I've come to think of good small-business management as a lot like steering. Steering requires constant small corrections. Even on a straight highway, your steering wheel is always moving as each small movement corrects the last one. We never just glide straight.
The idea of steering applies to real business management too. It's hard to make daily details match the big strategy. Even with strategy in place, and milestones and metrics laid out, it typically takes regular review and revisions to make sure the focus and priorities in the strategy flow down into the daily details.
It can be a problem for a lot of businesses: They don't do the frequent corrections required. I dealt with a local computer business whose strategy was to position itself away from big-box competition by offering much better service and—according to its branding—"peace of mind" to local businesses. But it didn't sell peace of mind by bundling installation, software, training and service into its prices. It didn't offer attractive ongoing service and maintenance contracts. It didn't proactively contact customers for regular upgrades. And the finance department was hassling late paying customers without realizing that they were late because of poor installation or equipment not performing as promised.
What I call steering is often the missing link. If strategy is the destination, and the milestones and metrics are the route, it may still take the detailed management of the steering to actually drive from one place to another. In business, the steering is in the tracking, review and corrections of people, tasks, metrics and expected results. And it's often less obvious, and less dramatic, than the big picture. It often takes the discipline of details and consistency over time.
Following Up on Metrics
Steering as management typically starts with performance metrics. The obvious ones may be sales and sales targets, and expense budgets, measured in money. Consider creative metrics based on strategic goals, such as time on calls, seminars held, leads generated, presentations, trips, support incidents and so forth. I believe that the best metrics are objective numbers that the people involved can see on their own, track and manage. People have to know what's expected of them.
Having the metrics laid out, however, may not be enough. Following up with tracking and review is often vital. Many people like to work towards goals they can track, and may do better when somebody tracks their performance and gives positive strokes when performance is good and collaborative corrections when it isn't.
Monthly Reviews
I recommend a monthly review meeting (we called it the "plan vs. actual" meeting) on the third Thursday of every month. To take less time, consider a lunch meeting of no more than an hour or two. Make it clear to your team that this is important. Having a regular schedule means people may be less likely to miss the meeting.
You could start your meeting by reviewing your main assumptions to identify what's changed. Assumptions may change fast and your plans and performance will likely change with them.
Next, consider reviewing the big picture strategy and the main milestones. It's often hard to keep priorities in mind during the day-to-day detail.
And then consider tackling the performance metrics and review. You might share numbers with the team. Compare what your team expected to happen to what actually happened. Praise and reward good results. Discuss the bad results. Make plans to correct and prevent bad results in the future.
If you don't adjust metrics to changing assumptions, then you may risk losing credibility with the team. For example, with that computer business, when a local trade show was cancelled, the marketing manager brought up the problem in the monthly meeting two months ahead. Expectations were adjusted. Team members learned that tracking their performance may help them steer and correct their course, and is not done to be an axe over their heads. It's to define goals, not to create a threat.
Plan vs. Reality Is a Management Opportunity
Every significant difference between what was expected to happen and what actually happened may be an opportunity to steer your business better. Dig into the causes. Take missing sales goals, for example. Were the goals unrealistic? Were they based on assumptions that changed? Did the sales and marketing activities happen as planned? Beating an expense budget by spending less may not always be good news. Under-spending the budget may be a sign of not executing planned activities. It's not just a number, it's a window into the performance behind the number.
There's an old military adage that says, "No battle plan ever survives the first contact with the enemy." The chaos of real life and the inertia of regular routine may rub the edges off of new ideas in organizations. It’s rare that things go as smoothly as planned, so revision is often necessary. It takes defining a destination, tracking your route and steering.
This article was originally published on February 26, 2015.
