Creating a Senior Management Team

All businesses need a range of skills in order to survive and grow. As a small business owner, it’s likely that you’ll have to take on multiple roles out of necessity. You will probably find that you are better at some roles than others.

If you want your business to grow, it will reach a level where these necessary skills will need to be improved and expanded. Getting the right mix of people to complement and strengthen your business is essential. Having an effective management team helps you create a more capable and successful business.

This guide outlines thoughtful processes and methods that will help you in setting up a management team. It also outlines the benefits of building an effective management team for your business.

Role of the management team

A single director or manager rarely has the combination of skills that a management team can have. Each member of a management team can focus on their own area of expertise. Additionally, the company benefits from having all of its direction and goals seen from a variety of perspectives.

The rapport that exists within a team is very important and can add value beyond the individual talents and skills of each employee. Teams whose members get along well with each other contribute significantly to the overall success of their businesses. A messy management team could very well put off everyone involved in your company, e.g. eg, employees, consumers, customers or suppliers. This could ultimately cause the company to fail.

A strong management team is especially important if you want your business as a whole to grow and develop. As the business grows, a management team is also important for spreading leadership accountability. It is crucial if:

  • your business operates in more than one location
  • you are involved in more than one type of business and/or industry and your company has different cultures, for example following a merger or acquisition

It is important to remember that management teams can also operate at different levels. Consider creating teams to help operate particular locations or divisions. This provides additional opportunities for staff development and involvement and will benefit your business.

It can be helpful to find a training course that discusses how a management team can support your business.

Skill set of a senior management team

Skills required to run a successful business include:

  • sales and marketing
  • production / operations
  • finance
  • management
  • procurement and purchasing

Not all companies need to possess these skills at the same level or in the same combination. While all businesses need sales and management skills, for some production will be critical, while for others purchasing ability will be more important.

A review of your business should identify the skills that are important to it and the skills that your current staff, including yourself, already have. Should they be developed through training or monitoring?

Certain types of expertise might only be needed occasionally, and it would be better to outsource as needed, e.g. eg, using a financial advisor on a short-term basis, during a capital expansion phase.

Another choice could be to use external directors or non-executive directors who can bring important knowledge and commercial experience.

One of your key tasks is to ensure that all roles and responsibilities are clear and that good communication structures are in place both in formal areas (management meetings, briefings, progress reports) and not formal (team building sessions, general feedback).

Creation of the management team

You might consider the following steps when building your management team:

  1. Look at how your business has progressed so far and decide where you want it to go.
  2. Calculate your performance within the market compared to your competitors. Analyze any strength, weakness, opportunity or threat, commonly known as a SWOT analysis, to identify the gaps between where your business is now and where you would like it to go.
  3. Analyze what skills the company needs and take into account what strengths and weaknesses you have personally.
  4. Know the skills, potential and ambitions of your existing staff and consider less defined skills, such as leadership qualities.
  5. Analyze the match of existing skills against business requirements and prioritize the acquisition of missing skills.
  6. Decide where staff development could fill skill needs and consider reassigning responsibilities to create a unified team, rather than a group of individual managers.
  7. Re-examine any skill gaps.


Consider other options such as consultants, outsourcing, contract workers, with a cost/benefit analysis.
Prioritize the permanent recruitment of personnel. When possible, it is best to plan ahead when recruiting for future positions and anticipate any potential skills gaps.


Training and development of managers

When building a management team, it is important to recognize that most people will need support and training to be able to take on the new roles that are being asked of them. , especially if promoted from within an organization.

Formal training may be appropriate in order to increase their specialist skills, but the main support will likely be to help them grow confidently in their new management role.

A wide range of training choices are now available, including formal courses taught externally or in-house. Less formal in-house training sessions can also be helpful, and individuals can benefit from on-site training, e-learning, or part-time college courses.

In addition to training in the defined skills, consideration should also be given to developing team spirit and training managers in diversity and flexibility. Team building exercises can play an important role in helping the management team better understand and communicate with each other.

Performance management for executives

Building a management team is an ongoing process. Performance feedback should identify gaps, leading to training and future improvement.

As you delegate management responsibilities and become more removed from the day-to-day atmosphere of the organization, you will need to have good systems in place to be able to monitor performance. A proper balance must be struck. You need to get enough feedback from managers to appreciate the overall situation of the business, but you also need to give them the freedom to manage the areas assigned to them.

The performance appraisal can usually be divided into two parts; calculation and evaluation.

The performance calculation is based on key performance indicators (KPIs) , which are objective factors that can be clearly identified and measured, such as:

  • turnover
  • production volume
  • financial performance
  • equipment downtime

Targets are the cornerstones of KPIs. Monitoring these should be part of a regular reporting system, perhaps in the form of written monthly reports.

It shouldn’t replace more informal and subjective feedback, for example, through weekly progress meetings, to help you stay in touch. Make sure the team is not over-managed during this process. Management experts always consider ways to be able to quantify the less tangible factors of performance management. The balanced scorecard method is an example of such a tool.

The balanced scorecard method is a management tool that allows companies to define their goals and implement them. This then provides feedback that allows them to implement a continuous improvement program.

Personal performance appraisal and rewards

In addition to calculating objective factors through key performance indicators, all managers should be part of a formal appraisal system to assess personal development.

A good appraisal system can be extremely helpful in identifying support needs, and is also one of the best ways to judge performance, especially in areas of performance that are not easily measured. An assessment allows discussion of personal goals and agreement on relevant tasks and targets.

An effective evaluation system should involve four key steps:

  1. Set goals – be clear in your mind about what you require of employees and make sure they know it.
  2. Manage performance – give your employees the tools, resources and training they need to perform well.
  3. Perform the evaluation – monitor and evaluate your employees’ performance, discuss these evaluations with your employees and agree on future goals.
  4. Offer rewards and/or recourse – Consider offering rewards and/or promotion based on the review and decide how to address poor performance. However, be aware that there can be dangers as well as benefits to tying rewards to performance.

New methodologies in assessment include the 360-degree assessment , named for the holistic view it encourages, in which information regarding a manager’s performance is obtained from as many from relevant sources as possible such as managers, peers and junior staff.

Executive-level incentives don’t always have to be financial in nature and can be tailored to different types of success. You need to think about any major gaps between managers that might be created by such an incentive plan.

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