Changes in the distribution of functions. Formalizing basic processes. Formation of a new system of incentives.
After a successful start there is a moment in every organization when the management realizes that something significant must be changed.
Due to many current problems it’s more difficult to pay necessary attention to developmental issues, the assigned tasks are fulfilling more and more slowly and with difficulty, product or service quality is not equally good and gradually is tend to deteriorating. Even customers’ dissatisfaction increases, the management feels that there are many opportunities in the market that are not used by an organization. Sense of teamwork decreases in employees, sparkle in their eyes disappears and disapproval can be increasingly seen on their faces. They demand attention, but you have no time for this, they are demanding more rights, but you think that it’s too early, they give suggestions, but you do not understand them, you feel that the distance between you increases, and you miss the time when you have lived as one family. This means that a period of enthusiasm in your business is over, and the crucial period of time has come.
This is one of the most dangerous periods after the start, and if you understand it later and make late changes, you may fail to save the organization. Evolutionary, chaotic changes are no longer sufficient to maintain a sense of control, you have to make a step aside and look at what is happening in your organization. Changes in the distribution of functions; Formalizing basic processes; Formation of a new system of incentives are the three necessary changes, without which the crucial age for your organization could be fatal. The best result, however, may be that you simply cannot continue to grow and have for a long time to put up with the fact that your business will not be growing, and therefore successful, which, unfortunately, in many cases, is associated with rapid growth.
It’s not enough to write an article, even a book per each topic, but we still try to focus attention on the core issues of the draw and who knows, maybe in the future we can discuss each issue in more detail.
Changes in the distribution of functions, i.e. what to do
Most often, the above-mentioned problems lead the management to the conclusion that their managerial competencies are no longer sufficient to continue operations successfully. At this stage we begin to think of finding someone “magician” supervisor (mostly outside the organization) and assigning the management to him. They themselves continue their activities in specific areas of work and perform the tasks of a more experienced manager, or even worse, they continue to monitor developments from the so-called Supervisory Board. If you fail to find such “guru”, you will have to find another way out. If you accidentally meet someone who impresses you and assures that, if you give him all the rights and do not interfere in his decisions, he will be able to save your business, consider that you are facing very serious problems. Finding such a person, his proper motivation and adaptation to the organization is so difficult that the chances of success are almost equal to zero. Greater is the probability that you will witness the destruction of everything you have created with such diligence for a long time. In the best case, you’ll witness such adverse changes in your organization, imminent crash of which will be clear even for you. Consider that you are lucky if your favorite is inactive and in fact turns out to start no revolutionary transformations. This means that you lose only a few months or a year and then you will have to cope with them again.
It will be more appropriate strategy instead of looking for a new, powerful ruler, try to correctly distribute functions between the members of the team, and add only a manager competent in the most essential and particular function. And this person in order to avoid undesirable consequences adds not more than one function at the same time as well. Since more than one person enters a small team of the management at the same time, the chances for incorrect communication, integration and motivation will greatly increase. As a result, the culture, on the traditions and skills of which are often based organization’s success at the beginning, can take a significant blow.
It is better to think about how are determined the main objectives for your organization’s success, allocate responsibilities of these tasks within your organization in the best way, even if you think that your team members are not so strong as a competitor’s employees (which is often more mirage than reality, since the vision is different outside the organization). This will increase the motivation of the people; gives them directions what to think. This will lower your operational concerns and leave more time to work on the development.
Do not try to explain the rights and responsibilities to people in detail. It is enough to define their main competencies and directions in a few lines. Leaving the area for free action in the role distribution will save you from fatal errors, give chances to team members to express their abilities and make changes in the methods of work more consistently and effectively.
The distribution of functions and responsibilities is the first and necessary step, which should make your organization to pass easier its crucial age, strengthen the management team, differentiate operational and development issues from each other, and reduce the stresses caused by sense of missed opportunities on a daily basis and doing work within insufficient capacity.
However, this is not the end of problems. You will have to change working methods as well, because only distribution of roles cannot bring great results without it.
Formalizing basic processes, i.e. how to do
At a start point the processes are usually established chaotically. Work methods are improved through experience and some things start to somehow work out. Result comes out, product or service are somehow produced and sold, the organization is somehow managed. But the fact that these things are done somehow and not through clearly defined methods, preserves organization’s success only at a certain level, since its result is based on particular management style of small amounts, personal features of particular persons and the members of management. As soon as the volume of activities are increased, the new employees are added both to the organization and the management team, and there is a need to define more clearly who does this or that, in what order and how. Without this it is difficult to stably retain the product (service) quality, efficiently use the sales opportunities and all major resources at the disposal of the organization.
