Self assessment or self-delusion?

One barrier you will come across that prevents business owners taking advice from you or anyone else is the belief that they are already a good manager and leader.

Of course, they may be.  But most business owners have lots to learn.

Research by HBR1 shows that many managers (and by extension, business owners) are unable to judge objectively how well or poorly their business is run. In fact, the research found zero correlation between self-perceived manageemnt quality and actual performance.

The same report finds that only 6% of businesses are well run, and that the difference between them and the worst-run businesses equates to 25% in growth rate and 75% in productivity.

This is useful data for you to introduce into your blogs or networking conversations.

If you get the chance, introduce some figures . For example, take a modest business (say £1m turnover, 10% net margin, 5% annual growth) and assume the owner is in the middle of the pack (12.5% potential improvement in growth, 37.5% potential improvement in productivity). Over 5 years, the gap is over £200k of net profit.

Now the assumptions are subject to debate - but the overall argument isn't.  Your coaching fees pale into insignificance when compared with the benefits you can offer most business owners.

1Why Do We Undervalue Competent Management?, Raffaella Sadun, Nicholas Bloom, and John Van Reenen, October 2017

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