Learning the art of managing a business.

Our #throwbackthursday article this week looks at the past interviews I’ve conducted with entrepreneurs and explores the pros and cons to learning the art of managing a business in small businesses versus large corporations based on my research and experience working in corporate training in Management.

When I started the magazine one of the things I wanted to do was create a space where I could continue to share some of my research findings. I commenced research at RMIT University into business management and small business both formally and informally many years ago. After spending most of my adult life in and around a University I knew women wanted to read about business, career, aspirations as well as about fashion, interiors and healthy lifestyle. So I endeavoured to incorporate interviews with ethical businesses and stories of entrepreneurial women into the articles. In these interviews business owners share their experiences and journeys and they provide (for me as an education professional) an insight into where future support and training for smaller businesses should be focussed. Understanding business owners and managers needs and their staff training and resources needs has become as much of an interest as a profession for me.

So what’s the difference between business management training and accessing support in large corporations compared to small business, well the answer isn’t cut and dry. When I was a management and administration trainer I was fortunate enough to provide onsite training in hundreds of companies. Patterns in training needs were very apparent to me due to the regularity of my exposure to them. The size of the business often dictated the routinely problematic areas and often the solutions too. It became very clear the distinct differences between managers and staff who’s careers had primarily been in small businesses (less that 15 staff) and those from larger corporations. The use of mentors, on the job training, attitudes to formal training to address challenges in the workplace and to gain a competitive edge often was significantly different. Often smaller businesses were run by fiercely independent owners with very specific skill sets who as a business owner obviously have to stretch themselves and diversify their skills to operate a business efficiently. Areas that often suffer are finance, future planning, marketing and HR.

When I was managing the University’s Business School’s Enterprise and Workplace Training (EWT) Department I worked with many larger corporations too, in hospitality and retail such as McDonalds, Bunnings, Sofitel Hotels, Mandarin Oriental Hotels who specifically were dedicated to improving the customer experience through management and administration training and they went to great lengths to work with our teaching team to provide real life learning on the job aligned to our diploma competencies. It provided succession planning and more critically it gave the future managers an opportunity to use case studies and workplace examples through mentoring to prepare themselves for the future challenges of management.

In a large corporation this works incredibly well as there is often very detailed protocols to follow and highly experienced staff able to train others. It also addressed the often compartmentalised roles of staff and gave them cause to be exposed to gaps in the workplace experience. Smaller businesses can often lack any real succession planning training, why, because the boss is the boss, and letting go of management responsibilities can be extremely difficult for some entrepreneur types.

In the finance and real estate sector I witnessed very similar patterns to large corporates. The banks, insurance and realestate organisations we worked with to provide compliance training on insurance, investing, realestate and conveyancing were again quite easily able to deliver training and development in the workplace due to 1. The specific regulations, 2. The wealth of experienced mentors available in the industries for new entrants.

So why do larger corporations seemingly value formal business management qualifications and training more than smaller businesses? The answer varies but one clear reason is awareness, there is detailed research and intelligence behind the design and development of business qualifications and this is why they are so highly valued by larger employers because often they are involved in the consultation and development or at the very least are aware of this. Industries that require compliance training are a pure case in point with organisations like the Securities and Derivatives Industry Association SDIA, Real Estate Industry Victoria REIV being heavily involved in consultation on qualification design they obviously see the benefits.

But what about the soft skills, what about generic management and administration training, what about marketing, record keeping and information management? This is where I saw a distinct difference in business management knowledge in small entrepreneurial businesses compared to corporations.

Interestingly this is where the Frontline Management (FLM) Diploma was effectively born, out of a need for generic and comprehensive strategic management skills for senior staff overseeing the customer experience (Frontline Management), operations and staff and it’s one of the reasons this qualification was one of my favourites to teach. Unlike other management diplomas and degrees it was designed to address training needs in the workplace with an on-the-job focus rather than theory. (Although fortunately many other management training now incorporates these teaching methods). Formal flexible learning in larger corporations on these critical business operations skills mean staff are future ready should they progress up the ranks or even step out on their own. It covers off on skills sets many entrepreneurs lack and unfortunately my formal research collaborated my observations.

