and to agree on mitigating actions to close the gap. For example, the gap in performance might be caused by a lack of skills and therefore a training or coaching program can be agreed upon with the team member to close the gap prior to the next performance review discussion.
Business owners often neglect this basic management task of team performance management and often end up doing the work themselves. You might have heard business owners saying: If you want something done properly, then do it yourselves! This does the business no favours because the team is not developed and the business owner runs the risk of working in the business too much which often leads to burnout and business failure.
Business owners have to prioritise building the right team and managing their performance through a structured and documented performance management system. This builds massive leverage into the business and is a critical step towards building the ActionCOACH definition of a business, being a commercial profitable enterprise that works without you. Don’t neglect this critical management task and reach out to us at ActionCOACH if you want to achieve massive results in your business.