Having Too Many Cooks

You might have heard of the common saying “Too many cooks spoil the broth.”

Is this always true in an Entrepreneurial company? Not really.

For any major project, such as new product/service development, IT hardware/software selection or implementation, or building expansion, it is critical to have input from multiple sources to come up with the best specification for the new project. This type of diligence up front ensures that most ideas are considered and there is no critical issue of “second-guessing’ later on. The specification should not be a hodgepodge of ideas, but a solid framework that takes into account (though not necessarily includes) different viewpoints.

Once the project specification is defined, there should be minimal changes and the project management should be delegated to responsible staff without micromanaging by “too many cooks.”

Entrepreneurs need to know when to have too many cooks involved in a project, and when not to.

Ravi Patel

www.patelCFOservices.com

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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

Doing the Right Things

Entrepreneurs often complain that they don’t have enough time. This isn’t about traditional time management!

Instead, think about time management in another way. If you don’t have time to get things done, are you actually doing the Right Things?

Entrepreneurs, especially early in their careers, often have a tendency to not only do everything themselves, but also focus on doing tasks right – whether they are important or not!

The focus for Entrepreneurs should be to define and do the Right Things and delegate the rest. Once you discover and focus on the Right Things, you will probably have more time to do them. Wasting time on things that Entrepreneurs like to do, being perfect on insignificant tasks, or not delegating steals time from more important things to do for your business.

Do the Right Things!

Ravi Patel

http://www.patelCFOservices.com

 

Encourage Thinking

Entrepreneurs generally “think outside the box” and come up with new, innovative ideas. They seek under-served niches in the marketplace and find unique ways to fulfill unmet or unrecognized needs.

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

An 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 employees.

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

Ravi Patel

http://www.patelCFOservices.com

Thoughts for Entrepreneurs

A few management thoughts from past experiences:

  • Avoid overreacting to situations where there is employee dissatisfaction, customer or vendor complaints. Calmly analyze the situation before taking appropriate corrective action, instead of taking hasty actions due to external pressure
  • If you need to make a statement or convey a message regarding any irregularities in your company, do it for significant issues not trivial ones. If you mostly emphasize minor matters, your employees are going to dismiss such gestures.
  • Do not focus on the minor issues in managing your companies; focus on the larger or macro issues for greater impact. Let your management team manage the details.
  • If you do have a serious situation, do not create a smokescreen and divert attention away from it to hide the real problem. Be honest and you might be surprised at the support you get.
  • Be sensitive to the message that you send with your actions. If you are being austere or are having cost reduction programs, do not have bonuses or spending that is contrary to the current environment in your company. Having incentives is not inappropriate, but make sure that they are related to the right objectives and are perceived positively.

Things to ponder as you manage your companies …

Ravi Patel

http://www.patelCFOservices.com

Published in: on April 26, 2016 at 4:05 am  Leave a Comment  
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Managing Your Cash Flows

Cash flow management is the most critical factor in an Entrepreneur’s ability to successfully grow a business. Yet more often that not, Entrepreneurs react to cash flow problems rather than actively managing this area.

Entrepreneurs need to ask themselves what metrics they are using to monitor cash flow. Are these the appropriate measures? How timely and useful are such metrics?

What type of tools are Entrepreneurs using to manage and more importantly increase the available cash in their business? Are these tools continually refined to make them effective?

Entrepreneurs would be better served to proactively manage their cash flows, or at least monitor this important area if such management is delegated to others in their organization. Don’t ignore cash management or it could become a critical issue for your business.

Ravi Patel

http://www.patelcfoservices.com

Published in: on August 25, 2015 at 4:10 am  Comments (2)  
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Should You Promote From Within?

As Entrepreneurs build their management teams, they are often posed with a dilemma – should open positions be filled from within the organization or should they hire from outside? This is a crucial issue.

The pressing needs of the company have to be balanced with motivating, developing and rewarding high-potential individuals internally.

A good philosophy is to identify, train and develop loyal, internal people for the long-term management team of the organization. This is what I call Entrepreneurs “Doing the Right Things.”

However, when a company is on a growth path, all the necessary skills to build the company might not be available internally. In these situations, knowledgeable and experienced executives should be hired from outside to fill the void.

This dilemma can only decided on a case by case basis depending upon the specific situation. Formulating an optimal balance between internal promotions and external resources is the blueprint for long-term human capital management for Entrepreneurs.

Ravi Patel

www.patelCFOservices.com

Published in: on August 18, 2015 at 4:38 am  Leave a Comment  
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Entrepreneurial Independence

Just having celebrated our nation’s Independence Day, a few thoughts on Entrepreneurial Independence.

Entrepreneurs start their own businesses primarily for two reasons. They either believe that they have a better product or service, or they do not want to work for anyone else. The latter is born out of a desire of having their own independence.

As they grow their companies, Entrepreneurs lose their independence because they cannot effectively manage their businesses and/or get into a financial bind. In such cases someone else has to come to lead the company or exercise financial control (through investors or lenders), depriving Entrepreneurs of their independence.

How can Entrepreneurs maintain their independence?

First, understand one’s limitation in managing the business and build an effective management team to adequately complement the Entrepreneur. An enlightened Entrepreneur might even have to hire a CEO or COO to lead the operations of the company while the Entrepreneur focuses on his/her core strengths.

Second, pay attention to the financial strength of the company. Manage the growth and cash flows effectively such that lines of credit and borrowing are sufficient so as not to dilute equity. Even if equity capital needs to be raised, go for it when the value of the company is high enough so that the Entrepreneur can retain the majority stake.

Entrepreneurs can maintain their independence, but they have to work at it.

Ravi Patel

www.patelCFOservices.com

Published in: on July 7, 2015 at 4:15 am  Leave a Comment  
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Involving Employees Effectively in Projects

“Too many cooks spoil the broth” is a common saying that many people have heard.

Is there a time to have too many cooks – employees –  involved in a project in an Entrepreneurial company? Absolutely.

For any major project, such as new product/service development, IT hardware/software selection or implementation, or building expansion, it is critical to have input from multiple sources to come up with the best specification for the new project. This type of diligence up front ensures that most ideas are considered and there is no critical issue of “second-guessing’ later on. The specification should not be a hodgepodge of ideas, but a solid framework that takes into account (though not necessarily includes) different viewpoints.

Once the project specification is defined, there should be minimal changes and the project management should be delegated to responsible staff without micromanaging by “too many cooks.” This is not the time to have too much employee involvement, but limited a designated few to spearhead the implementation.

Entrepreneurs need to know when to have too many employees involved in a project, and when not to. Do the Right Things!

Ravi Patel

http://www.patelCFOservices.com