When you first start a business and it’s just the entrepreneur CEO doing all the work, no one even thinks about creating a management plan. But eventually, if you do it right, your business will grow and you will need a team. Managing this team can create an awesome business or an awesome mess.
When you hire the first 10 employees, you quickly start to realize that if you do not organize, the team will not be effective. When expanding from the first two or three people, circular Management Programs work well, those were everybody is involved and lines of communication to everyone are open. As you grow your business, this becomes less feasible. Enter the traditional management hierarchy layout.
You don’t want everybody you hire reporting directly to the ceo. This would be impossible. Now this does not mean that there cannot be communication between the CEO and the employees or vice versa, but there needs to be a structure that has checks and balances so things can get done.
What a Management Plan Should Include:
A Hierarchy Chart
All management plans should include a hierarchy chart, which shows which employees report to which managers and which managers report to which vice presidents and so on. All the way up to the CEO. The hierarchy chart in a management plan allows a chain of command to be established. The visual representation helps people to understand where they fit in the organizational hierarchy.
Job Titles and Job Descriptions
Each management plan should include a list of job titles, that are also showcased in the hierarchy chart, with job descriptions for each job title. This assures that when you are hiring for a certain position, that person knows exactly what they are responsible for. It also helps management understand how to check to see if the employees actually doing the work they were hired for. If you do not know what you hired the person to do, it is hard to measure. Job descriptions in the management plan should be detailed enough to give an employee a sense of what they are responsible for 80% of the time, leaving some room for adjustments.
Management Plan Budget
At minimum, the management plan should include expected salary ranges and head counts for each position and then estimate of what those positions will cost yearly moving forward. This is sometimes called a personnel budget.
Employees don’t always work out the way you think they will. Management structures have to be nimble to change and a certain portion of your management plan should include a contingency plan. A contingency plan allows management to plan how they will treat an empty position when someone leaves or has to be asked to leave. This could be for various reasons, but the point is to answer “what happens if?”
Who Should Write a Management Plan
Businesses that are looking to grow quickly or that are large and have to manage various resources should develop a management plan. Also investors who have invested in a business where others will manage their investment, should develop a management plan. Any entrepreneur or executive who wants to understand who they need to hire in the future, should develop a proforma management plan.
A strongly written management plan allows organizations to move forward confidently, knowing the right people and the right plan was put into action. When trying to sell an investment in a large project, one of the first things investors want to know is do you have the right people that can make it happen. Having a strong management plan showcases this and assures the reader and yourself that you have an actionable plan.
Need help developing a custom management plan for your organization? Cervitude IR can help, contact us today.
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