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A Case Study Look: What’s the Value of Your Managers to Your Business?
October 18, 2007
Because you can’t do it all, the secret to a successful, thriving business is a competent and committed management team. Additionally, when family members do not exhibit that they have what it takes, your managers are critical to the on-going success of your business.
So how do you retain and motivate key managers for the achievement of your business and succession goals? First, identify the managers who are bringing value, then incentivize them according to the impact they are having on the business.
To illustrate, let’s refer to the case study that was discussed in my prior post: Smith Electric. As described in my previous post, the Smith’s were in a very vulnerable position. Unfilled promises left them at risk of losing the secret to their success: the management team. As a result, they asked for an assessment of their situation, which started with identifying who their key people actually were.
Below is my assessment, which may help you identify your superstar managers.
- Bart: Manager
A mouthy, edgy dude, Bart had not delivered on his promise to bring business and was not respected by the team for serving the best interest of customers or the business. As a manager, his departure would not cause a business disruption or create ill feelings. The Smiths did not need to be concerned about his loss, only his replacement, and better sooner than later. His removal could actually improve harmony and productivity.
- Mark and Larry: Key Managers
They were above-average managers and role models for hard work, loyalty and dependability. These two managers were the foundation for the “can do” attitude that got things done. They were not risk takers, but they would walk out over principle if they continued to feel they were not being disrespected by under market compensation.
- Bill and Sam: Special Key Managers
As impressive motivators and managers, they were both factors in much of the growth. Driven by ego, recognition and respect were high priorities. They were the ones threatening to quit because they felt both discouraged regarding being a partner and disrespected with regard to income. In order to prove their worth, they were planning to walk out and go into competition just to prove they were the real deal.
- Ray: Very Special Key Manager
Ray had exceptional leadership ability and extra ordinary influence over the success of the business. Although Bill and Sam had relationships, it was Ray who was able to convert those opportunities into satisfied customers. Not mouthy at all, Ray was driven to be a business owner and there was little doubt that goal would be achieved with or without the Smiths. Unlike Bill and Sam, Ray understood the brain damage associated with opening a new business.
Based upon interviews and independent references from the managers, it was confirmed that Junior and Sissy, each for their own unique reasons, could not run the business in Mr. Smith’s absence. They would need help such as Ray, Bill and Sam, who they could depend upon during good times and bad.
Mr. Smith’s frantic response was “Are you suggesting that I take on three partners? Our family will loose control and my kids will eventually be pushed out.”
I responded “No, I suggest that you develop a Succession Bridge that provides appropriate compensation and golden handcuffs for each class of managers to keep them on board and in support of your son and daughter as they pursue succession.”
Next: Case Study Look: How to Lock Key Managers into Your Business
Posted by Loyd Rawls on October 18, 2007 | Comments (0)
