Why Do Companies Frequently Under Manage

Entrepreneurs are wired differently than most, often “painting outside the lines,” seeing things others don’t. But their vision, creativity and drive can come with a cost. They under manage and most don’t manage their companies or themselves well.

Under managed companies struggle with execution, cultural healthiness and sustaining gains. This concept applies equally as well with many executives in more mature businesses. Why does this syndrome exist, particularly among entrepreneurs?

• Strategy-setting and visioning can be more interesting than the “everyday management stuff.”
• Disdain: it’s harder to muster energy for “unfun” things—holding people accountable, establishing effective processes, etc.
• As businesses progress beyond startup, the founder may continue as “master inventor” or spend all of his/her time in the future.
• Many entrepreneurs never learned how to manage; some are strong individual contributors/doers who simply don’t work well with or through others, more effective as “lone wolves,” “technicians” or “dictators.”

In the “Do, Manage, Lead” work progression, many favor doing and leading while avoiding managing, e.g., making sure that the doing happens effectively, that “right things”—established by strategy—get done the “right way” sustainably. Ineffective management is one reason why 90% of companies do not execute their strategies well. Since strategy is useless unless a company executes to it, the common entrepreneurial “under-managed company” syndrome leads to failure. There are four steps leaders should take to build strong management practices:

• Establish strategic clarity and communicate to all stakeholders. The stated strategy should frame up answers to the “What impact are we prepared to be held accountable for?” and “What do need to do—and not do—in order to achieve this impact?” questions, while reinforcing company mission and vision.
• Anchor the strategy key metrics to help employees track “How are we doing?” and enable self-management and accountability.
• Align the leadership team around company core values, while applying #1 and #2 above. Such alignment is reinforced by having them work together assessing employee performance and potential.
• Establish objectives throughout the organization enabling #1, including metrics from #2, while guided by the core values of #3.

Think about the following questions:

• Do thinks get done if you aren’t personally involved?
• Is your company good at executing strategy?
• Is your culture one of accountability?
• Do your people know your strategy and is it current and meaningful?

If your answer to any of these questions is “No” or “I am not sure”, then you may want to reconsider how you and the management team lead the business.

About the author:
Steve Sharp is a senior consultant with Group50^® Consulting and heads Group50’s Strategic Execution practice. Steve and the Group50 team are all former executives with well-known manufacturing and distribution companies who understand what it takes to put together and manage the implementation of a successful strategic plan. Group50 has designed a series of strategic assessments, workshops and strategic execution tools that drive successful business performance. Call us at (909) 949-9083 or send a note to info@group50.com.

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