Monday, 13 August 2012

How self-aware are you about your management skills?

E stands for Enterprise in SME but ‘enterprise’ means more than business.  It stands for initiative; innovation; boldness and creativity.  You may feel you are achieving all these things in your business but they need to be underpinned by sound management practice.  You need something to hold the kite strings.

A research paper entitled Management Practice and Productivity: Why they matter has recently shown that managers are frequently unaware of how little they know about their own businesses in terms of management techniques but the difference between success and failure in business is how well owners manage, and that needs to be taught.  To quote from this paper, “…surprisingly few firms have made any attempt to gain an insight into the quality of their management behaviours.  Those that do so give themselves the opportunity to access rapid, cost-effective and sustainable competitive advantage.”
The best, most innovative ideas risk floundering on the cold slab of reality.  You need to demonstrate an expertise that is hard for your competitors to copy or achieve; a capability that delivers something valued by your customers but something that can also be used to extend into new products or services that require the same skills.  You also need to know how to motivate your staff and encourage them to feel an integral part of the success of the business.

How do you identify your core competencies?
  • Look at your value chain and identify where you add most value from the customers’ perspective
  • Which things would be difficult or impossible for you to outsource?
  • Do you have computer systems or ways of working that help you beat your competitors?
  • Do you have skills or knowledge that are transferable to other markets?
  • Create alternative viewpoints; competencies may appear to be locations or relationships
How do you exploit your core competencies?
  • Outsource or sub-contract activities that are not core so that you can devote more resources to those that are
  • Identify other markets that rely on the same core competence.  For instance, if your business is contract cleaning then viewing your core competence as “managing a low-paid part-time workforce” opens up more possibilities than thinking of your core competence as “cleaning”
  • Select the customers most likely to be profitable to you rather than accepting everyone who approaches you with business
As you learn to master these competencies and how to exploit them, you then need constantly to check their relevance and modify them if necessary – there are many management techniques to conquer but if you succeed, your business will develop more strongly.

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