Financial reports for business administration

Describe what the following budgets/ reports are and how they might be used to inform a team’s operations.

  • Variance analysis. Comparing the difference between the actual figures and the budgeted/targeted levels of the businesses performance. The analysis includes an explanation of the difference between actual and expected figures as well as an evaluation to why the variance may exist. The purpose of this is to assist in determining what may have gone right or wrong and to help in future decision-making.
  • The general ledger. A company's main accounting records. It's a complete record of financial transactions over the life of a company. It holds account information that is needed to prepare financial statements, and includes accounts for assets, liabilities, owners' equity, revenues and expenses.
  • A sales analysis report/ budget report. Sales analysis reports are used to measure and monitor sales performance. It can include figures such as actual sales revenue, sales goals, kpi's, sales profit, and the type of products sold.
  • Managers can use this information to develop sales strategies, better understand past results and to help forecast future sales.
  • Variance analysis reports. Variance analysis reports help quantify and identify the difference in actual expenditures or revenues between fiscal years and quarters. In some cases, variance is calculated by comparing budget to actuals and in others the comparison is based solely on actuals.
  • The revenue and expenditure report/ budget. The balance between the incoming revenue and the expenditure relating to it over a period such as coffee machine maintenance and hire. Generally, it's an expense incurred to support current operations and not one that adds value to something.
Explain why reports must be made to:
  1. Management need access to reports to analyse the current, past, and forecasted 'health' of the business. They need to use the reports to determine decision making to grow the business.
  2. Investors need to see the reports to determine whether it's a viable option to invest money or goods into the business.
  3. Creditors need to view reports to see whether the business has enough cash flow/equity/assets to back-up a further debt and whether the institution will lend the money and how much it will grant. d) The government needs to see reports to understand whether the business is being compliant in OHS and other legislations relating to the business. It also needs the information to determine if accounting information is being recorded correctly.

What details might be provided in a financial report?

A financial report would contain all the financial records of the business including revenue, expenses, assets, liabilities, etc. It may contain the full details or a detailed summary. It is a formal record of the financial activities of a business.  Learning about tasks completed by business managers can be achieved by taking a certificate IV in Business administration - more information can be found by clicking on this link. An example of financial report a be found by going to the Australian security investment commission. Other details include: a clear statement of purpose, methods of data collection and sources, details on how the information included in the report was collected, data related directly to the area being reported on such as costing trends and identification of shifts in supplies and market, and relevant information relating to sales information, bills to be paid, items selling well, items selling poorly, condition of equipment and opportunities. What is GST and how is it implemented? Who is required to register for GST? What piece of legislation primarily governs GST? The GST is a tax of 10% on most supplies of goods and services in Australia. From a business point of view, in most cases it's refunded to all parties in the chain of production other than the final consumer. Businesses will charge the GST when the service or product is passed on to the consumer. If your turnover is less than $75,000 then you don't have to register for GST although you may do so. All other businesses, with minor exceptions, need to register for GST. The GST Act 1999 governs the GST - A New Tax System (Goods and Services Tax) Act 1999

By user23395, ago

Business Admin guide to understanding Cost centers.

What are cost centers? Give examples of cost centers that might be encountered in an organization.

Cost centers are the sections, departments, areas, etc that are accountable for their own expenditure and to which costs can be allocated. There are two types of cost centers one is production cost centers where the products are manufactured or processed and the other one is service cost centers where a service is provided to another cost center. These areas include marketing, admin, manufacturing, sales, and production. If you want to learn more about busienss administration or some of the functions the business admin does, considering enroling in a business administration course. Study and enrol today

What is the importance of a cash flow budget or report?

A cash-flow budget forecasts what cash your business will have to meet expenses and helps you ensure your business meets its day-to-day commitments. It compares all outgoing funds with the incoming to determine whether the business is in front or struggling to keep up. It's important to understand the cash flow and to understand the items that need to be listed in each category. It's also important to understand when these transactions are taking place. There is the chance that a customer has bought an item but takes a long time in paying it off. Although you might have made a profit on the sale of the item, there is a cash flow gap as you have not yet received the funds to pay for the item yourself. Simple things like can put smaller businesses in a lot of financial trouble. This cash flow gap could damage credit ratings, miss other opportunities, and force the borrowing of funds.  Also, check out this resource that is provided by the Australian government. How to prepare a cash flow budget for business owners

What data do you need to collect, and from whom, in order to construct a cash flow budget?

