How to form a management team

Original author: Stever Robbins
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If the time has come to recognize the fact that you are not able to cope with the development of your own business alone, read this guide. It will help to determine who you should take to your team, how to find worthy candidates and how to hire them.

In the early stages of developing their own business, entrepreneurs, as a rule, prefer to cope with most tasks on their own. It is not surprising, because at first this approach is the least expensive and most convenient. However, as the company grows, you will increasingly have to break between a hundred cases. As a result, you will find that you simply do not have time to control the company's operations, sales, bookkeeping, performance of obligations, marketing activities, and at the same time hope for business development.

If you have reached this point, then it’s time to think about the need to form yourself in helping a team of managers. You need to form a team that could control all the main activities of your company and bring it to a new level of development.

To achieve this goal, it is necessary to distribute responsibilities according to ability. This means that it is necessary to distribute responsibilities between colleagues so that they correspond to their level of knowledge and skills. You should not assume that they are your friends, relatives, or just nice personalities. By the way, this rule applies to you too. Do not assign yourself to the position if you do not meet her. Many wise entrepreneurs hire a boss for themselves if they realize that their own skills and knowledge have nothing to do with management.

If it came to hiring a team of managers, you need to find people who can perform the following duties:

Chief Executive Officer (CEO)
The chief executive officer is the main boss who is responsible for everything. He determines the company's development strategy. He hires and creates a team of top managers. His word is crucial in the allocation of resources (read money) of the company. It is his face that appears on the cover of BusinessWeek magazine, no matter whether it is a question of a photo against a jury when settling lawsuits in court, or a picture taken on a huge yacht surrounded by luxury.

The chief executive officer must be able to think like a strategist, be above everyday routine issues, make a decision about whether the industry and the company are developing in the right direction. He should be able to choose the best path, following which the company would be able to carry out its activities in the future. He should be able to make lucrative deals.

But the most important ability that a CEO must possess is the ability to hire and fire personnel. An excellent team of top managers can more than compensate for the director’s shortcomings. The CEO can be able to develop a strategy, predict the future and control the budget, but if he cannot put together a decent management team, he will have to solve all the issues alone. Thus, the chief executive officer must be able to identify and hire the best, dismiss those who do not fit, and skillfully manage the business.

You need to hire a professional chief executive officer if you feel that you are seriously and permanently bogged down in business and will not be dealt with soon. The executive director thinks about the direction in which the organization is moving, what kind of human resources and processes it needs to do this, and how it should function in the current market conditions. If you prefer to engage in specific tasks, rather than the company's development strategy, then you either have to hire an executive director who will do the work for you, or you need to change your way of thinking.

Chief Operating Officer (COO)
The chief operating officer addresses issues related to the daily operations of the company. Imagine that UPS has to ship about three billion packages two weeks before Christmas. The work of the Chief Operating Officer allows the company to deliver the parcels uninterruptedly, day after day. It is this manager who determines on the basis of what indicators it will be possible to conclude that the company is doing well. It is his team that creates a system for tracking these indicators and takes the appropriate actions if the company does not cope with the obligations.

If you own a retail chain within the same region, the store manager will be able to handle the role of the chief operating officer. But if your network starts to enter the market in other regions, or if you need to make a lot of efforts to make the company operate stably, then it's time to hire someone who can fully devote themselves to performance, daily operations and routine issues.

The president
No one will answer you exactly what the president is doing. Dozens of polled executive directors, to the question “Who is the president of the company?”, Gave a variety of answers. Some said that the president’s responsibilities include general management: personnel, finance, strategy, while the chief operating officer is responsible for the organization’s day-to-day operations. Others, on the contrary, argued that the position of president of the company is identical to that of the chief operating officer, especially in small companies. At the same time, some executives argued that the president fulfills those duties that are not related either to the duties of an executive director or to the duties of an operating director. Sometimes a person is appointed to this position who is needed to solve strategic issues, but who, at the same time, will not directly relate to the top management of the company. In any case, you will need to think carefully about whether you need a person who will hold this position, or whether your company will have enough executive and operational directors.

