How Smart Managers Drive Profits

How Smart Managers Drive Profits


The mark of true entrepreneurial success is an owner who is free to work on their business instead of in their business. Yet for many, this is a goal that constantly shimmers on the horizon.

Every business reaches a point where the up-skilling and development of employees becomes crucial to business growth; a point where an effective management structure must be put in place.

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In 2000, Daniel Goleman conducted a landmark study for the Harvard Business Review entitled Leadership That Gets Results.

He discovered that a manager’s leadership style can be responsible for as much as 30% of an organisation’s bottom line profitability.

I believe that a careful selection of candidates, coupled with the correct guidance and nurturing, can translate into an effective management team.

By remaining hands-on during the training and coaching process, it is possible to build a team that will not only strengthen your industry footprint, but will do so with your attention to detail.

Effective management


Most entrepreneurs go through a stage where they wish for a cloning device. Some never grow out of it. But it’s the process of natural selection within the business world that sees others grow stronger and larger.

The common denominator in businesses that survive and are successfully competitive, is an effective management structure, which to the savvy entrepreneur far outstrips cloning!

An effective management team can be coached to adopt your strengths as a leader, and should be made up of carefully selected individuals who counteract your weaknesses.

Selecting the right people to lead is key. The best sales or admin person may not necessarily be the best manager.

Build the team around people who not only have the ability to be strong managers, but want to manage and lead.

These are individuals who are prepared to accept responsibility for their team’s work as well as their own. Strength must lie in time management and focus.

These individuals should be decisive in their handling of daily operating decisions, while not being afraid to make an unpopular decision should it mean the best for the business in the long run.

This being said, there must be a balance. Managers should be able to overcome obstacles without delegating things upwards, but also know the edge of their competencies, and not be too proud to ask for advice. 

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How to build your team

In my experience, there are three key practices you need when building a management team.

Initially, you as the entrepreneur must clearly communicate each manager’s role and duties, as well as the standard at which you expect these duties to be completed. Thereafter, this should be regularly re-visited to ensure your vision and high standards become the norm.

Next, delegate the responsibilities and duties by following a development plan for the learner manager or management team.

This is an important part of the plan – it takes time, but pays off handsomely in the medium term. Often in the absence of a management development plan entrepreneurs revert to doing it themselves when managers or teams make an error. Do not fall into this trap.

Schedule regular, positively-framed feedback meetings for the team and individual managers to address how well they have done, how to improve and ways in which managers could inspire, motivate and build their team members.

As the owner of the company, it is important not to assume that a new manager will immediately be as effective as you were. Set a realistic time frame for them to develop into their role, remembering that you took time.

Guide each new leader manager, set aside time to nurture the culture of your company. Manage problems by establishing the best way forward and recapping what went wrong, keeping emotional content to a minimum.

Be factual and calm when addressing problems. Though management must be held accountable, remember you are in a process of building people, and people respond to objective, kind and accurate feedback.

Creating resilience

A strong management structure is not only healthy for a business, but it also allows the entrepreneur to work on the long-term strategic issues of the business, while making succession planning easier with accountable, responsible and effective people already in place.

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With an effective management team in place, if the owner wants to take time off or even sell the business or retire, they can be confident in a team of well-rounded leaders who know what they are doing.

The mark of a good manager

Good managers will display the following traits:

  • Aren’t necessarily great at sales or admin, but want to manage and lead
  • Are prepared to accept responsibility for their team’s work and their own
  • Are decisive in their handling of daily operations, and aren’t afraid to make unpopular decision
  • Are focused and manage time well
  • Should know their competencies and not be afraid to ask for help.
Neale Roberts
Neale Roberts, a founding member of Mentors, has impressive executive, entrepeneurial and consulting experience. He is a qualified assessor and moderator who has taught strategy and leadership at various international business schools and on leading executive MBA programmes. Neale also acted as CEO of the team (Bond University) that won the coveted 2nd place spot in the 1998 NasDaq SDSU 'International Student Business Plan Competition', beating both the Harvard and Stanford teams. This expertise, coupled with many years of business experience, enables Neale to successfully facilitate the development and implementation of practical business strategies that work.