A quick set of rules that managers should live by, and be aware of in business. I learned these rules along the path in business. Some were learned the hard way, through the best teacher; experience. Others, I learned in business from some of the very smart people that I had the opportunity to work with along the way. I started to share these with my business students in the class, maybe they can get ahead of the curve following some of the management rules.
1. Revenues must exceed expenses. Every business, every individual, and even government must balance their books. Every entity must earn more than it spends. Business has to take in more revenue and then it sends out in expenses. A simple rule, but one that is often ignored. A business is a model for creating revenue. It is the primary responsibility of every manager, in every business, to increase shareholder value, as profits, so long as it does so fairly and by the rules.
2. No plan survives initial contact with reality. So you need to have a contingency plan, the ability to adjust, and to adapt, as the situation impacts your plan. You can’t plan what your competition will do, exactly what your customers are going to do, what’s going to happen in the market, in the general business & economic environment. Plan your work as best as you can, but have contingency plans in place and be ready to adjust fire.
3. If you’re successful in business, competition will follow. If you find a successful niche for your business, someone will come along a look at this success and think that they can do a better job, they can do it faster, cheaper, or better. Success invites competition, plan for it, be ready for it.
4. When you stop improving, you start dying. When you stop trying to make your business, and yourself better, you start to fall behind, giving the competition a chance to beat you. Continuous improvement is a way of life or business and for individuals. You have to improve in order to continue to succeed.
5. There are two basic truths life: change is inevitable and everyone resists change. Know that; the market, your business, your consumers, are always in a state of change, whether it is slow or fast. And when you bring about change, everyone hates it, your staff doesn’t like it, the market objects, your customers aren’t happy; because everybody’s comfortable with the status quo and uncomfortable with the unknown that is new, that is different, that is change. Know that change is inevitable, and people will resist your new ideas, but you need to move forward and keep on changing.
6. Remember this: when you are done changing… You are through. This is related to # 4 and # 5. Change is inevitable, and businesses need to work through the change and adapt. If you stop changing, stop growing, you start to fall behind.
7. Hire like your life depends on it. It does. Don’t settle for the quick hire, don’t settle for cheap hire, don’t grab the trendy hire, and above all don’t hire yourself, or a yes man. Look for a diversity of thought, knowledge, backgrounds, experiences. An organization can only function as well as its team does, managers need to hire the best team that they can. Don’t be afraid to hire somebody better than you. This makes you better, it does not make you look worse. And if you do make that bad hire, don’t hesitate to make a good fire, pull it off fast, like a Band-Aid.
8. You never have enough money, time or resources. Make the best use of what you have. Managers are always trying to balance effectiveness and efficiency in their jobs. You are using your valuable resources to reach your business objectives. You’re never going to have enough resources, so use them wisely, and quit complaining that you don’t have enough. Nobody does.
9. When you assume, you make an ass out of you and me. Unless you have good data to make your assumptions with. Most business models start with assumptions; assumptions on how much for the cost of goods, how much product can sold for, how much product will be sold, what total expenses will be. A good business model makes good assumptions on all of these numbers. The expression GIGO, or garbage in, garbage out, explains this rule. If you put bad data into your model, you get bad data out. Make good assumptions, putting good data into the model, and if you run the business right, you may achieve rule #1.
10. When there are multiple options to choose from, left to their own, the wrong choice will be made. Don’t make DFD’s-data free decisions. Gather facts and information about the situation, conduct some analysis of what’s going on, develop a set of choices, weigh the pros and cons of each choice and finally make the right choice for the current situation. Don’t go with your gut, check your facts first, then make a decision.
This post is cross posted at LinkedIn.com