Chief Financial Officer (CFO)
Everything is simple here: the Chief Financial Officer is responsible for the company's finances. He develops budgets and financial strategies; determines what is best for the company: buy or rent. He creates a control system that allows you to track the financial position of the company. The chief financial officer of the company is the “bad guy” who will not let you buy first-class video conferencing equipment, and instead make you pay back the loan. While you are wandering around the office, the CFO will be busy looking for profitable customers, lines of business, products, so that next year you can afford to buy the right equipment.

You will understand exactly at what point in time you need a financial director. If you do not spend the night without sleep, thinking about numbers, then you need to take on the team of someone who is willing to devote himself to this. You need a person who wants to get a calculator or a clean ledger as a birthday present. Money is the “blood” of your company. Cash flow is all about entrepreneurship. If you do not know what the difference is between cash flow and profit, do not go, but run to the phone and look for a good financial director.

Marketing Director (CMO)
In recent years, companies have increasingly begun to introduce marketing experts to senior management, replacing vice presidents with them. This is explained by the fact that most of the “battles” in business are “battles” of a marketing nature. Therefore, the company's strategy depends on the marketing strategy. The marketing director develops a marketing strategy, which often includes a sales strategy, and monitors its implementation. The marketing director will examine your company's field of activity far and wide and help with product positioning and differentiation, make a list of distributors and force buyers to desire your product.

If the success of your company depends mainly on marketing, you definitely need the head of the relevant direction. You can be this manager too, but only if you have time to monitor your competitors, to implement your marketing strategy, and to do all other work, and to do it well. If you do not have time for this, look for a person with a cheerful character, a mobile phone in hand, who knows what will bring the company's success and what will not.

Technical Director (CTO)
Most technical directors are not part of the top management of companies. The technical director should keep abreast of new trends in technology, integrate these trends into the company's development strategy, and ensure that the company keeps technology up to date when needed. The technical director should not buy new “toys” and advanced technologies just because they are the newest and most advanced.

You need a technical director if technology strongly influences the development of your business or industry in a strategic way. And if you are a techie and your company seriously depends on new technologies, then you can be a technical director.

Want to find out if your technical director knows what is the connection technology and strategy? Ask him how the programming language chosen by the company influences its development strategy. Perhaps your technical director thinks strategically if his answer is not reduced to the banal: "It makes it easier to find programmers."

Where to look for candidates
Unfortunately, good leaders do not grow on trees (and you would not want to hire those who grow). Since the success or failure of your business will depend on the decisions of such leaders, you will seek to hire the best. Unfortunately, neither a column with ads in newspapers, nor a board with ads on the Internet will help you. Headings with popular ads attract only the general public; people who have no other job prospects. Experienced managers do not post their resumes in the same sections in which advertisements for the sale of grills and agricultural equipment are published.

If you have available funds, seek the help of executive search agencies. Despite the fact that both agencies rely on their instincts, they conduct the appropriate checks and pre-selection of candidates. Therefore, when you have a need for an appropriate manager, you do not have to waste time on a preliminary search for candidates. Agencies can also search for talented executives in special closed circles and clubs and get involved with candidates you cannot directly meet. Such agencies can specialize in specific industries, functions, regions, levels of positions. So if you decide to hire a manager, make sure that you know who you are hiring.

To find a suitable candidate, you can contact your friends and colleagues. People with whom you have professional and personal relationships know exactly what kind of person you are looking for. Ask to be introduced to the candidate in person, and invite him to dinner to see how he suits you.

If you decide to find a candidate in certain circles, go straight to your intended goal. If you need a marketing director for a law firm, then you should attend a conference similar to the one that Raindance organizes in the field of legal sales and service organization. Such conferences often attract legal marketing executives. Be sure to use connections and contacts in various circles. Just remember that the search must be targeted.

If you have met a good candidate, how to make sure that he can be appointed to the appropriate position? Managers directly affect the employees, structure and profits of the company. Therefore, you should take the time to carefully check the candidate. Call his recommenders and try to hear not only what they tell you, but also understand what was not said directly. The financial director, for example, could have been wasted at a previous job, however, his former employer may continue to claim that “he did his job well” (believe me, such stories happened). In the light of frankly telling stories, you need to hear more than just eulogies. For example, the phrase "Fred came to work and sat down at the table like a real soldier," could mean that Fred likes to leave work on Wednesdays,

How to conduct interviews
If it is time to meet with a candidate for a company executive, try to find out the following:

Make sure that the candidate you choose really knows his job. If a potential marketing director does not see the difference between product promotion and sales, or if the candidate for the position of financial director does not know how the LIFO method differs from the FIFO method, continue your search.