Sales reports - last periods figures Outgoings such as purchases, marketing, loan repayments, etc Staff costs Capital such as stock on hand and cash.

Describe how the budget is used to monitor work, performance, variation, and team/ division outputs.

The budget reports are designed to give a clear overview of how the business is running. Every expense can be calculated as a percentage of the total expense/margin to see if it is cost-effective. If it is being overspent, then something needs to be done. This could be several things such as reducing spending, reducing or increasing staff levels, cross-training staff, incorporate techniques to increase sales, reduce stock levels, outsourcing, and renegotiating supplier costs.   What is the meaning of the following terms:
  • Usually referred to as property or products that are of value and cash. Loosely referred to as employees of the company on occasions.
  • Something that is a responsibility or what the business owes. It can be an object, debt, financial obligation, time, employee, etc.
  • Something that needs to be paid or something that will cost a sum of money. Expenses can also be fixed, such as mortgage, insurances and can also be variables such as purchases and outgoings, bills, etc. d. Equity. The portion of a business or property that is owned beyond the debt. It can be known as stock.

By user23395, ago

Managers guide: How to prepare budgets and financial plans

What is the process for preparing budgets or other financial plans?

  1. Identify the data to be collected.
  2. Identify the appropriate sources of data.
  3. Ensure currency, reliability and validity of the data.
  4. Classify and code the data according to accounting and organisational principles.
  5. Calculate costs, profit/loss analyses where needed.
  6. Assess the results of data analysis and provide formal or informal reports on your outcome.
  7. Keep accurate and secure records of financial transactions.
HIstorical data and reports from the organisation's information system will contribute to the development of realistic and achievable budgets and to the design of financial plans for your team.

What two forms of budgeting might be used?

  1. Flexible forms - formulas that adjust expenses based on changes in actual revenue or other activities.
  2. Fixed - does not change or flex when sales or some other activity increases or decreases. Also know as, static budget.

Which form of the budget allows changes to be made?

Flexible budgeting allows for adjustments – if figures are dependent on other figures then it can be regulated if conditions change. However, only if designed to allow changes and adjustments to cost levels so they match the level of activity attained. It is purposeful to compare the actual expenditure which is measured against income. Budget planning is a critical part of the Cert IV in Business administration - learn more here.  Another great resource for business administrators is how to create a budget guide on the website.

Explain how contingency plans work.

Contingency plans are put in place to address any unexpected changes that may occur. They are developed using a 'What if' scenario and created ahead of time to avoid any disruptions to the running of the business. It allows an organisation to resume its daily operation as soon as possible after a certain unforeseen event. Besides, the contingency plan will help to protect resources, minimizes the inconvenience of clients and assign specific responsibilities in the process of recovery. Another great   Why should the team or workgroup members be actively involved in designing and developing contingency plans? Contingency plans are put in place to address any unexpected changes that may occur. They are developed using a 'What if' scenario and created ahead of time to avoid any disruptions to the running of the business. It allows an organisation to resume its daily operation as soon as possible after a certain unforeseen events. Besides, the contingency plan will help to protect resources, minimizes the inconvenience of clients and assign specific responsibilities in the process of recovery.

How can employees be engaged in the preparation of financial reports, allowing details to be easily disseminated among team members?

A process of communication. The intended message must be communicated and filtered down through management and allow them to be presented with the opportunity to contribute. In addition, performance measures, should be incorporated into their roles and responsibilities as they will add accountability and help drive a success process through the business.  

Why should employees be involved in setting and monitoring the budget?

It will enable a better understanding to all employees what the financial expectations are - what it entails such as overheads, wages, general costs etc. How they're structured and implemented and how they're monitored, evaluated and maintained.