In our EWT department I observed this in practice when we delivered FLM diplomas or had auspice arrangement (so we managed the quality through auditing and resource support) for Bunnings, Alcoa, Sofitel Hotel and Mandarin Oriental Hotels, the experience incorporated international input with hotel sites in London, NewYork, Hong Kong, Singapore, KL, Geneva and Bermuda and Excelsior Hotel and Landmark Hotel in Hong Kong so to say it was vast is an understatement. What was very clear was the availability of mentors, regulations, standards and protocols and experienced workplace trainers meant staff in these companies had incredible support and guidance, but what was even more critical was the employer invested in addressing skill gaps for the mutual benefit of the employer and employee. Often businesses of this calibre have industry representatives involved with Business Skills Victoria and other bodies established to review qualification design and content in consultation with industry, so they understand the benefits and relevance of the qualification and have the resources to implement staff development.

But what about small business? I mean very small business. Small start ups and those in tiny retail outlets, cafes, restaurants, trades, services and small product manufacturing with under 15 staff, many with only 2 or 3 staff. These were the businesses that I could see struggling the most. With such limited resources the luxury of going to a University or TAFE and negotiating a customised workplace delivered accredited diploma or certification training to get their management and owners themselves up to speed just simply isn’t an option. Sure staff can go enrol in a qualification however that is very different to an employer supported and based training program. Luckily there are some very good providers of workplace based training, traineeships and government subsidised training. However many smaller businesses don’t provide valuable accredited training options, partially because they are not aware of the options, because they don’t obviously have Training, Staff Development and HR professionals on staff to identify training opportunities and government incentives to support the implementation.

In a nutshell many staff of of very small businesses are at a distinct disadvantage compared to larger corporations who invest in staff development. Many smaller self made business owners don’t see the benefit of qualifications, they can still be viewed as a piece of paper and ‘work experience is king’, don’t get me wrong as a workplace learning specialist I value workplace learning above most other learning, however it’s the gaps in knowledge with workplace learning that can lead to small business challenges. Not to mention in today’s highly competitive employment arena formal training can provide a leg up to those shifting from working in a small business to a larger corporation whose HR department are aware of the industry consultation and specific training needs that go into the design of these qualifications. Often it’s the gaps they fill that mean employers know they are already steps ahead of other applicants, particularly in management areas such as customer relationship management, operational efficiency, OH&S, staff training, recruitment, performance management, continuous improvement and strategic planning. I observed management training as being specifically valued in the hospitality and hotel industries in larger corporations for staff that were ambitious and seeking to progress rapidly to senior management and higher pay scale.

So when an opportunity arose to conduct formal funded research into small business needs I jumped at it, it was a chance to qualify my informal findings and do I spent 2 years part time (while still running the department) conducting research, interviewing small business owners, industry associations, trainers, employees and wading through statistics to establish and confirm the pattens I’d already identified in small business operators needs.

Without going into great detail very clear patterns or areas emerged.

1. Small business owners don’t know what they don’t know. They need to listen to mentors and seek professional advice on areas outside their experience base such as finance, training staff, induction and performance management, OH&S, regulations and compliance, business and strategic planning, record keeping, IT, branding and marketing etc. They are stretched to the limit and we now live in such a bureaucratic and competitive environment that things have become far too complex for one person (the business owner) to possibly hold this breath of knowledge. Small business operators knowledge base varies considerably. Some have extensive exposure to the above areas, some have little to none. Filling the gaps with formal and informal learning is needed.

2. They needed training solutions that were time efficient, self paces, workplace based, recognised prior learning and are affordable.

Many small businesses provided one very distinct advantage in training, new entrants are exposed to such a broad range of skills due to the size of the business.

In the end as part of the development phase of the research we focussed on developing small business programs that addressed critical skills like business planning, marketing, staff development and financial record keeping and information management. Overlapping these training needs with already existing national competency standards for small business qualifications but condensing delivery into efficient, flexible, relevant and implemented solutions for small business operators. So they address the resource needs while upskilling themselves.

So when I decided to start interviewing some of the most successful people in ethical business for the magazine it was rather cathartic to have a sense of continuing my role in identifying and sharing the challenges of smaller business and entrepreneurs. Over the years I’ve interviewed many successful business operators and published the interviews in the magazine. The willingness of these interviewees to share their highs and lows in an effort to help, warn or inspire others was humbling. So while these interviews don’t form any part of my formal research, they certainly contain valuable insights into the experience and lessons of many start ups and ethical business operators.

Below I’ve compiled the links to each of these interviews so you can read them. The stories of these entrepreneurs are moving, they talk about their struggles and success and they talk about what they might have done differently and what they’ve learnt from it and as a researcher, trainer and education manager in business I know this is the information that’s critical to helping people in the future.