Small Business Management – 2 Tips for Effectively Leading Employees

Small Business Management - 2 Tips for Effectively Leading Employees

In the current Lean Start-Up culture of small-scale businesses, the primary idea that is shared by many business owners and operators is the necessity to produce goods and services of the highest quality and production rate that satisfy the needs of the market. In reality, adhering to these principles improves the likelihood of a company to see a significant increase in profits and revenue growth as well as a growing market share. Most of the time, the results are coveted very much by small business owners. However, they also carry a significant business risk as a result of mismanagement by employees.

The element of labor for any company easily accounts for at minimum 30% of the overall cost structure based on the model of business employed (i.e., manufacturing, retail, service). Therefore, management focuses on its surveillance and control of this component of cost to ensure proper harmony and alignment with output levels and the market demand. However, in doing so, employees are frequently thought of as part of the business’s production cycle instead of being human beings. Management’s tendency to view and manage employees as objects instead of individuals can result in adverse effects on the company both in the short and long term.

Small-scale business owners can learn and should be taught to “lead” instead of managing their employees. Webster’s Dictionary Online defines management as “the action or process of deciding on how to utilize the resources of something.” Since the majority of small companies consist of less than five employees, including the owner, there is a close bond between owners and employees, which helps make the manufacturing process more adaptable and flexible in relation to the market. The drawback to this advantage is that managers fail to understand how to manage their employees. In the end, employees aren’t able to think of new ways to improve the company’s competitive advantage over time. Instead, they’re relegated to tasks that are routine and automated that resemble machines. It is not an excuse for underestimating the importance of an employee who performs routine and automated tasks. It is up to the management to ensure that every employee’s capabilities are optimized for the success of the business.

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Two essential small business management strategies to “leading” employees include:

Tips One: Recognize and Honor Employees Immediately and Often

Implementation of this initial step is simple and easy—the ability to achieve results by committing to the same principles. Small business owners need to establish a rewards and recognition program that encourages employees to take calculated risks within their areas of work. This will allow them to think in a new way in order to increase the long-term competitive edge of the company. Examples include gift cards, certificates, novelty items, etc. The purpose is to encourage behaviors that are beneficial to the company, and these are the result of allowing them to think of new ways to perform their job more effectively and efficiently.

Tip Two: Effectively delegate

The second point is about encouraging your employees instead of micromanaging them. Effective managers recognize that the distinction between empowerment and micro-managing is a thin one; however, with the right experience and a sense of humor, managers can implement this method quickly. Empowering employees involves setting clear expectations and granting them the power to fulfill the goals they want to achieve. The benefits of the delegation are immense for the owners of small companies as it allows employees to multiply themselves in a massive way.

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