Two Key Words To Small Business Success
October 19, 2017
An athletic team has a coach. An airplane has a pilot. A ship has a captain. An international corporation has a CEO. The military has officers. A motion picture has a director. A doctor leads a surgical team. As you think about each one of these situations, what two words do they have in common?
Oversight and Involvement
For any organization consisting of people, there must be oversight and involvement. This holds true for small businesses and SMEs, as well. Small businesses do not automatically operate on their own. Whether there is an owner or designated manager, someone with decision-making authority must have general oversight and be involved.
Without adequate supervision, both major and minor details of a business are overlooked. Although employees are expected to do their individuals jobs, little more is usually accomplished than what is required. We’ve all heard the expression, “That’s not my job.” When everyone has this same attitude, it is little wonder that businesses without proper supervision do not run efficiently.
Even though employees might be supervised to ensure assigned job functions are performed as required, there is more to adequately supervising employees than just “checking off” that certain tasks have been accomplished. There must also be involvement. An owner or manager must be involved with employees…participating with them, knowing what they are doing, and relating to their thoughts and attitudes.
Successful Businesses Have Commitment
Absentee ownership or management does not make a business successful. Regardless of the type of business, owners and/or managers must be involved. Whether the business is in the retail or service sector, manufacturing, or even a professional office (medical, dental, law, etc.), someone must be in charge and take responsibility for business outcomes…the buck stops here. Take a look at successful small businesses and those not so successful. A common denominator for successful businesses is oversight and involvement by owners and/or managers.
Someone is at the business seeing the operations first-hand, observing how customers are treated, and if the premises are being well maintained. Involvement means talking and listening to employees, motivating them, and making them part of the team. It means letting customers, clients, or patients know they are appreciated. Involvement also means having facilities where employees are proud to work and customers (if they visit the business) know the business takes pride in all facets of its operations.
A Fallacy of Ownership
It is often a fallacy of small business ownership that a business can operate by itself with little or no involvement from the owner. Owners start a business, hire employees, and expect success to be a natural byproduct. Of course, if small business success was that easy, failure statistics would be quite the opposite from where they are today. It is estimated in the U.S. that 70% of new businesses started will still be operating in three years; however, only 50% of new businesses started will still be operating in five years (statistics can vary depending on the research study or article reviewed). In many countries other than the U.S., the failure rate for small businesses and SMEs is thought to be even higher.
Many studies on small business failure list leadership as one of many factors contributing to the high failure rate of small businesses. Lack of leadership is one key element. Lack of oversight and involvement is still another factor and different than simply lack of leadership ability.
When owners of a small business have direct oversight and involvement, businesses operate more efficiently and customers are very likely to be more satisfied. Regardless of the type of business, owners must take responsibility for the action or lack of action by employees. Lack of time cannot be an excuse. Distractions cannot be an excuse. A poor manager cannot be an excuse. There can be no excuses!
The bottom line is that owners simply need to be involved in their businesses and have general (not detailed) oversight of the business operations. It becomes a matter of results. Does an owner want to see an efficient and profitable business? If so, oversight and involvement are key factors that cannot be lacking.