The Ideal Management Team

Working with several businesses at various stages of development, as well as many projects that are to become the basis for future businesses, I’ve discovered something interesting about management teams. Every business or project has one, even if the entire company consists of a single individual. However, what I’ve discovered is that there is a consistent pattern in the management team that correlates to the success of the business as a whole.

The first thing I noticed was that businesses with only a single person involved in the decisions tended to limit their own potential. The reason for this seems to be a function of egocentricity, in that the manager of the business does not have someone to bounce ideas against, nor are they forced to recognize their own fallibility in their decision-making processes. With multiple people involved in making decisions, more thought is generally required of any decision made, thereby preventing certain errors from being made.

The second thing I noticed, which I found to be more interesting, had to do with the division of the management team. In a business with longevity in mind, a part of the management team must concern itself with the long-term plans for the business, while another part of the team must concern itself with the short term planning. The way I’ve come to look at it is the strategic and the tactical divisions of the management team.

In the tactical team, the key components of a perfect team include the ability to complete given tasks, to look for rapid feedback, and to execute plans of one to two years in length. The tactical team is not concerned with what happens to their work in the long-run, rather, that in the short-term, they prove to be as useful as possible. This may be in the form of becoming cash-flow positive as quickly as possible, the completion of short-term projects, or getting feedback as effectively as possible.

On the strategic team, the key component is vision. The management team here must look to the future of the company, five or ten years in the future, and where they would like to position the company in that time frame. They can then break that down to a sequence of short-term goals, which would be given to the tactical management team to execute. The strategic team would place controls over expenditures in the short-term, they would set goals and milestones for the company to ensure it will reach their vision.

On occasion, a company will have only two or three people managing the company. While this is perfectly normal, what they must be aware of is whether the members of the team have a tendency to focus on the short-term or the long-term. If the answer is the former, they should be made part of the tactical team, if the answer is the latter, they should be made part of the strategic team. Certainly, some people will cross both teams, which is important, but each person should have a primary area which they treat as their home-turf.