How to Manage a Company

Last Updated: February 18, 2023 References Approved

Running a company requires taking your business skills and know-how to the next level. Company organizations can be very complex, but to achieve efficiency and profitably, everyone must be working toward a common goal. A company manager's task is to create structures and systems to unify their workforce toward that goal.

Part 1

Part 1 of 4:

Identifying the Scope of Your Responsibility and Authority

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Review the company's organization. Your first step should be to see exactly where you fit in the management of the company. Start by examining its organizational structure. The complexity of this structure will largely depend on the size of the company. As CEO, you may be in charge of several other executives and a few dozen employees or dozens of executives and thousands of employees.
- Look at different divisions within the company to see how operations are separated and carried out.
- Depending on the executive structure of the company, you might be reported to directly by all employees or by executives like the chief financial officer (CFO) and various vice presidents.^{[1]
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2
Figure out who you report to. The CEO might be the founder or owner of the company, and therefore would only be responsible for reporting to other large shareholders. However, in many cases, the CEO reports to a board of directors or the owner of the company. In this way, they act as the operation hand of the board, carrying out their decisions. A CEO may also work in tandem with another executive, like a vice president or chairman, to make key business decisions. Make sure to clearly assess who you are responsible for reporting to.

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3
Determine reporting goals. When you report to the board or owner, if you are required to do so, you will report on new operational plans and/or the progress of existing plans. These might include both short-term and long-term plans. Progress must be reported at regular intervals, depending on the board requirements. In addition, the board will likely require that the CEO report to them on the financial health of the company quarterly and annually.
- The CEO might also be responsible for assessing the performance of subordinate executives and reporting their findings to the board.^{[2]
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4
Identify manager performance goals. The CEOs duties vary between organizations as well. You may be responsible for coming up with a new direction for the company or more narrowly focus on improving a single metric. To be successful, you'll have to figure out exactly how your performance will be measured. If the board expects you to take the company in a new direction and you focus on increasing sales, you may be replaced.
- Ask for specific goals so that you can create a plan for reaching them and carry out that plan.^{[3]
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Identify financial assets, needs, and limitations. The CEO must be conscious of all of the company's resources, including both capital and people. They need to know how much of each to allocate to the different departments and how to do so efficiently to reach the best results. Identify company assets like cash reserves and other liquid assets that can be used when needed. Assess the needs of the company as they apply to your plan, prioritizing the most important aspects and providing them with resources first.
- Successful distribution of resources requires that you clearly understand the operations and limitations of the company.^{[4]
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Part 2

Part 2 of 4:

Assessing Company Culture and Environment

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Assess past performance. The first step towards instituting a new operational plan is figuring what you're starting with. Look over existing strategic, operational, and marketing plans to get a sense of the past goals of the company. Then, you can look at financial performance over preceding years by examining financial statements from those years.
- Look at the successes and failures of old operational plans and projects. Try to identify why they were or were not successful.^{[5]
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Identify the strengths of the company. When implementing your own operational plan, you'll need to know what you can count on. The strengths of the company and its workers should be used to your advantage wherever possible. Worker strengths might include subject matter knowledge, a large amount of experience, a high level of skill, and commitment to the goals of the company, among others.
- Focus on taking advantage of your workforce's strengths to improve performance and employee wellbeing.
3
Determine the primary weaknesses. Similarly, you have to understand your team's weaknesses so that you can work around them and make plans to solve them. Weaknesses might include poor quality, low levels of performance, excessive costs, a lack of cohesive organization, or an inability to meet schedules, among others. Look at issues with employer performance, workplace culture, employee turnover, and processes to identify weaknesses.^{[6]
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Prioritize solving each problem. There may be a variety of problems in your workforce or organization. These can sometimes be worked around and hidden, but only for a time. To actually solve them, you will need to prioritize each issue and work to solve them one at a time. For example, you might solve cultural problems by leading by example, showing your management and employees how to promote an efficient working environment.^{[7]
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Part 3

Part 3 of 4:

Developing an Operational Plan

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Establish key performance metrics. Your operational plan will be meaningless if its success cannot be measured. Establish measurable and specific performance metrics so that your progress and eventual success can be tracked. These metrics must be quantifiable targets that can be reached as you work through your plan. When they are reached, the plan can be considered a success.
- Metrics should be bound by a certain time limit.
- For example, you might set an objective of raising sales by 10 percent in two years or improving employee retention by 20 percent in the next five years.^{[8]
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Set realistic objectives. Set goals by first identifying your strategic objectives. What change do you most want to make in your organization? Your answer should be a mix of your own objectives and those of your shareholders and customers. However, these objectives should be grounded in reality. There's no way you're going to control the whole market for your product or double your sales in a year. Ground your objectives by cutting them into measurable and attainable goals.
- These should be actions that lead to an expected result, like training your sales team on maintaining customer relationships to increase repeat sales by 3 percent.
- This goal might be one aspect of the larger goal of increasing sales by 10 percent over a few years.^{[9]
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3
Determine the appropriate management style. Management styles fall broadly into two categories: people-focused and process-focused. People-focused strategies rely on hiring, training, and retaining the best people, allowing them to improve processes themselves. Process-focused strategies, on the other hand, focus on creating perfect business processes first and then training existing staff on them. In most cases, effective management will incorporate both of them. However, you will likely need to focus on one in the immediate term.
- Your choice of one of these styles will be up to you, and will largely depend on the process and your own confidence in your abilities to increase performance using one strategy.
4
Communicate the plan to your superiors. In your role as the middleman between the board and company, you must communicate your operational plan and research to the board. Be prepared to defend your strategy and reasoning, as the board will likely be very interested in any significant operational changes. Get their approval on the final plan before moving forward. This may end up taking several versions of the plan and going back and forth between the board and your planning team.^{[10]
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Part 4

Part 4 of 4:

Implementing Your Operational Plan

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Communicate the operational plan to your workforce. To begin implementing the operational plan, you will need to get all relevant employees on board. This is best handled in meetings where management is able to meet directly with employees and present the plan to them, addressing any questions or concerns they may have. The plan itself can be broken down into parts and presented separately in more detail to the teams that will be handling those parts.
- If necessary, train employees who will using a new system or equipment as part of plan implementation.^{[11]
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Monitor results regularly. Schedule regular meetings, perhaps biweekly or monthly, to track plan implementation and success. These only have to be 30 minutes or an hour long, but should allow for departments to report on their progress. Make sure that all progress is reported in terms of your established metrics. This way, you can easily track progress across teams and departments.^{[12]
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Correct deficiencies in the plan. After a few months of plan implementation, take a step back to review implementation success. What has gone well and what is not going so well? Look at areas where implementation has gone smoothly and those areas where it hasn't. Work to assess why these areas are not performing as strongly and reassess your strategy to work past it. Hold meetings with representatives from those departments so that you can work out solutions.^{[13]
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