During the interview, try to find out if you can achieve mutual understanding. Answer the question: "Do you trust the candidate?" No matter how talented your interlocutors will be. It is important that the team was not rough. I have come across such stories, when the chief operating officer, fearing to make a difficult decision, tweaked the work of the entire organization under one talented, but extremely arrogant leader, whom everyone despised. And while one was shining with his talents, all the others who were in his environment, he had to suppress his abilities.

Talk to your candidate's former colleagues. Find out how good the candidate’s opinion about himself is with what other country partners and subordinates say about him. Find out if your candidate has done his job and what was his contribution to the company culture. For small organizations, corporate culture issues are no less important than performance issues.

Always try to hire smart people. There is one fairly good rule: “Every new employee of a company should increase its average total IQ.” This means that all candidates should be a little bit smarter than you. And you should put up with it.

Find out how we train the candidate. Will he repeat the mistakes made in the past? Or did these mistakes teach him something and he is ready to apply his knowledge to your company?

During the interview, use methods that allow you to describe the behavior of the candidate. Do not ask questions concerning principles, knowledge, and do not play a game called “what if”. Instead, ask a potential member of the management team to share past experiences. Such stories, as well as possible, will tell you about the values, knowledge and abilities of the candidate. For example, ask a candidate for the post of financial director to tell about how he budgeted, or what he did if his subordinates exceeded the budget and asked for more funds.

Attention! Be careful when inviting friends or family members to work. Close people will rely on complete trust, as well as the fact that you simply believe in their high level of knowledge. Worse, you can really trust them and believe in their abilities until you hire and make sure of the opposite. If you are not careful and do not draw a line between work and friendship, at some point in time you may find that friendships will be buried under the ruins due to disagreements in the workplace.

Once you find a candidate you want to hire, you will need to somehow convince him to join your team. There is no single rule to follow in this case. Employees with time-wages would certainly be seduced by the size of the remuneration. With heads everything is much more difficult. They tend to count on company shares, high fees, and annual or even quarterly bonuses. Since the management's task is to lead the company to success, stipulate right away that the high fees and the right to purchase shares will depend on how effective the work of the company as a whole will be. While premium payments and profit sharing should be based on results achieved,

Of course, not all executives want to receive company shares. Undoubtedly, and you would like to hire such a person who would be happy to have the opportunity to do your favorite work and a modest salary. And believe me, such people exist! There are those for whom it is important to spend time with the family, or who are simply interested in hard work, or who like to be part of a team that is trying to change the world. The better you understand the motives of each individual candidate for the post of leader, the more lucrative a deal you can make.

One tip. Whichever proposal you make to the hired manager, formulate it easier. Believe me, you will not interest anyone with bonuses calculated by the formula that only the doctor of science in mathematics can handle.

Delegation of responsibilities to new managers
Once you have a management team, it will be time to distribute the responsibilities. Your inner voice will argue with you on every occasion. It will seem to you that your instructions are clear, and that it is your colleagues who do not understand you. In moments of disagreement, it will seem to you that you are right, and the leadership you hired will not. But, at times, and you will be mistaken. The secret to a successful relationship between managers is that you should change your inner voice.

Remember we said that during the interview you need to be able to understand, can you trust the candidate? Trust is very important, because as soon as you hire a management team, you will have to delegate to them their authority and work together. This means that you must agree with them about what roles they perform, what they will be responsible for and for how long.

It is also important to decide in advance how you will resolve disputes. You hire a certain person because you believe that he is more competent in specific issues than you. And if you have made the right choice in favor of a certain candidate, but do not agree with him, most likely you will be wrong, not your colleague. Discuss in advance how you will resolve contentious situations so that you can benefit more from constructive conflict. But just remember, if you agree with everything, one of you will definitely be superfluous.

Entrepreneurial activity involves the achievement of such heights with which you could not cope alone. Your task is not to reach the goal, but to form a team that will reach it. If you really want to cope with the tasks, you need to bring to the work of competent people. And building a good management team involves understanding what these people need to do, how to find successful candidates, and how to give them what they need to fulfill their responsibilities. If you choose the right people, they will become successful and lead to your success.

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