What is responsibility accounting and what is its importance to an organisation?

It's allocating costs to specific areas such as departments, teams, sections, etc. Doing this gives a correct analysis of where the main costs are coming from and shows how different areas compare. Further to this, it can give an indication of where improvements need to be made and what leeway areas have. Apart from that, it helps communicate the information needed by the owners and investors for assessment of financial performance. On top of that, it provides relevant, accurate, timely information to the managers for them to make decision

By user23395, ago

Financial training for Business managers

Why should organisations collect, file and maintain accurate financial records?

There are many reasons for which businesses should maintain complete and accurate financial records. First, as a practical matter, complete and accurate financial records assist in operating the business. If records are incomplete or inaccurate, it is difficult for a business to measure success or failure, and it may even be difficult to determine whether or not a business is operating at a profit or at a loss. Second, complete and accurate financial records allow the business to measure all aspects of business and target marketing and development accordingly. Businesses can evaluate the supply chain, marketing avenues, etc. Third, complete and accurate financial records allow investors to evaluate the company. Without such records, investors would not be comfortable investing in the company and without those investors, company growth would likely stall. Accordingly, it is important to be able to show investors why they should invest in a company, while simultaneously showing investors exactly what they are investing in and, to some extent, what they can expect to gain/lose from the investment.  

What are the expectations of managers and supervisors in relation to budget or financial plans?

To successfully manage your organisation’s or team’s financial resources, you need to be familiar with the organisation’s priorities and objectives for the short- and long-term as articulated in its strategic plans, and understand how these are translated into the resulting organisation budget and then into team budgets. Learn more about budgets and and other busienss knoelege by completeing a Certificate IV in Business Administration BSB40515 by enrolling in this course with   General details about Business administration can be found on the Australian training website Your role is to support team members by explaining the team’s budget to them and ensuring this will help them achieve their goals. Any variations or events that impact on the budget need to be identified, documented and negotiated promptly with appropriate personnel within the organisation, such as accountants, frontline managers, and supervisors.  

What are the reports that can be used for financial planning in an organisation?

The financial situation of an organization is shown to its members through various types of statements. They include: - Budget - Income Statement - Project or Event Report - Balance Sheet All financial statements indicate the type of statement, the organisation's name, and the date or time period it covers. Budget - A budget is a written plan that forecasts income (revenue) and expenses (disbursements) for a specified period of time (usually one year). Expressed in dollars, the budget is based on an organisation's goals and ensures realistic planning of programs. Through its use, members can control and co-ordinate finances and programs. Income Statement - This report, also known as a Statement of Operations or a Statement of Receipts and Disbursements, gives a picture of how much money was earned (revenue) by the organization and how much money was spent (expenses) over a specified period of time. Project or Event Report - Organisations often prepare a financial statement to report on specific programs or events. Project reporting not only gives an accurate financial record of activities or events but is also helpful when planning future events. Balance Sheet - A balance sheet is a summary of the financial position of an organisation at a specific point in time

By user23395, ago

What I Wish I’d Known When I Started My Business

I can’t believe it is now almost 4-years since I launched my business and it has been one hell of a ride! There have been days where we were riding on a high and exceeding our sales and customer expectations, and there have been days where we were really worried about whether we would be able to meet our payment obligations and just couldn’t get a sale over the line to save our lives. Business, if you get into it for the right reasons, can be highly rewarding. Even on days where you are not meeting your sales targets. If you get into business just to make money though, you will be in for a huge shock. To avoid this shock or do your best to minimize it think about studying  a Business diploma – course info available here or using the number of resources provided by the Australian government. No success occurs overnight. Success takes time, hard work, perseverance, and determination. It takes the right team to bring out the best of the business, to bring the business to great heights, and to help the business rise up and overcome its hurdles. There were times I really wished I knew some of the things I know now, and I want to share this with you. Hopefully, it can help you cut out a lot of heartbreaking moments and sleepless nights, and help you achieve successes in your business much quicker than I did!

