Rapid Growth Isn’t For Everyone

Entrepreneurs are mostly focused on growing their companies and would like nothing more than rapid growth. However, is rapid growth good for all Entrepreneurs? Not necessarily.

Being ready for and managing rapid growth requires tremendous preparation and infrastructure. In addition to unique product and services and a solid management team, items such as adequate facilities, reliable IT infrastructure, communication systems, developed business processes, working capital lines of credit, access to growth capital, a group of professional advisers (lawyers, accountants, etc.), an industry advisory group or Board, and so on must be in place.

Most Entrepreneurs have a few of these things in place as they expand, but reach a crisis point when certain required elements are not readily available or in place.

While rapid growth is desirable, Entrepreneurs must ensure that they have in place the requirements to manage such growth . Otherwise, rapid growth might not be good for them.

Ravi Patel

www.patelcfoservices.com

Published in: on August 15, 2017 at 3:56 am  Leave a Comment  
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Developing a Management Team

Without having the benefit of an experienced, professional, and cohesive senior management team when they start and grow their companies, Entrepreneurs in order to expand and be successful in the long term must build a capable management team.

Blending in-house, on-the-job trained leaders complemented by key, experienced outside professionals (hired over a period), provide the Entrepreneurs the most cost-effective team. Identifying in-house personnel and training them to be managers should be the Entrepreneur’s focus once day-to-day operations have been delegated. Assessing the gaps in leadership, determining the management needs and recruiting appropriate outside leaders becomes the next step.

Having a management team in place is not enough. Entrepreneurs continually need to develop teamwork and cohesion to make the executives more effective for the long term. Entrepreneurs should find ways to train, motivate and reward the management team in a way that facilitates a group that can successfully grow the company, and allow the Founder/Entrepreneur to pursue other ventures.

Ravi Patel

http://www.patelCFOservices.com

Resisting Temptation to Blame Others

Don’t find fault, find a remedy – Henry Ford . Entrepreneurs could learn a lot from this statement.

In a blame-rich rather than solution-oriented culture, leaders (mostly political) often seek out whom to accuse of problems rather than finding solutions. This sometimes extends to poorly run companies with unhealthy culture and negative management practices.

In reality, it should be acceptable for leaders to hold people accountable for their performance. However, it is not wise to continually blame others for problems. Entrepreneurs have to take responsibility for the issues facing their business and teach their managers to do the same.

More importantly, blaming others or even accepting responsibility does not solve the problem. Entrepreneurs need to create a culture where finding solutions or remedies to issues takes precedence over blame. Such a positive culture allows people to readily accept responsibility for decisions without having to face ridicule.

Do the Right Thing by creating a solution-oriented culture in your company and incorporating that in your Mission.

Ravi Patel

www.patelCFOservices.com

Adding Value as a Performance Indicator

While most traditional ways focus on actual performance against expectations or against established goals to rate employee performance, here is a different perspective.

Entrepreneurs should put employees into three categories – those who add direct value to your business, those that are neutral or add indirect value, and those that reduce company value.

Pay special attention to the first category by training and motivating them so that they continue to add value. Have a strong retention program for these individuals so that they don’t leave your organizations.

Deal immediately with people who reduce the value of your company. These are the bad apples that need to be removed from the company as soon as possible.

The people who are neutral as far as their contribution to company value need to be either moved to the category of employees that add value by training, or red-circled if they are providing a support function to the first category of employees. If there is a chance that they would reduce the value to your company, they need to be transitioned out.

Rating employee performance based on impact on company value and dealing with them appropriately will go a long way in building the value of your company.

Ravi Patel

www.patelCFOservices.com

Accepting Mistakes

Great inventions were inspired by mistakes. Entrepreneurs like everyone else make mistakes, so their tolerance towards their employees making mistakes is expected.

Entrepreneurs should create a business culture that does not penalize people from thinking outside the box and making mistakes. An organization cannot grow if no one takes risks just to avoid making mistakes.

Making mistakes is acceptable if it is during the process of trying new methods or ideas. However, it is essential to learn from these mistakes and prevent future occurrences. People should grow by learning from their mistakes.

If an employee keeps on making the same mistake again and again despite training, coaching and direction, then that situation is not acceptable. It is no longer is a process of learning and ultimately hurts the organization.

Making a mistake is acceptable. Not learning from that mistake is bad; making the same mistake repeatedly is worse.

