Many businesses are driven by passionate people who rely on their own skills to develop their enterprise from a good idea into a reality, but after starting up, the entrepreneur may find that just being driven isn't enough
In order to maximise the full potential of his business the entrepreneur needs to develop skills in areas where the business lacks strength.
Ian Reid of management consultants Platinum Black says that in planning and implementing effective business systems for clients and restructuring businesses to turn them around, his company uses a successful concept called The Seven Hats of Management.
The "hats" referred to are operations, marketing and sales, administration and finance, human resources, information technology, research and development and management.
"Every business has a strength in one or more of these hats, but for an effective business structure, all the hats must be addressed on a monthly basis by people within the organisation," says Reid. Having been consultant to over 360 companies, Reid believes the key to business success is to create practical systems that are sustainable, in collaboration with the client.
He says that while clients may see quick results after a management consulting intervention, the systems Platinum Black uses are not quick-fix solutions. It is essential that the client and all his staff apply the systems and work with them on an ongoing basis.
Systems provide infrastructure, says Reid and infrastructure ensures security. "The end goal is to ensure that the client's company will be self-sufficient to continue and grow on its own."
Reid believes that one of the benchmarks of a successful management consulting intervention should be its brevity. Platinum Black's policy is to assist with decision making and implementation of business systems within a given time frame - ideally three to six months - and then exit once the business has stabilised.
Marketing and sales professional O'Brian Barber, who owns a small company, O'Brian Barber Promotions, called in Reid's company for assistance in 1994.
"Although we appeared to be trading well and sales were growing, we were experiencing cash flow problems," says Barber. "One tends always to look at turnover, but too small mark-ups were killing my company. Although I did a brief stint as a B Com student, my main focus was sales, which is my strength, and I had to learn management skills."
Barber says that Reid, a mining engineer with a B.Comm and an MBA, looked at the practical aspects of his business, not only analysing the bookwork, but also looking at the strengths of his staff to ensure that they were ideally placed. Barber then worked with them "to change bad habits".
The systems Platinum Black implemented were easily sustainable, says Barber. "When the systems were implemented we saw results, some instantaneous."
Highly satisfied with the difference Platinum Black had made to his business, Barber has retained its services and regularly consults with Reid to take corrective action in problem areas.
Reid says: "I tell our clients to think of us as an objective, outsourced MD. I enjoy the challenge of showing the client the path forward."
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