2004 Management New Year Resolutions

This article is the fourth in a series covering the hows and the whys of the 2004 Small Business New Year Resolutions published in this space a few weeks ago. In that article I only had room to list several resolutions in seven categories. This series of articles cover why the resolutions are important, and how to accomplish them.

There are so many analogies that can be drawn between being a successful parent and a successful business owner. Just as a parent has to master a multitude of skills, perform a myriad of tasks, and deal with every conceivable human circumstance in order to raise a newborn to self-sufficiency, the same can be said of a small business owner taking his or her dream from start-up to divestiture.

And just as no one article can cover all the particulars of parenting, the same is true of managing a small business. In this article I offer some thoughts on the last six management resolutions I have recommended for us.

Resolution Six: I resolve to begin - or update - my company's business plan, use it as a key management tool, and rely on it as the track my company will run on.

If you don't know where you're going, any road will take you there. This is an old adage, but it's one that we should all have printed on a banner and hang in our offices, if only to remind us that the best road for our business is the one we identify in our written business plan.

Perhaps you're saying you have a business plan, but it's in your head. Fair enough. But there is one big problem with this strategy: You're the only one who has access to your plan. Business plans need to be available to managers, financial and legal advisors, bankers and investors, and that takes paper.

There was a time not too many years ago when creating and maintaining a written plan required no small degree of technical background, plus quite a lot of effort and time. No longer. Today there are computer software products available, at very reasonable prices, that virtually take you by the hand and lead you through the business planning details and process.

If you don't know how to get your written business plan started. Here's the best place I know to get help: www.bplans.com, which is a free site that will show you what dozens of real business plans look like. Check it out and get your plan on paper and working.

Resolution Seven: I resolve to spend a half-day with key employees, at least once each quarter, to review our progress against stated goals.

As essential as you are to your company's future, you can't take it to the winner's circle all by yourself. You MUST have the help of others, which typically comes in the form of managers and employees.

One of the most important concepts for any small business owner to embrace is leverage. In this case, the leveraging of other people's time, energy, and brainpower. You must be able to share your vision for your business with managers. They must be able to help you establish goals that will take you to the winner's circle. Then you and your managers must be able to manage the business in a way that accomplishes those goals.

The only way to insure that the vision and the goals stay on track is to have regular sessions where the company leadership revisits what was said would be done, and compare that plan against the actual performance. With these sessions, and this measurement, you can run a finely tuned organization, moving efficiently toward a common vision. Without them, you've got something that looks more like a goat roping, or a cat roundup.

Resolution Eight: I resolve to demonstrate more leadership myself and foster more leadership in my employees.

Here are five things we know about leaders:

- Leaders are consistent in their behavior.
- Leaders can be trusted to do what they say and deliver what they promise.
- Leaders know that the success of others is important.
- Leaders are courageous.
- Leaders can find people who will follow them.

There are some people who seem to have more natural leadership ability than others, but nothing they do is anything the rest of us can't learn. The most consistent characteristic found in the most successful small business owners is leadership and the ability to foster leadership in those around them.

Resolution Nine: I resolve to become a better negotiator, while continuing to negotiate in good faith.

There is an old adage in poker circles, "When you're sitting at a poker table if you don't know who the mullet is, you're the mullet." A "mullet," in this case, is the one who leaves the game without his money, and without a clue as to what happened.

Every participant in the marketplace has to strive to become an effective negotiator, but especially small business owners. The best way to accomplish this goal is to study negotiating methods, tactics, and behavior, practice by negotiating early and often, and PAY ATTENTION to what's going on around you when you're in a negotiation. Otherwise, you're the mullet.

But being a good negotiator doesn't mean the other person has to lose. The best negotiations are the ones where common ground is found between the negotiating parties. The straightest line to common ground is when the parties are dealing in good faith. This is where you behave consistently, and honor the spirit of an agreement even when you don't have to. Here's an example:

Let's say you and I are negotiating a business transaction that has several deal points. When the formal agreement is prepared, a mutually accepted key point for your side is unintentionally omitted, but the omission is not noticed until after both of us have signed the agreement, which is now legally binding. Even though we both had a chance to read the agreement before signing, and I now have no legal obligation to allow the document to be amended, if I am dealing in good faith, I will make sure that our contract is as we agreed during the negotiations, and allow the omitted point to be added.

It's okay to be a tough negotiator. You should do your homework and conduct thorough due diligence. Absolutely, fight for the best deal you can get. None of this precludes you from behaving consistently, and dealing in good faith. And when you determine that the person on the other side of your deal isn't dealing in good faith, it's usually best to find another deal.

Resolution Ten: I resolve to do what is necessary to eliminate crisis management from the operation of my company.

The best way to avoid or eliminate crisis management is to have a plan, execute that plan, and compare your plan to actual performance. In the beginning, you'll have to learn how to do all of this concurrent with dealing with the crisis of the hour or day.

The key to eliminating crisis management is to have the discipline to deal with problems and challenges before they become a two-ton pound alligator that can take you down. Discipline is required to anticipate challenges, minimize their negative potential, and divert them toward becoming opportunities, while simultaneously dealing with the remaining alligators from your days as a crisis manager.

The good news is that every day that you successfully work your plan while managing the leftover alligators, is a day closer to eliminating crisis management in your company.

Resolution Eleven: I resolve to recognize and value the intellectual property my business owns as I do the hard assets.

In a report by Kenneth Crosin, titled, "Management of IP Assets," he states that in 1978, 80% of a corporation's assets were tangible, such as buildings, equipment, etc., while the rest was in the form of intangible intellectual assets, like patents, systems, and documentation. But as cogs have given way to computers, and motors have been replaced by megabytes, Crosin reports that by 1997, the relative value of tangible and intangible assets had essentially reversed, with 73% of corporate assets being in the form of intellectual property.

Crosin's research focused on big corporations. But I believe this trend applies equally to small firms. The only difference is that big companies have always valued their intellectual property, whatever its percentage of total assets, while small companies typically have not.

In the 21st century marketplace, we have to start identifying and valuing our business's intellectual property assets, so we can fully leverage that power.

Write this on a rock - Being a successful manager, like being a successful parent, isn't easy. Don't try to be Super Manager. Like a good parent, show up every day, focus on the fundamentals, pay attention to details, ask questions, ask for help, and help your people to be successful in their assignments.