Know your market inside out

This is business basics. Knowing your market inside out, knowing your customer intimately and knowing what they need and what their triggers are can help you build an irresistible offering. Do not ever underestimate the need to know your market inside out. Take insurance startup – Huddle. They saw the crisis of trust customers had with insurers and saw the gap in the market. They pounced on this opportunity and used all the information they could get about their market to market, sell and improve on their offering! Thanks to this, they now provide over $1 billion in insurance coverage for about 500,000 members!

Test out your commercial strategy

Research, analyse, build. Research, analyse, amend. Now, keep repeating this. Your commercial strategy is not a set-and-forget aspect of your business. You need to constantly make sure you have as much intimate details about your market as possible. Even sometimes down to how many times they call their mum! The market is constantly changing and not reviewing and your strategies, your policies and your processes on a regularly basis is a death sentence.  Sometimes, change happens overnight and your business must be ready for it. A good example of this is driverless cars. If you a business that is currently depending on drivers and you don't adapt to the new technology your business will be out of business very soon. A good starting point would be to create a touchpoint strategy. Consider what media you will use to reach your target audience, and what your message will be. Every touchpoint you have with your prospect is a potential to build a relationship and sell, sell, sell; regardless of the market changes. When a customer is loyal to you, and they have a reason to stay loyal to you, even when the market changes, they will continue to buy from you. Give them a reason to stay loyal to you.

Getting your pitch right

If your business is at the capital or fundraising stage, be sure to get your pitch right and practice it with your family and friends before facing potential investors. Family and friends are great at giving you honest and brutal feedback on how you went and what you can improve on. When designing your pitch, you need to make sure you have refined and tested your business plan, and most importantly, know it like the back of your hand. You will be heavily grilled on your business plan by savvy investors and you need to know your strategies, your market, your research, and your projections (as well as how you have arrived at your projections) insanely well. Find out what is the characteristic of a good business here. If your business has already started and you are lacking traction, interview your customers and find out why they have bought. You might need to change your marketing strategy, or your price point, or even your offering itself to serve your market! If your business hasn’t started, be sure you have already tested that your product is something the market needs and that your marketing strategy is going to be viral! Most importantly, your passion needs to show in the delivery of your pitch! Show them how involved and in love you are with your offering! Show them how much your product or service can revolutionise the marketplace! Show them how you are in this for the long run and are ready for the challenges you may face! Don’t show any sign of weakness, especially not knowing your market or your offering well enough. This will put any investor off investing a single dime in your business. Employees also play a big part which is outside the scrope of this post but if you are interested visit this site. You might also want to look at if working from home is really a good idea.

By user23395, ago

Business SWOT Analysis

SWOT Analysis

What is a SWOT analysis in Business?

A SWOT analysis is a useful way to understand and evaluate one’s strengths, weaknesses, opportunities and threats when faced with a decision. What makes a SWOT particularly powerful is that with a little thought, it can help you uncover opportunities that you are well-placed to take advantage of. By understanding the strengths and weaknesses of yourself, or your business, you can then manage and eliminate any threats that may present. What do find out more information on how to complete SWOT analysis for your online business view details of our diploma of Business courses by clicking here for more information or have a look at the diploma of management course information here. If you are not ready to study at the Diploma level you court start by enrolling in a certificate IV level course such as the Certificate IV in Business administration.  This qualification will give you the foundation you need to have a better understanding of business administration tasks.  

How do I do a SWOT analysis for a small business?

