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Basic management skills are necessary to run a small business. Some business owners believe that leading vs managing is most important. In reality, you need to be able to both lead and manage.
What makes a good manager? There are definite business management styles and skills to focus on; specifically for small business owners. If you’re the owner or manager of a small business, it’s important to understand what those basic management skills are and to try to incorporate them into your own behaviors. Why? Because some skills are more successful than others and because some styles will engage your employees, while others will dis-engage them.
Business management skills such as planning, decision making, problem solving, controlling and directing, and measuring and reporting are needed for the daily operation.
Using their small business plan, effective managers direct the business operation. Communications, benchmarking, tracking and measuring are tactics and strategies that they use to check their direction, to adjust the plan (if necessary), and to move the business forward. Good managers act to achieve the desired results; and they manage people and resources to get where they want to go.
Understanding what makes a good manager, means understanding what motivates employees. How do you build an environment and culture that encourages employees to participate? How do you increase employee productivity and employee satisfaction; simultaneously? How do you recruit the best talent, and then keep them? How do you train your staff to solve problems, make decisions, and involve others in the process? These are just some of the challenges, and responsibilities, of managing.
As a manager, you need to understand what the common business management styles are (autocratic, paternalistic, democratic, and passive are the most common styles). And you need to understand what your style is, and how that style affects business results.
Four Business Management Styles:
- Autocratic: The manager makes all the decisions; a “command and control” (militaristic) management style. Focus is on business; doesn’t want any personal ‘stuff’ to get in the way. The benefit is that decisions are made quickly. The cost is in high employee turn-over as employees find this style difficult, and stressful.
- Paternalistic: The manager makes all decisions (or most of them) but focuses on what’s best for employees. The benefit is that employees feel the business is taking care of them. The cost is that employees don’t take care of business – they are uninvolved and have little at risk.
- Democratic: The manager wants input from the whole ‘team’ and majority rules. Often good decisions are made and employees feel involved in the business (the benefit to this style) but the process is very slow and you can’t always make everyone happy.
- Passive: The manager abdicates responsibility to the employees; and calls it delegation. The benefit is that employees often step forward and learn in this environment. The cost is that the direction is scattered and there can be numerous false starts because there is no real manager.
Managers typically use more than one style, depending on the situation. If brainstorming creative new product ideas is today’s focus, then the manager may want to use a democratic or passive style. If a decision about keeping or firing an under-performing employee must be made, the manager may need to use an autocratic or paternalistic style (hopefully not a democratic or passive style).
In most small businesses, the business owner is also the manager and the leader. In your business, make sure that you have a good understanding of your own business management styles, skills and qualities and learn how to control them and use them as necessary.
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