Advancing Executive Management Fundamentals
In the past, I have written many times about the fundamentals of business management, business development and marketing; over 200 articles which are posted on my personal website of www.AskTheBusinessDoctor.com and more than 20 articles published internationally.
This short article will be focused on updates to the fundamentals for executive level management.
The briefings in this article will be beyond thought provoking and be quite insightful.
In my attempt to keep this article brief, I will not be going into extensive discussion of each point but the truth for each should be so obvious that extensive discussion will not be needed.
If I have done a good job with conveying the advanced information in this article, you should lose some sleep and be deep in thought on many of the fine points here, for many days.
If this does not happen, either I have failed in conveying the important information or ‘you just do not get it and maybe will struggle to ever get it’.
Let us continue with the advanced information.
Businesses that have a competitive advantage with differentiation that meets market needs, in a reasonable healthy economic market, is a favorable business to be in both as a business and as an employee.
Such businesses are more profitable.
Such businesses can afford to attract higher skilled management and employees and pay the higher wages to attract them and retain them long term.
Such businesses have the financial structure to stay healthy through economic ups and downs without downsizing employees and major operations expenditures that hurt the organization long term.
Skilled management and executives working with a business organization in poor economic markets can look poorly and get minimal results regardless of their skills and expertise.
Management and executives working in businesses that are in better economic markets may look good with results regardless of their skills and expertise.
Skilled management and executives in businesses in the better economic markets tend to out-perform competition significantly.
Mediocre businesses in poor performing economic markets rarely turn into high performing businesses.
If the business is in the poor performing economic market, one should hesitate changing your management and executive unless for good specific reasons.
Skilled management and executives need to closely consider the business to work for regarding being in a healthy economic market Versus not as healthy of an economic market.
If the business is in a good economic market and not out performing competition this is good reason to consider changing management and executive level.
Some guild lines for the definition of a healthy business in a reasonable economic market is; one that has differentiation in their products and services that the market needs and the ability to stay at 50% to 60% net profit to be able to invest back into the business for improvements and be able to pay top wage compensation to attract and retain top management talent.
We all have a deep need to be appreciated.
Part of management’s job is to make sure that all employees feel recognized and appreciated.
Criticizing others is not productive and makes things worse.
Always build on the positives, offer suggestions and ideas for alternatives and improvements.
Pose questions and challenges but do not criticize.
The normal performance reviews with criticism are not productive.
People do not accept criticism well and instead become defensive and become de-motivated.
If criticism is needed, do so by category or subject and not by name or individual.
We need to improve on-time delivery. What are some of your ideas on how to improve this?
You as the manager of the shipping department are doing poorly with shipping and fast delivery.
We need to improve customer relations and repeat orders.
What are your ideas about how sales and customer service can help improve customer relations, customer loyalty and increase repeat orders?
Use stories and case studies to illustrate alternative ways and methods to improve on.
Used correctly, you can inspire and motivate others to new highs and success.
Used incorrectly, it is devastating, destroys creativity and motivation and can destroy your business.
Using praise and appreciation is the pathway to motivating management and employees.
Avoid conflicts, arguments and making others feel poorly.
Motivating others to come up with possible solutions and improvements is far better than just telling them the answer that you think is correct and then expecting improvements.
Instead of setting goals and objectives for others, it is more effective to guide them into setting their own goals and objectives.
Doing so will help achieve them.
Ask questions and suggestions instead of giving direct orders.
It is more effective to achieving success.
As executive or senior management, be careful of company debt.
A down turn of economy with debt can be devastating to the business.
Be careful of using debt to create earnings.
Generally speaking, long term debt should not be more than four times the annual net profit. This is a good guide line to use.
As a manager or senior executive, you will make mistakes in your career.
Always be honest when they happen and admit to them publicly and boldly.
Never hide for them, blame on others or deny.
Analyze your mistakes and errors to learn from them so you will do better as your career continues.
Others will respect you far more with this positive approach.
Beware of support staff, advisors and consultants that are ‘Yes People’
For every idea that you may have, your staff should be honest and aggressive enough to come up with facts that make you hesitate on many of your ideas.
