Take a look at the employees of successful small companies and you will find that they work long and hard, frequently more than the employees of big corporations. At the same time, they are paid less, and they have fewer opportunities for professional advancement and a more focused area of activity. Look at this from the point of view of a capable employee who wants to achieve much in life. What are his prospects in a small business? If he is very good, he will very quickly hit the ceiling. Even if he becomes the top manager in a small company, his problems will still outnumber his triumphs. At the same time, in attempting to achieve great results in his work, he will inevitably take on more and more related areas and accumulate duties, but for most of the time he will not be doing what he dreamed of, but simply coping with chaos. You could say that a small business has one thing going for it: It may grow into a big one.
In order for a company to continue growing for a long time, it must leap many hurdles, including people-management problems. As a consultant, I interact with a large number of managers and employees, and in small business, I often meet people who are not even aware of the rules of the game that they are playing or the laws of people management. Frequently, people who are simply good specialists become managers; they do their work capably but have no idea how to organize the work of their subordinates. Most of them think that a managers responsibilities are giving orders, establishing incentives, and imposing penalties. Even so, they dont even know how to handle giving orders professionally, have no idea how to issue them correctly, how to monitor performance, or how to get informative and useful feedback. I am certain that you have dealt with these types of sales department managers, people who only recently were good salespeople, are competent in working with clients, but know nothing about what to do with their subordinates. Their favorite line is Do as I do. They naively think that the main duty of a sales department manager is to follow his superiors example and advice regarding sales.
I was once such a manager, naively supposing that, since our company sold computers, the main thing was sales, and that all our success depended on that. I was quite a good salesman, and all the other employees of the company observed with pleasure how I did it. Of course, applause is gratifying to a persons self-esteem, but it is impossible to create a successful company based on a principle of the star and the rest; for great achievements, teamwork is necessary.
Being a star is no simple matter, and creating a truly successful company and achieving great results using such an approach will not work. Real success calls for not only professional skill in sales or knowledge of production methods; the key factor is the ability to implement operations management. This is not an incredibly difficult thing, and the principles of managing a group of people are as old as the world. But it is also true that these principles are very difficult to apply in a small company in which every person and every cent counts. In this book, you will find answers to the fundamental questions about company management and, most important, how to apply this in practice, even in a small company.
Chapter 1
Team Play
The first thing one must do is to understand what administration is. Most people are firmly convinced that administration is something unrelated to work itself, something extraneous. Administration is frequently perceived as a synonym for bureaucracy a waste of ink and paper that only complicates work and adds nothing of value. It imposes the burden of submitting reports, participating in planning meetings, and filling out standardized report forms and documents that measure and guide the productivity and overall activity of the company. It seems to employees as well as to managers that all these reports have been imposed for the sole purpose of impeding work. And instead of simply selling or producing, people are forced to waste time filling out forms as part of reporting to management. It is not surprising that administration has such a bad reputation, and that administrators seem like bureaucrats of a sort, people who are not interested in the real business of the organization and merely shuffle papers.
Often, when a management consultant essentially an administration specialist comes to a company, employees do not greet him with ovations. And when a company manager tries to set up a planning system or implement regular reporting, employees perceive this as an infringement on their freedom and a questioning of their competence and productivity, so they respond to such measures with hostility. Yet everyone, for some reason, forgets the simple truth that for a game to exist, there must be certain rules.
Try to imagine a football game with no preplanned game schedule, no score charts, no system for counting points, no rules for the coin toss, or other administrative tools. Of course the game itself does not consist of these schedules or score charts, but what would happen if all of these administrative tools in football were suddenly to disappear? The world would lose a great sport.
In any business, a technical and an administrative component can be distinguished. For example, in the work of a salesperson, the technical aspect is how he interacts with the customer, demonstrates the advantages of the product, overcomes objections, and closes the deal. But even if that salesperson is working on his own, he still needs to engage in some sort of administration at a minimum, accurately recording his clients names on a notepad and adding up the amount of goods he has sold. This is obviously necessary, and if he does not keep a daily count of his sales volume, he will be unable to understand what technical actions are improving his results. He will not even be able to assess whether his work is going well or poorly. If he does not keep notes on his work with customers, then in only one month he will not be able to recall the details of his work with each of them, which sooner or later will have an impact on his sales. The work of the factory or of the purchasing department depends on the work of the salesperson, and if he does not have a plan to monitor current sales accurately and estimate future sales volume, the factory workers or buyers will not be able to plan their work, either. If a person works in a team, administration becomes an important component of a business activity, since it makes it possible to coordinate the actions of each employee with the other members of the team.
It may be an unusual idea, but only through capable administration is it possible to create an interesting and inspiring game! This sounds like a paradox, since in the minds of many, administration is something terribly boring, whereas the exciting activity of a game is entirely different- something full of emotion and enjoyment. Administration is associated with formalities, a game represents freedom and drive. So lets take a look at this sharp distinction.
People really like playing games, and even if there is no chance of participating in a game oneself, just watching a game can bring pleasure. Nothing can compare with the interest and emotion aroused by an NFL or college championship game; cities come to a standstill during a final game, and discussions of how our guys played become the main topic of conversation. Sports the Olympics, major-league baseball, professional football, college football all enjoy lucrative media coverage and draw huge audiences in the United States, while soccer has made remarkable inroads thanks to its popularity in schools, opening America to the worldwide excitement that the game generates.
It may be an unusual idea, but only through capable administration is it possible to create an interesting and inspiring game! This sounds like a paradox, since in the minds of many, administration is something terribly boring, whereas the exciting activity of a game is entirely different- something full of emotion and enjoyment. Administration is associated with formalities, a game represents freedom and drive. So lets take a look at this sharp distinction.
