Every small-business owner suffers the problem of management and accountability. It’s much easier to be friends with the people you work with than to manage them well.

Correct management means setting expectations well and then following up on results. Compare results with expectations. People on a team are held accountable only if management actually does the work of tracking results and communicating results, after the fact, to the people responsible.

Metrics are part of the problem. As a rule we don’t develop the right metrics for people. Metrics aren’t right unless the people responsible understand them and believe in them. Will the measurement scheme show good performances and bad performances?

The metrics should be built into the plan. Remember, people need metrics. People want metrics.

Then you have to track. That’s where the plan-as-you-go business plan creates a management advantage, because tracking and following up is part of its most important pieces. Set the review schedules in advance, make sure you have the right participants for the review, and then do it.

In good teams, the negative feedback is in the metric. Nobody has to scold or lecture, because the team participated in generating the plan and the team reviews it, and good performances make people proud and happy, and bad performances make people embarrassed. It happens automatically. It’s part of the planning process.

And you must avoid the crystal ball and chain (see the next section). Sometimes — actually, often — metrics go sour because assumptions have chained. Unforeseen events happened. You manage these times collaboratively, separating the effort from the results. People on your team see that and they believe in the process, and they’ll continue to contribute.

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Tim BerryTim Berry
Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.