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Synopsis of the book
In this book we deal with the job of managing business growth successfully.We do
not accept that growth (or rapid growth) is a foregone conclusion, even when there
has been growth in the recent past. Markets can change rapidly and customers
can be fickle. Each situation needs to be examined and the decision to grow or
not to grow taken on its merits. Monitoring and assessing business performance
and periodically evaluating existing strategy and future strategic options are crucial
activities for directors; leading and managing people to implement the chosen
strategy effectively and efficiently are crucial activities for managers. The following
ten chapters tackle the fundamentals of directing, leading and managing a growing
business: setting business strategy and getting performance from people.
We begin in Chapter 2 with business strategy, on the grounds that everything
else follows the lead question: ‘in which direction should the business be going?’ By
‘direction’ we mean the market segments into which you choose to sell and the mix
of products and/or services on offer in the chosen markets. We examine strategic
options and techniques for making defensible choices that produce the optimum
strategic fit between markets and organizational competences, thus ensuring that
managers have every chance of implementing the chosen strategy profitably within
planned financing limits.
We follow with further market-related issues in Chapter 3, which deals with dayto-
day marketing and sales decisions. This involves more than merely advertising
and printing brochures.What frameworks are available to ensure that you can meet
the needs of your customers effectively and efficiently? How can you communicate
effectively with your chosen markets and generate profitable leads? This chapter
also deals with the development of a complete marketing function that includes
the usual promotional and website roles as well as the increasingly vital ones
of gathering market and customer feedback data, competitor research, product
development and customer care.
Chapter 4 provides a general outline of organizational design and development.
Effective and efficient organizational change is at the core of successful business
growth – managers need the skills of diagnosing organizational problems accurately
to ensure that proposed changes will align structure, people, processes and systems
more closely with the existing and emergent needs of customers.
Having put in place the right organization to deliver the strategy, in Chapter 5 we
discuss the management skills required to get teams of people to perform their tasks
effectively and efficiently. Once overall corporate objectives are communicated to
team leaders, they in turn can brief their teams clearly, set achievable goals for individuals,
monitor progress towards these goals and provide constructive feedback
on achievements. These, with an understanding of motivation and demotivation,
are the essential skills of managing people at work.
Managing people effectively and efficiently requires much more than these
essential skills, however. In Chapter 6 we discuss the role of the leader who
understands delegation and who can apply the ‘situational leadership’ model
to teasing out superior performance, thus distinguishing ordinary teams from
excellent ones. Striking the right balance of contributions to team performance
through specific team roles (and recruiting for these roles) is one aspect of effective team leadership; another is building and developing the team through
performance appraisals.
Few growing businesses thrive without the ‘magic’ in their culture that sets
them apart from competing organizations. Chapter 7 deals with the beliefs and
assumptions held by people about their organization: the way they do things that
is different to their competitors. Small, dynamic, growing organizations have a
special aura about them – a ‘can do’ culture – that initially sparkles without much
explicit burnishing by managers. Yet these special features can go unrecognized
and therefore be neglected in the dash for growth, with unintended damage to the
human fabric of the organization.
Moving from the human side of enterprise to the financial side, Chapter 8
explains profit and loss accounts, balance sheets and cash-flow statements, not
from the standpoint of the accountant but rather from that of managers faced with
making the right business decisions; every decision has a direct or indirect impact
on profitability and cash flow. So managers should understand clearly where and
how profits are made and how effectively finance is used in their business. To
this end, we analyse the accounts using common financial ratios, applying them to
day-to-day as well as strategic decision making.
Chapter 9 deals withmanagement information systems and financial controls: the
systematic provision of financial, market and operational information for effective
decision making, and the controls needed to ensure that financial targets are met.
The quality of internal information is usually poor in growing businesses, and none
so poor as profitability data on individual customers, market segments, projects and
products. The emphasis is on practical information systems needed to monitor and
manage the business and on the fixed and working capital controls needed to make
efficient use of available long- and short-term finance.
Bringing it all together is the theme of Chapter 10, which introduces the essentials
of strategic and operational business planning. The pressure to produce business
plans with ever-increasing complexity is immense as the business grows, although
given the rate of market change, the powerlessness of the small business and the
lack of high-level management resources to implement plans, it is understandable
that plan nowadays is considered an undesirable four-letter word! Our treatment of
the topic is entirely practical: plans can be useful documents, but they must meet
certain minimum standards. We provide examples of the different types of business
plans in the appendices.
Our closing words in Chapter 11 are devoted to the hazards that lie innocuously in
the path of the unsuspecting founder-director or key manager. Whether appointing
a successor, dealing with nepotism or seeing off the ‘sacred cows’ of business
growth, it is important to recognize them as potential obstacles to progress and
to confront them head on by examining alternative options and making decisions
based on an informed choice.
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