Ravi Patel

www.patelCFOservices.com

Published in: on June 6, 2017 at 4:47 am  Leave a Comment  
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Make Your Employees Think

Entrepreneurs start businesses because they have new, innovative ideas as a result of “thinking outside the box.” They identify under served niches in the marketplace and find unique ways to fulfill unmet or unrecognized needs.

Do Entrepreneurs, once they start and grow the business, foster the culture of “Thinking Outside the Box” in their employees?

The reason for the Entrepreneur’s original initiative due to creative thinking is also applicable to his/her organization. If the culture of the company is one of innovation and finding unique ways of doing things better and faster, it will promote not only continued success for the company but also tremendous job satisfaction for the employees.

Entrepreneurs should be careful not to create a control-oriented impression that “Thinking Outside the Box” is only meant for them. It gives a feeling of “Do what I say, not what I do.”

Empower your employees and let them come up with creative ways to perform their jobs better and improve processes in the company. Entrepreneurs for this employee performance management philosophy should also think outside the box !

Ravi Patel

http://www.patelcfoservices.com

 

 

Published in: on April 25, 2017 at 4:17 am  Leave a Comment  
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Productive or Not?

Entrepreneurs, are your employees productive? How do you know? Claiming to have good employees is one thing, but backing it up with data is essential.

Do you establish metrics to measure productivity directly based on your annual company goals?  Are the metrics simple and easily understandable? Do you communicate them effectively to your employees? How often do you post or discuss measured results? Are there periodic meetings to analyze performance and develop methods to improve productivity?

“Doing more with less” is a nice slogan, but proving it with productivity measurement data makes it more meaningful.

If you do measure productivity of your employees and do obtain successful results, have you aligned your reward systems to be in line with productivity improvements?

Improving productivity of your employees is a sure way to deliver more to the bottom line. Are you doing that? If not, why not?

Ravi Patel

http://www.patelcfoservices.com

 

Employee Involvement

Is recruiting and hiring good employees enough for Entrepreneurs?

After new employees start work, on-boarding, orientation and making them aware of the company’s Vision, Mission and culture should be a standard part of any hiring process. How many Entrepreneurs do that?

Even if you have a robust on-boarding process, what do you do to keep your employees actively involved in your company?

Entrepreneurs don’t treat working in their company as a “job.” They need to develop that sense of spirit in their employees. Employees should feel closely attached to the Mission of the company such that they view their job in a macro sense – as having a direct impact on fulfilling the Mission rather than just completing assigned tasks.

Offering material rewards for accomplishments works for a while. What is more important is the emotional engagement of employees in the company such that they personally identify themselves with the company’s success (and failures). Finding ways to involve employees in a meaningful way should be a key objective for Entrepreneurs.

Engaged employees are generally happy and productive. Get them involved in your company.

Ravi Patel

www.patelCFOservices.com

 

Progress over Perfection

When someone says “I am perfectionist,” it might sound good, but it is not particularly helpful to Entrepreneurs.

Entrepreneurs have a bias for action and are generally impatient. They need to see the fruits of their invention right away. If they wait to perfect it, they get bored and move on to something else. The market will not wait either – getting it to the market first is the key to the competitive game.

In growing their business, Entrepreneurs should be striving for measurable, meaningful progress on established goals rather than perfection at a point in time. Sustained progress in the correct direction is desirable than perfecting some aspect of the product, process or service without overall forward movement.

An idea that is ninety percent complete and implemented well is much better than something that is not put into practice as it waits to be perfected.

Perfection might be appropriate for artists and scientists, but Entrepreneurs need to be progress driven! Show proper leadership by demanding progress from your employees instead of perfection.

Ravi Patel

http://www.patelCFOservices.com

Rely on Processes

During the initial stages of growth in their new business Entrepreneurs rely upon a limited number of people to know most aspects of their operations. Entrepreneurs depend upon these key people for everything and if someone is not present, it disrupts the operation as no one else is aware of the required details.

For organizations to grow, it is critical to develop efficient, solid business processes. Reliance on an individual or very few people for knowledge of  the procedures to conduct business is quite risky and not prudent.

Solid processes provide the foundation for imparting knowledge to multiple people for understanding the procedures and if properly cross-trained, any one should be able to fill in or step up to perform the necessary tasks as required.

Information on business tasks residing with individuals not only poses a risk, but also eliminates improvements since the individuals have always been doing it the same way and see no need to change. A well-defined process on the other hand allows measurement and continuous improvement from many people to make it even better.

Entrepreneurs should rely on processes rather than individuals.

Ravi Patel

http://www.patelCFOservices.com