First thought of by Albert Humphrey in the 60s, the SWOT analysis is a very powerful tool to help you understand your strengths and weaknesses, or your business’ strengths and weaknesses.  It is important to ask the hard questions, no matter how uncomfortable or confronting it might be. The characteristics of a successful business remain the same regardless if you remain the same regardless if you are trying to change the world with driverless technology or you have a small business at the local business district.  Here are some examples of questions you can ask to help you complete a SWOT analysis.  Strengths
  • What advantages does your business have?
  • What do you do better than anyone else?
  • What unique resources can you draw upon that others cannot?
  • What do people see as your strengths?
  • What is your organisation’s unique selling proposition?
  • What are the benefits of this strategy or this plan?
  • Why would a client choose you over your competitors?
  • What could you improve on?
  • What should you avoid?
  • What are people in your market or your customers likely see as your weakness(es)?
  • What factors cause you to lose sales?
  • What factors cause you to lose customers?
  • What opportunities can you spot?
  • What areas of the market is unserviced or under-serviced?
  • How can you help fix a problem the market/industry / a client has?
  • What changes are there in technology?
  • What local events are there that you might be able to present at?
  • What obstacles do you face?
  • What are your competitors doing?
  • Are there any quality standards or specifications for your job, products or services?
  • Are there any changes occurring within your industry – legislative or technological advancements or consumer sentiment?
  • Do you have any bad debt or cash-flow problems?
  • Could any of your weaknesses seriously threaten you or your business?

A business example of a SWOT analysis

  • Qualified workers
  • Constantly meet regulatory requirements without any haste
  • Able to respond very quickly
  • Can change direction very quickly
  • Low overheads
  • Avoid negative conversations in the workplace
  • Has little to no market presence
  • No funds for marketing
  • Vulnerable to vital staff being sick or leaving the organisation
  • understanding of Budgets and industry
  • More technically capable and cheaper software out on the market
  • Local government wants to encourage small businesses
  • Competitors slow to adopt new technologies
  • Industry expanding with customers now more educated on their options
  • Workforce requirements 
  • Favouritism for staff with a particular manager
  • A small change in the focus of a large competitor might wipe out any market position the business has
  • The downturn in the market
  • Burnout from over working

By user23395, ago

how managers and leaders drive purpose

Leaders Drive Purpose

  In every organisation, it usually falls to the leader to ensure that employees know what makes the organisation run. Only a leader who knows him or herself can do this effectively.   As a leader, it is important to consider what your own purpose is. One question you can ask yourself is – what gets you up in the morning? What is driving you and your purpose? Is it your family? Is it your career? Is it your brand? This gives you the opportunity to reflect and properly understand what your purpose is in order to be effective at work.   For many, it is the opportunity to do what they have always wanted to do. Be it help the elderly in the community, help patients in the emergency department, or even help people find their own purpose.  

How do I determine purpose?

The two questions you can ask is:
  1. Why does my team need to know about purpose?
You need to answer it for yourself first and then explain it to your team. For example, if you are in finance, what makes your work purposeful? This becomes an opportunity to link your team’s functional expertise. You are responsible for maintaining cash flow as well as providing guidance for planning decisions. How you explain that to your team will go a long way toward their understanding the implications of their work. more information about leadership and management is available via this website  
  1. How can I make purpose more relevant to my team?
Your team is looking to you for answers, so you need to make purpose explicit. The easy way to do this is to explain how the work your team does contributes to the smooth running of the organization. A better way is to tell stories about the work. Consider how your customers judge your work. You likely have examples of success that are worth sharing. Returning to our finance example, talk about how one of your colleagues complimented your team on making the budgeting process easier to understand, allowing him to complete the planning process in a more timely fashion. These two questions quantify the role a leader plays in determining the purpose and meaning of work for the team. Many people, however, are searching for deeper meaning, satisfaction, enrichment, and happiness. While these may be existential issues, answers can be found in purposeful work. Let’s take them one at a time. (Baldoni 2011)    

