SME Owners: How you can manage performance effectively

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People do what you inspect not what you expect.

As an SME owner or leader, managing and measuring performance is an essential element to building a successful business.

Those of you who read the leadership article will know I advocate that the key role of the leader is to influence behaviours, set the cultural tone and establish the strategic direction.

Once this has been done it needs to be constantly monitored by regular and consistent review. The review process should be a formal event within the monthly calendar of meetings. This is so it is given appropriate importance and becomes an integral part of the company’s culture and behaviour. The review then acts as a regular inspection as to whether the senior managers and other staff are delivering against the objectives set – both tangible and intangible.

By undertaking regular inspection, your team and staff will realise that what is set out by the leadership and ownership group are not just headline strategic goals but genuine and serious objectives.

Interestingly, performance management is the leadership practise which brings numerous factors together. Regular inspection and formal reviews will themselves be part of establishing behaviours and setting the cultural tone of the business.

If you as a SME owner or leader do not take managing and measuring seriously, why should your team be expected to do so?

Incentivising staff is intrinsically linked to performance management.

If you have managed to align your key staff incentives to stakeholder goals, as I described in our incentivising staff article, it is much more probable that they will be motivated to demonstrate to you how successful they have been. This makes managing performance much less of a chore. In fact, it creates an environment whereby top performers look forward to the opportunity to show to you how valuable they are.

A formal review process should be easily projected up and down through an organisation so that every manager is both reviewing his or her staff while being reviewed by their line manager or indeed by yourself. Depending on the core responsibilities, the inspection of performance can focus on the most important metrics. For example, sales activity or customer management.

Establishing an effective performance review takes commitment from the leadership group so that it becomes a meaningful and worthwhile investment of time for both staff and managers. It should be a constant process and provide a two-way dialogue between leadership and management. It is your job as the SME owner or leader to ensure that your team can comment freely without fear of being penalised. Importantly, embedding a consistent review process enables a leader to understand how the team are operating and quickly identify areas that need attention or provide an opportunity for enhanced growth.

Look out for more articles like this

For any SME owner or leader, managing performance effectively starts with getting visibility. See how our Sales Visibility Service can equip you with the principles you need to achieve real sales visibility of your sales position.

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About the Author

Neil Barron
Neil Barron is the Founder and Owner of BMC. With over 20 years of experience, he has an impressive track record of supporting business leaders, managing change and accelerating growth.

Neil established BMC in 2004 to support businesses at key stages of their development, particularly turnaround, growth and exit. BMC helps businesses achieve their goals through a range of specialist Leadership services.

Neil works closely with the BMC team to transform businesses and drive value for stakeholders. He also acts as an advisor, investor and non-executive chairman.

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