There are three processes you have to put in order in any case – production, sale of products (services) and general management of the organization. In addition, due to peculiarities of the business you might also need: the formalization of recruitment and career development, product quality control, distribution, relationships with suppliers, logistics, or other processes.
During the working process of product (service) manufacture your most important tasks are to formulate who should do what, when and how in order to preserve not a very high but stable product quality per each particular case. Since the user can accept the fact that your product is not of the highest quality, but he doesn’t tolerate the varying quality (it can happen only on certain products, and very rarely).
The maintenance of cost-effectiveness will be the second, no less important task during the working process of production. So your task is to sort the process in the way which minimizes various duplications, time and other losses, the probability of defects. Without this your well-organized processes may cause the uncompetitive price of the product. These changes will result in discrediting the changes and reducing your authority as well.
The third, an important task is to build the manufacturing process so that it will include the necessary actions required for the continuous development of the product (service). First of all, it implies a constant interaction with customers, collection, analysis and response to their opinions, as well as regular collection of similar international and local successful practices, their processing and consideration. Without this your success will not be long.
While working on the sales process, it is important to understand what you are selling, try to see your products, its strengths and weaknesses – what are its benefits for users, what are its advantages and its weaknesses, how dangerous can it be for customers, see and understand the user’s opinion about likes and dislikes, what are the most competitive strengths, etc. The facts how well you know your product, how fully, correctly and accurately formulate the information available for the users largely determine how well you use the sales potential.
The second important issue is proper definition of target segment (s) while working on a sales model. Often different information for different groups of customers may be necessary to obtain the correct decision. There are cases when the products produced for different segment turns out to be a very desirable for other customers. Consideration of specifics of customers in sales model is necessary factor for the success.
Third, perhaps the most important in terms of costs and sales results, is the right choice of information dissemination channels in sales model. The well-known stereotype that television programs are almost the only way to advertise a product is wrong in many cases. The more precisely you know who to give the information, the easier is to select the correct distribution method. This is important not only in terms of costs, but also to avoid unwanted excess demand as well, in which case your reputation might be in serious danger.
As for the sorting of overall management processes, here the most important is the part of financial statements which enables you to control cash flows, financial results. Transaction reporting, which is necessary for the protection of the current processes and periodic strategic reporting, which should be prepared by the curator managers, should be discussed at least once a year (or once a quarter or once a half year).
Sorting settlement in time will also naturally result in the development towards process planning such as financial, operational and strategic planning. In the end, the organization will further strengthen the feeling of control, and the results will be much more predictable and clear.
Overall management is a part of processes, which speeded up is less likely to be necessary, just a constant, consistent care for its development, many experiments and the execution of disciplined decisions are enough, which gradually put the management process under automatic regime.
Motivational system development, i.e. who works and why
One of the most important conditions is the motivation system arrangement after successful completion of the crucial age. The flow of new staff, distancing from field management members is an inevitable result of the growth. It also necessarily requires the system resolution of the issues that are resolved once before, and in some cases under chaotic circumstances and at an experimental level. It becomes necessary to create a well-defined mechanism, which increases the negative effects and their impact on employees’ satisfaction are maintained at a certain level.
Topic on motivational systems can be especially difficult and volumetric for the organization. Its detailed discussion in this article would be impossible, but here we will try to highlight the most important issues.
Transparency strategy. So, the information about the amounts of salaries should be available to everyone, at least for most people involved in the management process. Because it makes you think more and more about your decisions at all stages concerning their fairness, substantiality and long maturity.
Unfortunately, organizations are frequently choosing another strategy. They carefully hide this information based on the reason that people are not ready for an objective assessment, and as a result they make more and more biased decision, which is ultimately never hidden. It is impossible to hide this information for a long time. This will be followed by a more negative effect as well.
Second important issue is to be based on the bonus formulas, which is also an undesirable practice and which, more often, in the long term, contribute to the team’s collapse rather than the improvement of outcomes. It’s impossible to create the perfect formula, which more likely causes a sense of separatism in people, rather than team integration. However, despite the short-term positive results, this is followed by much more severe consequences within comparatively long-term period.
And finally, use maximally all possibilities of intangible motivation. It is much cheaper, but the result is very specific and important, especially in the case of new employees. Praise, celebration and assessment of their achievements are necessary bases without which the appreciation will be neither objective nor sufficiently effective to finally stimulate employees.
Unlike the overall management process, the experiments in motivation systems often can be fatal for an organization. During its designing many details should be taken into account that it is always better to think a lot before decisions are made. Since each such change causes the change in people’s attitudes towards work. Under continuous experimentation this fact leads to the ultimate frustration on their part, unserious attitude towards the organization and management.