How to instill purpose at work

  1. Mission
Mission is essential to accountability. It helps to be working for a mission-driven organization where people can really embrace and take great pride and satisfaction in the mission and what they are doing to advance it. “Trust is something that doesn’t happen overnight,” says Roger Webb, President of the University of Central Oklahoma. “You can’t make a good speech and greet your employees and all of a sudden [have them] trust you.” Webb likens trust to building a bank account that you accumulate over time. It is important for a leader to show vulnerability at the same time: “You have to fight for them and appreciate their support in return.”
  1. Let people know they matter
“Demonstrate through your actions that people come first,” says Nancy Schlichting, CEO of the Henry Ford Health System. Given the economic hardship the region has endured in the first decade of the twenty-first century, the Henry Ford Health System has cut costs severely. One thing it did not cut was training and development -. “It sent a message to our people that we were serious about our commitment to people,” reports Schlichting. For Schlichting, investment in people is only part of the equation. She makes herself available to anyone in the health system, saying, “People in our organization have complete access to me.” Sometimes that involves helping an employee’s child find a job in the health system, or even airing an issue with a supervisor. As Spiegelman of Beryl Companies says, “There is a link between building a people-focused organization and driving better outcomes and results for your customers.”
  1. Reach out to employees as individuals
When Jim Guest arrived at Consumers Union as its CEO, he made a habit of introducing himself to employees. “I would just drop into people’s offices, total strangers, and say ‘Hey, what are you up to? What are you working on? What’s your job?’” Word soon got around that Guest was truly curious as well as genuinely interested in what employees did and how they did it. Guest continues the practice today by eating in the cafeteria with employees. “I’ll make it a point to sit down at different tables. I often sit with people I don’t even know … and just talk to them.” For Guest, such exchanges yield insights into what is really going on in his organization. “I often learn more from [conversations with employees] than I do from reports I get.” Guest also makes certain that new employees know that his door is open to them. He tells them “feel free to stop me in the hall or to make an appointment and come to my office.” True enough, not many do make those appointments, but Guest says, “I do get stopped in the hall.” Sometimes Guest will turn those impromptu chats into immediate invitations to his office. This is important to employees. As Guest says, “It’s easy to forget how much a small interaction with a chief executive can be so meaningful to people.” Communication is important to Guest’s leadership style. Prior to making decisions, he says, “I’m not looking for a consensus, but I am looking to consult or to gather information from people.” Communicating as he does with people at all levels in the company gives Guest a good sense of what’s going on in the organisation. (Baldoni 2011)  

By user23395, ago

Business telecommunications

Is telecommuting dead?

From IBM Australia to Yahoo!, are we seeing a growing trend in organizations restricting their telecommuting policies? Last week, IT News reported that IBM Australia has sent out a memo to all of its employees about changes to its telecommuting policy. Their HR team will be reviewing each employee’s case and budget to make a decision as to whether it is still appropriate for them to be working remotely from home. To find out information about business statitiosn in Australia click here. Both IBM Australia and Yahoo! have cited that they’re moving towards regrouping their teams in-house so that they can better connect with each other and synergise their operations. I’m sure many of their employees are huffing and puffing, I mean who wants to have to commute back and forth to and from work when you’ve had the privilege of working from home, with no distractions, no hours spent on public transport or in traffic. Some industry leaders have even predicted that it won't be long before many other organisations restrict their employees from the same arrangements. Especially in the wake of weak trading conditions resulting in falling profits and revenues. From an organisation’s point of view, the management team has a duty to make hard decisions – even if it is unpopular with their employees, to ensure the viability of the company. To ensure industry can be successful it needs to ensure staff members are qualified and a popular study option is the accredited business administration course can give you the edge you are looking for in the business world.

Benefits of telecommuting for a business

  1. Save time commuting to and from work each day – traffic and public transport delays can really take a toll on a person.
  2. Fewer sick days – employees who telecommute are more likely to have a healthier lifestyle, with many saying the time they save commuting to and from work, they spend outdoors instead.
  3. No geographical restrictions when hiring.

Disadvantages of working remotely for Businesses

  1. Can be isolating – employees not knowing each other or working in a team environment can really be mentally challenging in trying to bring a team working cohesively together.
  2. Poor communication channels – many have reported that communication is their greatest challenge. For Managers, many who are there to manage their team at times do not know what their team is up to as they are not physically there.
  3. Security concerns – many employees deal with a lot of sensitive data and are privy to secrets of an organisation’s operations. Telecommuting opens an organisation up to possible leaks and accidental breaches.