Support staff, advisors and consultants have a tendency to come up with information to support CEO’s and senior executives’ ideas even if the ideas are not the best.
Challenge their support and supporting information.
Set as a challenge the need for detailed information that just not supports your ideas but also shows it in error and shows better alternatives.
This is the true need and nothing less.
Be honest with your accounting and financial numbers.
It is easy to use various accounting methods to mislead others.
Look for ways to insure that all of the facts are known and Not misleading.
It is important to support creativity and innovation but it is also important to manage the costs of such.
It is important to continually update your knowledge with education and trainings.
If you discover some dishonesty in your business or company, do not deny or hide it.
Instead, investigate it thoroughly, hold those responsible accountable, put things in place to improve it and hopefully prevent it from happening again.
Do not deny or hide it. This will only create mistrust.
Create company programs and awareness to hire upward.
There is a critical need to always recruit, hire and retain the highest talented individuals that you can find.
There is a natural tendency for management to hire those below their own skills and expertise to protect their job position and self egos.
Beware of this and have aggressive processes and programs in place to manage this natural tendency.
Business organizations have a natural tendency to resist change even if it is needed to grow the business.
Too often, this continues until the business declines and management staff has to be replaced.
The time and costs needed to bring the business back up can be extensive.
Beware of this and avoid letting this happen.
Keep watch over changes that are needed to keep the business organization healthy and growing.
Keep a close watch on the over head expenses to keep them down and keep monies available for things that will help grow the business.
Keep in mind that well-known phrase from Wayne Gretzky, the famous hockey player.
When asked what helped him be so good and set so many hockey records, he replied with something like;
“I think about where the hockey puck is going to be next and I go there before it gets there’.
This applies to businesses.
Keep close watch over progressive efforts and results for;
1. Increasing customer loyalty and keeping customers
2. Uncovering more needs of customers and make sure you increase your capabilities to meet these needs
3. Increasing sales from existing customers
4. Expanding market niches
5. Increasing new customers
All of these things need to be accomplished to grow the business.
Have aggressive programs to seek out cost reductions.
Special employee incentive programs for such will help uncover these.
Cost reductions help keep profits higher and provide the needed monies to invest back into the business to help it grow.
Strive for meaningful differentiation in your products and services that meet important customer and market needs.
If your differentiation is not viewed as valuable and important by your customers and market, it isn’t and it does not have value.
Remember the simple definition for ‘Value-Add’
It must meet one or more of these criteria.
1. It saves money for the customer
2. It helps the customer avoid costs
3. It gives the customer a competitive advantage
4. It helps the customer be more profitable
5. It helps the customer increase their sales
6. It solves a major problem or issue with the customer
Again, this has to be in the eyes of the customer and not yours.
Now, give all of these points some considerable thought, reflect with others and lose some sleep thinking about them.
Most importantly, remember them and apply them immediately.
If you have further questions or need some help, you can give me a call or email.
Michael P. Marshall, PhD
Senior Specialist and Executive Advisor for Business Development, Marketing and Sales
Michael has more than 30 years of business experience focusing on business development utilizing extensive skills in marketing, sales, and communications; both national and international.
This experience comes from starting at field staff level positions and then progressing up to senior level Director and Vice President positions in several industries and markets.
His expertise is also utilized in special advisory and consulting situations, as well.
Prior to his extensive 30-year business career, he studied advanced engineering and then transitioned to psychology and social human behavior.
He was a mental health counselor for several years in some major medical institutions prior to a business career.
In these endeavors he learned what makes people do what they do, what influences others, how to motivate positive behavioral change; and the importance to a strong foundation and the individual components in a structure.
Among the senior level positions held during his 30-year career, Michael has held director and vice president level positions in marketing, sales and business development in several industries and markets including medical.
Michael’s education and trainings include a PhD in business concentrating in marketing and business development, an MBA, bachelor degrees in psychology and social human behavior, advanced post graduate certification in marketing from UCLA, formally trained in ‘Creativity and Out of The Box Thinking’, federally certified in international business, and being an alumnus of six universities.
He has over 35 formal trainings and certifications covering the fundamentals of business development, marketing, sales, communications, management and leading a business to significant sales and profit growth.