First, let’s define two terms. The first is ‘effective business’. An effective business is a business that accomplishes its purpose. Its purpose is the reason for which it was designed. An effective business is synonymous with a successful business.
The second term is ‘business structure’. Business structure is the physical design of that business. It is the layout and format for conducting business functions. This layout and format are the inner workings of the business.
An effective business is one that has a functional structure. The degree of success a business experiences is directly correlated to the strengths and weaknesses of the business structure
Following are seven approaches or considerations to ensure an effective business through the components of its structure.
- Establish Business Goal
Goal is foremost. Goal establishes focus and aim. It gives vision and direction. Starting a business is not as easily done as it is said. Minus a goal, that business dooms itself to nothing more than a floundering attempt and certain failure.
Goal has three intrinsically linked elements: mission statement, strategies and evaluation. Take a look at how these three intertwine to help create an effective business structure.
Succinctly, this is the statement of the business purpose and design. It is a concise, focused statement that expresses the reason for the business to exist.
Strategies are the ‘how-to’s’ of the mission statement. They are the directions for how the business plans to carry out its mission statement and reach its business goal.
Evaluation is two-fold. First, determine if the strategy is appropriate and viable. Does it contribute to the mission statement and overarching business goal? Second, are we effectively, successfully practicing the strategy?
- Leadership Selection
Every business must have focused, effective leaders. Real leaders zero in on the business goal or mission statement and guide the company success path. Weak, ineffective leadership is the bane of any business enterprise.
Strong leadership should have determination, vision, foresight, strong organization, communication and planning skills. These essential, leadership traits give the business its solid launching pad.
- Designing the Organization (Chain of Command)
This is leadership’s initial priority. Leaders put in place the structure of leadership. Organization design establishes chain of command. This chain of command determines the parties to and their roles within actual daily business activity.
Again, this is a critical, first step of the business leadership. Disorganized leadership is not leadership. Establishing specific leadership posts and precise responsibilities for that post firmly determines how the ship must be run.
- Establishing Work Flow of Organization Design (Communication)
Leadership’s first, all-encompassing task is establishing workflow. Workflow is how the process of business tasks gets done. It delineates the step-by-step process, actors involved and expected outcome of the effort.
The absolutely quintessential key to this entire process is threefold: communication, communication and communication. Miscommunication is either the cause, or gets blamed as the cause, for the majority of wasted business success opportunity. A business that is not masterful at communication sentences itself to the business failure column from the outset.
- Strategies for Obtaining Business Goal
Next, business leadership must develop strategies which lead to accomplishing the business goal. These strategies must complete specific steps of the goal-focused process. After all, business goal attainment is an ongoing process and not a one-time event
- System for Evaluation of Strategies
Evaluation lets leadership know whether a goal-related strategy is legitimate. Measuring the progress of the strategy is the main qualifier for whether a strategy contributes or hinders attaining the business goal.
Establishing milestones for strategies is an accurate assessment method for grading the effectiveness of any given strategy. Milestones must be specific with stated anticipated results.
They also must include timetables with deadlines and dates. An example milestone statement should look like this: X strategy must accomplish Y results by Z date.
- Staffing Selection
Once leadership has established the business goal and the procedures for attaining that goal, staff selection takes center stage. The people who are the workers directly impact the effectiveness of any business endeavor.
Employees must be skill specific to the role(s) they fill. Every role player must be continually evaluated according to the three A’s: Aptitude, Attitude and Altitude. The short, simple definitions of these employee criteria are:
Aptitude is employee capability for the role. Suitability refers to whether the employee is the one employee best suited for the task. Just because a person has the ability for the task does not mean he is the best suited for that particular role within the organization.
Attitude is the role player’s mental, emotional disposition toward the role they are assigned. Attitude is the single most important of the three A’s. It directly influences the other two.
Wrong attitude is at the center of most interpersonal conflicts in the workplace. It is a festering wound that negatively affects the entire business effort.
Its tentacles have surprisingly extensive reach. Left unchecked or confronted, wrong attitude sabotages the best, most determined success efforts.
Altitude represents the level at which the employee operates in his company role. Personal outlook, task attack plan and how he gets the job done all go into determining employee altitude.
The role player with the correct aptitude, attitude operating at high altitude is the ideal partner for business effectiveness and success.
Additional Effective Business Structure Considerations
This section is included to briefly mention three other ingredients which are part of the main seven already enumerated and explained. They do not have their own numbered headings since they are ongoing, simultaneous activities of the main seven. They are leadership responsibilities.
Guiding business vision and managing operations are additional tasks. Guiding the business vision means keeping it headed toward its stated goal. Achieving its stated goal is the essence of the effective business.
Managing day-to-day operations in a way that tethers every phase of the process to the business goal is correct, effective management. Foreseeing and monitoring the necessary changes make the business flexible and adaptable. Flexibility gives the business the innate ability to remain viable through adversity.
Every successful new business venture features the seven approaches or characteristics listed above. Tom Welsch is just such an example of one who grasps the broader business vision. His insurance companies practice these ceaselessly.