Future of Business telecommuting

Over the next few years, we can expect to find more and more organisations pulling back their telecommuting arrangements with their employees, especially in the wake of tougher market conditions. Companies will be trying anything they can to reinvigorate their workforce and to reinspire them to help the companies reach their goals. This Article is a good read about how woman are treated in business. More and more companies are also on the hunt for skilled and knowledgeable employees. Those that have strong analytic skills are able to steer the company towards the right direction and help pull the company out of a storm. That is why it is important that you learn as much as you can, put yourself in situations that will push you to practice what you learn, and get qualified! Find out more here about the business diploma  available or look at some of the other online diplomas and certificates

By user23395, ago

How to lead with purpose – managers guide

Lead With Purpose

What is purpose? Purpose shapes vision. Vision is what shines in the distance and serves as a guiding light. Vision is the process of becoming. Becoming what you want to be when you grow up, or in the case of an organisation what you want to be able to do.   For any organisation to be able to achieve their vision, they must first set their values. Values are what hold people together. They embody the beliefs by which people in the organization choose to abide. Take a hospital. Its values define the respect that employees must manifest toward patients as well as toward each other. Words like dignity, ethics, and respect are prevalent. Values, when they are implemented, become measures by which people hold each other accountable. The end of this chapter contains a guide to defining purpose. Taken together, vision, mission, and values underscore the culture, the glue of an organization. While the concept of culture is broad and deep, when it comes to purpose, we can be very direct and to the point. Quite simply, culture is what the employees perceive as reality inside their organizations. It can be open, tolerant, and flexible, or it can be closed, intolerant, and rigid. Culture does not depend on purpose, but it is greatly influenced by it. Open cultures nurture purpose as if it were mutable and alive; closed cultures regard it as defined and inorganic. (Baldoni 2011)  

How does a manager make purpose relevant?

Simply put, you have to link it to the work your employees are doing!   For some organizations, such as the bakery just mentioned, this is easy. Make the dough, bake the goods, sell to customers, and watch them come back for more. Okay, how do you make purpose relevant if you are the distribution manager for a pipe supply company? You work with spreadsheets and you field phone calls from internal and external customers. How do you discuss purpose? You explain to your employees that logistics are the linchpin of the pipe supply operation. If distribution does not gather and warehouse pipe products from the factory or other sources, you have nothing to sell. If you cannot identify and ship products in a timely fashion, customers cannot buy. How you iterate this is critical to purpose. Expression of purpose may begin with words— chiefly, explanations of what the organization does and why it does it. But words go only so far.   Purpose, if it is to be sustainable, must be linked to organizational culture and values. That is vital. Here are some ways to reinforce this connection. “Purpose comes down to having clear-cut, definite goals,” says Pat Williams, bestselling leadership author. “They are powerful motivating forces. Those goals have to be out in front of the organization. They’ve got to be written down [as well as] reminded and reviewed.” Regarding the Orlando Magic, the NBA team where Williams serves as a senior vice-president, “We talk about two things all the time: winning a championship and keeping every seat full. No one in the organization can miss that.” Putting people first, says Michelle Rhee, onetime chancellor of the Washington, D.C., school district, “is about creating a culture that constantly recognizes people for the work they’re doing.” That requires the involvement of a leader who “ensures that people’s voices are heard.” Purpose in education is a straightforward proposition for Rhee. It stems from doing “what’s right and good for kids.” It was a mantra she took personally and one that she preached throughout the community. That kind of clarity is something that every leader in any field should strive to drive throughout their organization. Reducing purpose to a simple statement is not easy, but it can be a valuable tool in clarifying intention for employees. While working in another job prior to running the D.C. school district, Rhee learned that creating the right culture depends on doing the little things that matter to people— for example, being accessible to the CEO. It is important, says Rhee, that people have a voice with the leader at the top. “I think oftentimes it’s the smaller things that feel more personalized that make people feel valued and recognized.” When serving as chancellor of the school district, Rhee made a habit of reaching out regularly to all levels of the organization. She would personally call a principal or a teacher and thank the individual for the good work he or she was doing. (Baldoni 2011)  