People really like playing games, and even if there is no chance of participating in a game oneself, just watching a game can bring pleasure. Nothing can compare with the interest and emotion aroused by an NFL or college championship game; cities come to a standstill during a final game, and discussions of how our guys played become the main topic of conversation. Sports the Olympics, major-league baseball, professional football, college football all enjoy lucrative media coverage and draw huge audiences in the United States, while soccer has made remarkable inroads thanks to its popularity in schools, opening America to the worldwide excitement that the game generates.
Or consider video gamers who battle virtual monsters. They move their heroes around, devise tactics, and are prepared to spend all their time on this. It is so entertaining that it is simply impossible to drag them away from the computer, and what is amusing is that victories in a computer game bring them nothing in the real world. Yet they are frequently prepared to sacrifice their real lives for the sake of the adrenaline rush that they get during a game. The game consumes all their attention, and they spend all their time on it, frequently at the expense of their health. You have surely said to yourself at some point, If only he would put as much energy into his work! And it is true: The enthusiast not only can achieve unbelievable results but he also takes pleasure in the game itself.
You don't really think, do you, that top athletes who set incredible records do so for the money or from a need to support their families? Of course, prizes are nice, and when prizes in a game liberate you from thinking of earning your daily bread and allow you to devote yourself fully to the game, that is wonderful. But people play games just because they enjoy playing, and they like to reach the mountaintop to become champions in their field of activity. What can we do to turn work into a game and make it inspire as much emotion and passion as ordinary games do? First of all, to do this, we must understand how a game works.
First, participating in any game involves a personal choice. In order for a person to really and truly play a game, he must choose that area of activity himself, and he must have a desire to prove something, to achieve some goal. Try to make a man play football if he does not want to, or try to drag a person who hates team sports to the stadium. Remember those unfortunate ones whose parents sent them to law school even though they dreamed of pursuing art. In the best case, such people will waste several years at a higher-education institution before eventually taking up their favorite work. In the worst case, they will actually become lawyers against their will and will do that work with loathing for the rest of their lives, taking no pleasure from the work and, as a rule, achieving little of any importance.
It is difficult to create a masterpiece if you do not love the work that you do. This is probably why it is so difficult to manage soldiers who have ended up in the armed forces only because they couldnt evade the draft. You see, these fellows, once in the armed forces, continue to actively struggle to avoid playing the armed forces game, and to actively demonstrate that they have nothing whatsoever to do with it. Their favorite game in the armed forces is to compete among themselves to see who can do the least work and to count the days until they are honorably discharged. For them, being in the armed forces is not a game; it is more like being in prison. Then look at professional soldiers, who have chosen to play in this very demanding game. They seem to be made of different stuff, and most of them truly like this activity. In spite of the difficulties and danger, they are proud of their work. The only difference is that some play the game of their own free will, while others have ended up on the playing field by force of circumstances.
Look at how much easier it is for many people to get carried away in a game involving killing virtual characters on a computer screen than by earnestly pitching in and helping their company become a market leader. Although it is illogical, many people nevertheless may sincerely believe that the success of a company is not their business, while the illusory win in a computer game is worth the investment of their time, energy, and passion. The same type of person may earnestly root for his favorite football or baseball team and be utterly indifferent to the success of the company he works for. The reason for this is simple: For many people, the company where they work is not the place in which they seek to achieve something of worth.
How do you think the average employee of a company will answer the question, What do you consider to be the goal of our company? My experience says that in small business, you will very often hear this response: Profit. This means that the employee considers increasing the owners wealth to be the meaning of the existence of the company in which he works. Naturally, in this case, there can be no talk of the attractiveness of the goal, of a desire to play the game to reach that goal, or of creativity. Why should he play the lets make the boss richer game? Perhaps, of course, that employee receives some portion of the profit and is therefore interested in increasing it. But in that case, he is playing the earn a bit more game, and this is not team play. Managers are surprised that employees have little motivation to work productively when they are playing the game of work simply to enrich the owners and managers. But who wants to run around on the field after a ball for the sake of lining the bosss pockets? If this is the case, it means the companys goals do not inspire employees to share these goals, do not arouse passion, so essentially, these people are not players in the companys game.
The most common reason for this is a company's lack of worthwhile goals that team members would find attractive, or a lack of understanding of such goals. If a person does not understand the goals of an activity, there will be no game. He may of his own choice aspire to achieve the companys goals only if he is aware of them and, of course, if his manager capably promotes these goals. Simply imagine a person who has been told to dig a pit but has not been told why this is necessary. Only a robot will put its all into such an activity. But explain to the same person that this pit is needed in order to supply hot water to an orphanage, and you will see how his attitude toward the work changes, and how enthusiasm and energy appear.
Setting goals for a group has to do with administration, not the technology of a companys activity. Thus in football, the technology is the methods that players use on the field, of which they must have perfect mastery, whereas setting the goal lets kick our opponents ass is administration. Without such a goal, even the most sophisticated technological methods lose their meaning.
The next integral component of a game is rules that establish the boundaries of the game and describe the possible actions. Without rules, there can be no game, and if the rules fail, the game collapses. If there were no precise rules in football and every player acted as he saw fit, the game would turn into chaos. A company must also have quite specific rules, which precisely define the rights and obligations of team members. Of course, all rules create restrictions that are necessary for the game to continue. Quite often, when rules such as a fixed work schedule, a dress code, or reporting standards are introduced in a small business, it leads to employee resentment.