This article is an excerpt from the Shortform book guide to "Ready, Fire, Aim" by Michael Masterson. Shortform has the world's best summaries and analyses of books you should be reading.
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Do your managers efficiently and consistently manage your business’s daily operations? Or, do operational tasks constantly distract you from leading your business?
If you have a successful business and want to keep it hitting on all cylinders, you need effective systems. A well-structured management team can oversee these systems, ensure smooth operations, and optimize your business over the long haul. That frees you up to focus on leadership and business growth.
Read more to learn how to set up an effective management team structure.
Effective Management Team Structure
Once you’ve expanded your product lines and increased your profits, optimize your business’s internal systems and procedures. Achieve this by structuring your management team to handle day-to-day business operations. Masterson explains that this strategy improves your chances of long-term success by ensuring that all business functions run efficiently without your direct attention. Such a management team structure reduces costs and increases productivity and profits. It also allows you to focus on pursuing opportunities that fuel the ongoing growth of your business.
(Shortform note: In addition to the benefits outlined above, efficient operations also ensure customer satisfaction, positive reviews, and a reliable source of revenue. Management experts Ken Blanchard and Sheldon Bowles (Raving Fans) explain that customers form expectations based on their past transactions with a business—and they expect future transactions to be just as good, if not better. This means that businesses must set processes in place that allow them to provide a consistent and reliable service—otherwise, they risk disappointing and losing their customers.)
Masterson suggests that you follow five steps to structure your management team.
Step #1
Outline all of the tasks involved in running your business and note the departments and managers who are accountable for them.
(Shortform note: Business strategy experts suggest creating a thorough outline to fully understand your operations. In addition to Masterson’s advice, note the specific people responsible for carrying out each task, what triggers them to take action, and what they specifically do. Interviewing the people involved in each task will help you to gather all of the necessary information.)
Step #2
Group the tasks into operational functions (for instance, accounting and inventory management) and marketing functions (such as market research, advertising, and customer service).
Step #3
Assign an overseeing manager to handle all operational functions, who will report directly to you.
(Shortform note: Business experts suggest that you research the different types of organizational structures and consider factors such as the size of your business, the complexity of your operations, and the industry you operate in before grouping tasks and assigning managers.)
Step #4
Appoint separate overseeing managers for each of your product or service lines. They’ll report directly to you. They should assign their own marketing managers, sales managers, and product development managers. For example, one overseeing manager would appoint a team of managers to handle plush toys, while another overseeing manager would appoint a different team of managers to handle plush toy storage solutions.
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Here's what you'll find in our full Ready, Fire, Aim summary:
- The four stages of development every successful business goes through
- How to structure your management team to handle business operations
- How to effectively market your first product or service
