Let's talk about how your thinking affects how you treat people and changes your success. Did you know that how you think about your business affects anyone working for or with you - employees, contractors, friends, family and your thinking is crucial for success?
Recent research highlights that the way business owners who manage a few people plays a significant role in their company's success. See if you can figure out which of the three main people management styles identified in the study you are most like:
People-Focused Approach: In this style, you place a strong emphasis on employing people and providing training. While this can lead to an increase in the number of employees, it might not immediately provide extra profit.
Profit-Focused Approach: Here, your primary goal is to increase profits quickly. If this is your goal, you may see a rapid increase in profits, but this often comes at the expense of employees feeling they are appreciated and you could lose the good ones.
Operations-Focused Approach: This might be your thinking if you want to reduce your costs and make it easier to manage your business. Although it means you can spend more time doing what you want, you don't focus on achieving your sales and revenue goals and training and appreciating people working for or with you.
The study also shows that as a business owner, how you think significantly influences your approach to managing people. For example, owners who concentrate on making more money every day tend to spend more on training their employees.
This study offers practical insights:
Your style of managing employees can directly impact your business's success and profitability.
Focusing on employee growth might not immediately increase profits but can increase your team.
Focusing on profit might lead to quick financial gains but could also result in losing skilled employees.
The key message? As a small business owner, you should think about whether the way you behave to the people working with or for you matches your overall business goals.
If you are like most business owners, myself included, you will probably find you practice all three approaches at different times. That’s part of the reason being a small business owner with limited resources - money, people, and time, is known as a roller coaster. If you are focused on one specific approach it’s hard (if not impossible) to equally focus on the others. Remember, that’s normal. And also realise that the change in approach will change your revenue in profitability.
Focus on recognising how you think about your business and how the approach you take will make a difference to your profit and employee feelings.
Remember that how you manage your team is a critical aspect of your business strategy. Whether you choose to focus on people, profits, or operations, each has its implications for your business's success.
When you have limited resources, it means it can take you longer to achieve your goals. Knowing this can help you manage your and other people’s expectations of the success of your business on any given day.
You will find more practical information like this within a complete marketing strategy for your business in the Marketing Strategy app. Each chapter in your personalised plan in the app is designed to teach you what is important for achieving the success you want from your business.
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Source: Source: Rodrigues, A.C., Carvalho, H., Caetano, A. and Santos, S.C. (2022). Micro-firms way to succeed: How owners manage people. Journal of Business Research, 150, pp.237-248.