RM Online - The consequences of success are driving Mom and Pop nuts

Mom and Pop opened the store 20 years ago, worked hard, made a number of good decisions at the right time and developed a solid customer base. The business grew.

Now they have three stores with a dozen or so employees in each one, and it's just not going as well. Things are starting to come apart. A trencher went out unserviced and the digging chain broke. A tent was delivered late, and then three of the stakes were missing. A customer called, wondering why no one had gotten back to him as promised. Paul, the general manager, was looking for his yard man, Hank, and found that Pop had given him the morning off to take his kid to the orthodontist. There are inventory glitches, the product mix is wrong, there are snafus in the yard, long waits at the counter - all three stores are losing rentals. Another customer went down the street - third time today, Pop hears. What's going on?

Pop wants to find out. The business he and Mom built is coming unglued. He's about had it. He asks around and gets answers like: "I thought Joe did it." "I never got the message." "Well, I told Marge. Didn't she pass it on?" "I thought Ralph ordered that part a week ago." "Hmm, can't seem to find the paperwork on that." "Well, I don't have the authority ..." "I'll have to ask." "That's not my job."

Mom and Pop care just as much about their business as ever, and they haven't turned stupid after 20 years in rental, but their business has grown beyond their direct control and they haven't developed their management structure or refined their concept of management to keep up with it. What worked back then isn't working now. It's time for a little crash course in the basics of running a business that's grown too big for daily, hands-on management.

These are structural issues. Without them a larger organization first becomes inefficient and then begins to shake apart:

Span of control. Pop, try this: set it up so fewer people are reporting to you - then you can go to a manager and ask about anything under his/her control. Create a culture in which reporting relationships are clear - not to encourage managers to strut around like roosters, just to make the operation smooth and efficient.

Communication. Create a culture of communication. Nobody wants chaos, but chaos is what you get unless you get everyone to communicate immediately and thoroughly with the appropriate people. See that the communication flows through the whole organization - so no one is forced to run on a half tank of knowledge.

Responsibility, accountability and authority. If you give people the responsibility for something and make them accountable for the results, you have to give them the authority to do it. There will be few dissatisfied customers or lost rentals if the person closest to the point of action has the authority to deal with the Page 6 From Page 4 problem then and there. The counterperson who can deal with a situation instead of waiting until the boss gets back will save customers. The manager who can take charge without fear of being second-guessed later will strengthen the structure and build business. At all levels, accountability and authority ultimately build profits.

Training and employee development. Nobody can take on responsibility without the knowledge necessary to do the job well, and few can do anything really well without knowing the big picture - the why, not just the how: What are we really trying to do here? What problems are we trying to overcome? What's standing in our way? What opportunities are we trying to seize? How can I help?

"Ownership." When people start thinking like that, and when they know management encourages them to do so, they start "buying in" to the problems and opportunities and taking personal ownership of their part of the big picture. You can't put a price on the value of that: there aren't enough zeroes.

Of course, it can take a long time to develop such a culture completely and throughout the organization - especially if it has to be driven through a thick hide of reluctance and resistance, at any level of management - but if Mom and Pop are really serious about it, they won't have to wait long to see the returns on their investment.

And just what does that investment cost? Nothing I've mentioned here, with the possible exception of training, costs a dime: these notions are loaded with profit.