In today’s competitive business landscape, success depends on more than just a unique idea or a hard-working entrepreneur. As a CEO or business owner, it can be difficult to wear many hats and run every facet of your business. The decision-making and management responsibilities can be overwhelming. Not only are you responsible for leading the charge, but you are also responsible for vision creation, employee management, resource allocation, and strategizing. Therefore, it’s essential to have a strong management team by your side. Through this blog post, we’ll highlight the value of developing a solid management team and the impact it can have on your businesses’ success.
Enhances Decision-Making Capability
Successful businesses are built on a foundation of robust decision-making processes. A Harvard Business Review study shows that decision-making effectiveness is 95% correlated with financial performance1. A diverse and experienced management team brings a variety of perspectives to the table, enriching the decision-making process.
Take, for instance, SpaceX. Despite being a newcomer in the space industry, it overtook giants like Boeing and Lockheed Martin. One of the key success factors was the diversity of its management team, composed of industry veterans, tech entrepreneurs, and leading engineers, contributing to better decision-making processes2.
Boosts Operational Efficiency
A strong management team is essential for operational efficiency. According to a survey conducted by the Association for Project Management, businesses with strong, aligned leadership are three times more likely to outperform their competitors in terms of revenue growth3. Managers ensure that all moving parts of a business are working together seamlessly.
A classic example is Toyota’s “Lean Management” system. This operational efficiency approach, helmed by strong management, resulted in Toyota becoming the largest automobile manufacturer globally, despite starting as a small enterprise4.
Facilitates Growth and Scaling
A robust management team is crucial for scaling a business. According to a report from the Small Business Association, one of the primary reasons small businesses fail to scale is the lack of a competent management team5. Managers provide structure and direction, allowing businesses to grow without falling into chaos.
Tech-startup Slack exemplifies this. Even though it started as a small company, by establishing a strong management team early on, Slack successfully scaled and was eventually sold for a whopping $27.7 billion to Salesforce in 20206
Increases Stakeholder Confidence
Strong leadership also instills confidence in stakeholders, including investors, employees, and customers. Bain & Company reports that companies with high-performing leadership teams are 1.9 times more likely to achieve above-median financial performance7.
Consider the case of Tesla. Despite facing numerous challenges, investor confidence remained high, largely due to Elon Musk’s strong leadership and his experienced management team. This belief in the management team has led Tesla to become one of the most valuable car manufacturers in the world8.
Promotes a Positive Organizational Culture
Finally, a strong management team helps promote a positive organizational culture. Research from Deloitte indicates that 94% of executives and 88% of employees believe that a distinct workplace culture is important to business success9.
Southwest Airlines, with its strong management team, has created a culture of customer service excellence and employee satisfaction. This culture has played a pivotal role in the airline’s profitability and customer loyalty10.
In conclusion, it is necessary for small and mid-sized business owners to develop strong management teams within their organizations so that they can create a roadmap to success. Furthermore, a strong management team enhances productivity through smooth-running processes, enables informed decision-making, creates platforms for employee development, and fosters sustainable growth. Therefore, small and mid-sized business owners must emphasize an ongoing focus on developing and nurturing a strong management team.
Developing a strong management team for a small to mid-sized business owner is a key factor in the company’s success. Creating a competent management team brings expertise, diverse skill sets, consistency in operations, employee satisfaction, strategic thinking, and financial improvements. As a business owner, you cannot afford to be everything to everyone. It is time to invest in a strong management team that can help take your organization to the next level of success. Through Newlogiq’s leadership team development programs, you can invest in your staff to improve their skills while simultaneously increasing the overall value of your business. Contact Newlogiq today to learn more about our leadership team development offerings.
1 “The Secrets of Great Teamwork.” Harvard Business Review. June 2016.
2 How Elon Musk Builds Organizations That Can Achieve Anything.“Inc. Magazine. June 2020.
3“The Golden Thread.” Association for Project Management.
4 “How Toyota Became the #1 Car Company in the World.” Investopedia. November 2019.
5 “Small Business Growth.” Small Business Association.
6 “Salesforce buys Slack in a $27.7B megadeal.” TechCrunch. December 2020.
7 “What Makes an Exceptional Executive Team?” Bain & Company.
8 “Tesla’s meteoric rise: 9 key reasons behind the company’s success.” Business Insider. January 2021.
9 “Corporate Culture and Performance.” Deloitte Insights. 2016.
10 “Southwest Airlines: A Case Study in Employee Engagement.” Gallup. January 2018.