MANAGEMENT COMPETENCIES THAT PROMOTE RAPID COMPANY GROWTH
Entrepreneurial managers need a sound foundation in what is considered traditional management skills. The list below is divided into two cross-functional areas (administration and law and taxation) and four key functional areas (marketing, finance, production and operations, and microcomputers). Technical skills unique to each venture are also necessary.
- Problem Solving
Ability to anticipate potential problems; ability to gather facts about problems, analyse them for real causes, and plan effective action to solve them; and ability to be very thorough in dealing with details of particular problems and to follow through.
Ability to communicate effectively and clearly – orally and in writing – to media, public, customers, peers, and subordinates.
Ability to set realistic and attainable goals, identify obstacles to achieving the goals, and develop detailed action plans to achieve those goals, and the ability to schedule personal time systematically.
- Decision making
Ability to make decisions on the best analysis of incomplete data, when the decisions need to be made.
- Project management
Skills in organizing project teams, setting project goals, defining project tasks, and monitoring task completion in the face of problems and cost/quality constraints.
Ability to work effectively in negotiations, and the ability to balance quickly value is given and value received. Recognizing onetime versus ongoing relationships.
- Managing outside professionals
Ability to identify, manage, and guide appropriate legal, financial, banking, accounting, consulting, and other necessary outside advisors.
- Personnel administration
Ability to set up payroll, hiring, compensation, and training functions.
LAW AND TAXES
- Corporate and securities law
Familiarity with the Uniform Commercial Code, including forms of organization and the rights and obligations of officers, shareholders, and directors; and familiarity with Security and Exchange Commission, state, and other regulations concerning the securities of your firm, both registered and unregistered, and the advantages and disadvantages of different instruments.
- Contract law
Familiarity with contract procedures and requirements of government and commercial contracts, licenses, leases, and other agreements, particularly employment agreements and agreements governing the vesting rights of shareholders and founders.
- Law relating to patent and proprietary rights
Skills in preparing and revision of patent applications and the ability to recognize a strong patent, trademark, copyright, and privileged information claims, including familiarity with claim requirements, such as intellectual property.
- Tax law
Familiarity with state and federal reporting requirements, including specific requirements of a particular form of organization, of profit and other pension plans, and the like.
- Real estate law
Familiarity with leases, purchase offers, purchase and sale agreements, and so on, necessary for the rental or purchase and sale of a property.
- Bankruptcy law
Knowledge of bankruptcy law, options, and the forgivable and non-forgivable liabilities of founders, officers, and directors.
- Market research and evaluation
Ability to analyse and interpret market research study results, including knowing how to design and conduct studies and to find and interpret industry and competitor information, and familiarity with questionnaire design and sampling techniques. One successful entrepreneur stated that what is vital “is knowing where the competitive threats are and where the opportunities are and an ability to see the customers’ needs.”
- Marketing planning
Skill in planning overall sales, advertising, and promotion programs and in deciding on the effective distributor or sales representative systems and setting them up.
- Product pricing
Ability to determine competitive pricing and margin structures and to position products in terms of price and ability to develop pricing policies that maximize profits.
- Sales management
Ability to organize, supervise, and motivate a direct sales force, and the ability to analyse territory and account sales potential and to manage a sales force to obtain a maximum share of the market.
- Direct selling
Skills in identifying, meeting, and developing new customers and closing sales. Without orders for a product or service, a company does not really have a business.
- Service management
Ability to perceive service needs of particular products and to determine service and spare-parts requirements, handle customer complaints, and create and manage an effective service organization.
- Distribution management
Ability to organize and manage the flow of product from manufacturing through distribution channels to the ultimate customer, including familiarity with shipping costs, scheduling techniques, and so on.
- Product management
Ability to integrate market information, perceived needs, research and development, and advertising into a rational product plan, and the ability to understand market penetration and break-even.
- New product planning
Skills in introducing new products, including market testing, prototype testing, and development of price/sales/merchandising and distribution plans for new products.
- Manufacturing management
Knowledge of the production process, machines, manpower, and space requirement to produce a product and the skill in managing production to produce products within time, cost and quality constraints.
- Inventory control
Familiarity with techniques of controlling in-process and finished goods inventories of materials.
- Cost analysis and control
Ability to calculate labour and material costs, develop standard cost systems, conduct variance analyses, calculate overtime labour needs, and manage/control costs.
- Quality control
Ability to set up inspection systems and standards for effective control of the quality of incoming, in-process, and finished materials. Bench-marking continuous improvement.
- Production scheduling and flow
Ability to analyse workflow and to plan and manage production processes, to manage workflow, and to calculate schedules and flows for rising sales level.
Ability to identify appropriate sources of supply, to negotiate supplier contracts, and to manage the incoming flow of material into inventory, and familiarity with other quantities and discount advantages.
- Job evaluation
Ability to analyse worker productivity and needs for additional help, and the ability to calculate cost-saving aspects of temporary versus permanent help.
- Raising capital
Ability to decide how best to acquire funds for start-up and growth, ability to forecast funds needs and to prepare budgets; and familiarity with sources and vehicles of short- and long-term financing, formal and informal.
- Managing cash flow
Ability to project cash requirements, set up cash controls, and manage the firm’s cash position, and the ability to identify how much capital is needed, when and where you will run out of cash, and break-even.
- Credit and collection management
Ability to develop credit policies and screening criteria, and to age receivables and payables, and an understanding of the use of collection agencies and when to start legal action.
- Short-term financing alternatives
Understanding of payables management and the use of interim financings, such as bank loans, factoring of receivables, pledging and selling notes and contracts, bills of lading and bank acceptance; and familiarity with financial statements and budgeting/profit planning.
- Public and private offerings
Ability to develop a business plan and an offering memo that can be used to raise capital, a familiarity with the legal requirements of public and private stock offerings, and the ability to manage shareholder relations and to negotiate with financial sources.
- Bookkeeping accounting and control
Ability to determine appropriate bookkeeping and accounting systems as the company starts and grows, including various ledgers and accounts and possible insurance needs.
- Other specific skills
Ability to read and prepare an income statement and balance sheet, and the ability to do cash flow analysis and planning, including break-even analysis, contribution analysis, profit and loss analysis, and balance sheet management.
- Spreadsheet analysis
Ability to perform spreadsheet analysis using the microcomputer, including databases.
Knowledge of word processing, electronic mail, and so forth,m is extremely helpful.
Note that not all entrepreneurs will find they are greatly skilled in the areas listed above, and if they are not, they will likely need to acquire these skills, either through apprenticeship, through partners, or through the use of advisors.
However, while many outstanding advisors, such as lawyers and accountants, are of enormous benefit to entrepreneurs, these people are not always businesspeople and they often cannot make the best business judgments for those they are advising. For example, lawyers’ judgments, in many cases, are so contaminated by a desire to provide perfect or fail-safe protection that they are totally risk-averse.