The realization about the importance of training in the field of management and leadership is largely missing in startups and small businesses (whom we shall refer to as entrepreneurs). I have seen numerous entrepreneurs with great skills and potential never able to grow beyond a mediocre level in spite of working hard throughout their lives. There is a resistance to change after an initial five to six years in business. This is one more reason to create awareness about the business basics among entrepreneurs when they are young.
In the initial period, an entrepreneur carries and supervises multiple tasks like marketing, production, purchase, stores, personnel, research & development etc. But soon he must move on. I shall restrict myself to discussing a few points which are applicable to enterprises in general and have worked well for me and my clients.
1) Do what you are good at: I have seen technocrat entrepreneurs typing quotations, struggling to discover keys on the keyboard. I have seen doctors engaging in lengthy arguments with their ward boys over a casual leave. The sight of busy entrepreneurs attending incoming phone calls on routine and trivial matters is not uncommon. What a waste of time and energy.
The very first question an entrepreneur should ask himself is: What is that I am good at? What do I like to do? What is my core competency as a person? – It might be expertise in the technical, execution, marketing, administration or any other area of the business or profession.
The next step would be to gradually install a system whereby you will be able to concentrate on work pertaining to your core skill while delegating other activities. The installing system involves defining the work procedure and delegating the same in such a way that the work flows flawlessly requiring your involvement only at a critical stage. Management skills are skills in installing and implementing such systems. Every entrepreneur is a logical thinker and undoubtedly possesses these skills, which requires nothing but logical thinking. Yes, problems and mistakes will still occur in the system. Learn and eliminate these problems as they occur. Don’t wait for a perfect system to start. Start and make the system perfect.
The final aim of installing these systems and procedures is to create specialized departments. Depending upon your business the departments to be installed and the sequence in which they are to be installed will vary. An illustrative list of departments can be Accounts, Administration, Costing, Human Resource, Internal Audit, Marketing, Production, Purchase, Quality Control, Research & Development, and Stores.
Once the systemization is initiated you get more and more time to concentrate on your core skills which will sharpen them further. Reach a point where the organization builds around your core skills which you love to do. One or two core skills can build an organization if other areas are managed well. Many lose the motivation to grow their businesses because they do not continue to enjoy their work. Then the business becomes merely a means of subsistence. Do most, what you enjoy doing the most. Happiness is not the result of success, but success is the result of happiness.
2) Delegation: Without taking delegation into consideration no system can be designed. Delegation is a habit which an entrepreneur must inculcate in himself. You have to believe in the ability of your people. Employee motivation and training is the backbone of delegation. Responsibilities and procedures should be clearly defined by the system. The delegation of authority should be commensurate with the given responsibility. Resist the temptation to interfere once the work is delegated. When an employee approaches you with some problem, request them for alternative solutions as well. The solutions they come up with are most often the best because it is their job and they know the details better. The biggest task of a leader is to make his employees think like owners. Once the employees can think like owners, most of the problems blow away in thin air. Realise that some of your employees are more intelligent than you. Just because of some non-conducive circumstances they could not get the desired education or could not be an entrepreneur. Respect their intelligence and skills.
3) Chartered Accountant: If any single consultant can play a big role in your success it is your Chartered Accountant (CA). They can be your best friend and mentor in business as they have immense insight into businesses. Day in and day out, they are dealing with finance, business, economy, government, management, investment, and law. Hire a CA who is organized and can give you the required time and attention. Meet your CA at least once a month. Prepare an agenda for the meeting, mail him the agenda well in advance and talk relevant in the meeting. This is my personal experience that people use a very small percentage of their CA’s immense expertise and knowledge. The cost incurred on a CA is minimal compared to the benefits you can gain with his expertise. CA’s are like our smartphones, we do not use 75% of their features.
4) Concentrate on Income, not Expenses: As an entrepreneur, it makes sense to concentrate on increasing sales and incomes, rather than spending too much time on thinking about reducing legitimate business expenses. Firstly, there is minimal scope for reducing expenses beyond a reasonable level. The small reduction in expenses beyond this level is not worth the time and effort spent on achieving it. Putting this time and effort to increase the income side will prove more beneficial. Secondly, sales and incomes are scalable whereas expenses are not scalable. What this means is that sales and income growth can be exponential, whereas expense reduction cannot be exponential. Thirdly, concentrating too much on reducing expenses leads to an attitude of skepticism which is not good for an entrepreneur. It just gives you the satisfaction of a ‘detective’. On the other hand, concentrating on increasing the income side leads to being more creative and gives you the satisfaction of a creator.
If you are in a business where your survival depends on cost cutting, and there is limited scope for increasing the income side, it cannot be a high growth long term business proposition.
5) Leadership: The most important skill at this point is the leadership skill. It is the entrepreneur’s personal skill. You cannot afford to hire people for leadership skills at this stage. If you think that leadership skills are required only in large scale organization, wake up. A small entrepreneur needs more leadership ability than any big business does. They have to function through various peculiar constraints like finance, manpower, technology, space etc. almost single-handedly.
The leader should be a motivational force, a rational risk analyzer, value-driven and a visionary. These are intuitive skills. They have to become a part of your personality. For developing these intuitions an entrepreneur needs to look at, and understand the big picture of life. This will help you understand people, deal with situations and evaluate events on a larger scale in a de-conditioned manner. You rise from a level where you see the world in terms of money and ego, to a level where you look at the world in terms of human life. Rational thinking is the key to develop a leadership vision. Meeting people with the right attitude, reading books, attending seminars etc. will help in the development of rational thinking. Having read this article up to here assures that you have fertile land. Now, plant the seed and water it.
Love,
Mahendra Chaturmutha.