Dangers of having no purpose

Purpose may seem elusive, and it may be tempting to abandon the concept altogether, but consider the alternative: lack of purpose. This leads to organizational listlessness. People may be doing their individual jobs appropriately, but soon each will come to the realization that individual contributions are good, but not great. What is necessary is to get people to pull together for the common cause. “I don’t think you can hit purpose enough as a senior leader,” says George Reed, a retired Army colonel who consults in the corporate sector. “It is one of those things that can be under communicated by an order of magnitude. You cannot oversell, over pronounce ‘Here’s why we’re here.’” If the purpose is not communicated, Reed believes, it will be lost in the “urgencies of the day” that cause people to forget their original intentions and their passion. “The senior leader who bangs that drum, who serves as the symbolic voice of the organization … reminds their people that what they’re doing is important.”  Leadership and management are skills worth learning - click here for more info about this course (Baldoni 2011)    


By user23395, ago

Managers leading by Example

Leaders Have to Walk the Talk

Most leaders we know of are not the type to listen to their own advice, I myself am guilty of this. We constantly hear that we need to reinvent the company and we have to find ways to get the entire workforce living and demonstrating the core values through their decisions and actions, but most of us leaders would rather not and would rather just mouth the words to our employees.  

Employees expectations

A lot of employees are not motivated to live up to the company’s values because their own leaders don’t lead by example. They constantly hear that they need to do this, they need to do that, they need to be this, they need to be that. But this embodiment is greatly lacking in upper management.   Take the banks for example. Upper management is constantly telling their employees to be honest and conduct themselves in utmost integrity to preserve the reputation of the bank. However, the leaders themselves don’t conduct themselves in this manner and they develop targets that does not resonate with conducting oneself with honesty and integrity. They make it a focus that targets are met at all costs. This tells the employees that even though the bank’s values are to conduct themselves with honesty and integrity, they don’t actually have to do so, just as long as targets are met. Some companies even send their management personnel to special leadership and management training - (course information here) to try and improve the company’s bottom line, but not on employee relations.  

Open the channels of communication

As Reliant’s senior leaders opened the channels of communication, people throughout the ranks of the organization began to emulate their behavior. For example, Mike Kuznar, the director of Reliant’s Customer Care group, held a series of Meals with Mike, modeled after the Tuesday Talks. Learn the basics of leadership by going to the website or you can learn the basics of managing staff by going to this website.    The meals were open to any member of the customer service team. Mike fielded their tough questions and gave frank answers. For employees who were anxious about losing their jobs, this was an opportunity to learn about the company’s performance at the local level. Mike helped them understand how their everyday work fit into the bigger picture of the company’s challenges. In the end, Reliant survived. Its share price bounced back. The company retained most of its customers. And the informal organization grew stronger than ever. In a turnaround like Reliant’s, leaders are tempted to rely on formal mechanisms and measures. They want to cut costs, keep tight control, deliver messages and directives from the top. Reliant did all these things, but its leaders differ from their counterparts at other companies in that they complemented the necessary formal actions with a values-driven effort that bolstered important and visible behaviors throughout the informal organization and accelerated its recovery. Unfortunately, Reliant’s challenges did not end after the turnaround. As the company geared up for growth, it was struck by a perfect storm of external factors beyond anyone’s control. In 2008, Hurricane Ike destroyed Galveston, one of Reliant’s major markets. Later that year, the global credit crisis struck, wiping out critical financial support that Reliant needed in the wake of Ike.   At last, in 2009, Reliant was bought by NRG Energy. None of this, however, negates the turnaround accomplishment that preceded it. Ultimately, the company’s recovery story is one of success. Its ability to survive the tremendous challenges it faced by using values as a driving force in the journey sets it apart from companies that espouse values but do not live them.  

How would leaders walk the walk

Managers have to be more aware of their actions and speech. Everything they do and say are watched and listened to intently by others around them and will influence the way the team functions.   Managers should also try to do the work of their employees so that they understand the challenges their employees face and can develop policies and processes that can help and motivate the employees to embody the company’s values.   Managers should also have regular catch ups with their teams and hold an open forum for employees to share their thoughts and opinions. They should not be judgemental and should think of ways to address their concerns and have idea sharing conversations instead of being highly critical of them.    

By user23395, ago