| In Part Two of his series for BusinessesForSale.com, management guru Nicholas A. Tsiougos looks at the importance of building a team to manage your business. One of the most difficult decisions for many entrepreneurs is to let others take control of managing the business. It’s understandable, when year after year companies are defrauded by their own staff. However, a great company needs a great team and building a team around an effective system might just prove to be the key to long-term success. Much of building your team to manage your business requires a good base to set foot upon. The age-old saying, “put good people in bad systems, and you will get bad results”, rings true with all businesses, particularly since the team will handle a considerable amount of responsibility. As a leader, you need to understand what outcome you want to achieve, be it within one week, one month or one year. You also need to ask yourself: how will you know when you have it? This will give you a clear sense of direction and purpose, allowing you to build a system that allows the team and yourself grow, develop and excel within. Why a system? Many people picture a 'system' as an ugly and laborious method big corporations use. To the contrary, it doesn’t have to be such a scary thought, nor should it be only seen as a 'big company' scheme or method. A system is a base to build your team upon and can direct the financial and strategic objectives of the company. Warren Buffet, CEO of Berkshire Hathaway Inc and the World’s second richest man, has perhaps the simplest structure in place. As cited by Robert Heller, Warren, first of all, treats every unit manager as a CEO in his or her own right. He doesn’t impose targets, but likes each unit manager to tell him what they are going to achieve and how. Secondly, if they (employees) are happy doing an excellent job, only move them if you both feel they are not living up to their full potential; or you have another, more important post for which they are ideal. This may sound idealistic for many entrepreneurs and business owners; however it is these very same people that would bend over backwards to achieve the 30% annual return rate Berkshire Hathaway pays back to its investors every year. They would also indulge in doing triple somersault flips across a busy road for Berkshire’s stock price, which was $US83,190, as at 27 June 2005, 1:31pm, New York time. That’s right: eighty three thousand, one hundred and ninety US dollars per share. It has had a 52-week high of $US92, 000 and just for the record, in 2003 the company contributed $US3.3bn to the U.S treasury. Why is such a system infallible? It might be because it takes a long-term approach to the mission set, and in order to achieve this, it encourages and commits. Warren Buffet is quoted as saying: “Look at the business you run as if it were the only asset of your family, one that must be operated for the next 50 years and can never be sold.” This is a system that doesn’t enslave and asphyxiate one’s creativity and initiative. It generates an environment that is free from secrecy and bureaucracy. It builds strong and flexible foundations, with clear and open communication, be it bad or good. “If there is any significant bad news, let me know early,” Buffet is quoted as saying to his managers. The power of balance Once the system is in place, building your team is a balance between rapport, experience and attitude. Firstly, building rapport with your team is imperative because it promotes trust and reassurance between people. It is the essence of effective communication, be it through email, in person, through campaigns, seminars or other forms of literature, and contact between people. Though rapport communication is open, expectations are clear, and even if a mistake is made or something is said out of context, people are not drawn back or easily offended due to the high trust factor that is deeply embedded. Secondly, experience is expertise in an area that the business lacks. The value the individual will add to the business is important, as is their expectation of their growth and skill development within the team and company. Mark Bouris, the financial wizard of Australia, or better known as the Wizard of Oz, has taken Wizard Home Loans from nothing to being Australia’s leading non-bank lender in the past seven years. He puts it down to great people. Bouris is quoted as saying: “I’ve succeeded because I had the best people working with me.” Experienced people can carry some of the weight. They offer you the ability to delegate tasks that would otherwise consume you with day-to-day management and leave you little time for leading the company. Thirdly, attitude is fundamental. It is important to know upfront, how much the likely candidate wants to participate in fulfilling the company mission and how important it is for him or her? One way to know is to ask: “What do you stand for?” Many will twist and turn trying to find an answer, because it isn’t a question usually asked, whilst others will relish such an opportunity. This way you might see a clear meaning and indication of whether the person would like to wake up every day and want to fulfil the mission of your company. Never rush into selecting an individual, because all that you are doing is wasting money and time in the long run. It is important to work on building choices for the company, since the costs of the salary, insurance, pension, national insurance, PAYE, training and development are so high. That’s without mentioning the fact that you always risk losing your intellectual capital to your competitor. So be wise; look, listen and understand, well before you decide. In the long run, the team that fits within the system becomes an essential part of the development of the business and will be in place to tackle tough challenges in the future, whilst moving you into position, to lead them through these difficult periods.
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