How to Build a Management Team

Co-authored by Jack Herrick

Last Updated: September 27, 2022 References

Having a strong and effective management team in place is essential for the growth and success of any company. As the founder of a small business or a newly appointed executive of an established company, you know you cannot do everything on your own, and you will need a skilled group of experts who can help you run the company. Build a management team by assessing which skills and talents you need, recruiting leaders to work with you and giving them the authority and flexibility to make decisions for your business.

Part 1

Part 1 of 3:

Evaluating Your Business Needs

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Examine the state of your company. Assessing the needs of your company is one of the most important things in building a good management team. Without this key assessment, you won’t know what sort of people you need to grow your company. Most importantly, assessing the state of your company will help you determine your management weaknesses and strengths. ^{[1]
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Construct an organizational chart that focuses on manager responsibility. Creating an organizational chart for your company will help you to identify which managers are responsible for which aspects of your business. You might find out that you have overlap or you are lacking key personnel to manage an aspect of your organization. Fundamentally, an organizational chart will help you visualize your company and get a better idea of where you have gaps in leadership.^{[2]
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3
Develop a strategic plan. Without a strategic plan, you won’t know where your business will be in the short and long term, and as a result, you won’t know what sort of managers you’ll need to meet your goals. Once you’ve developed your strategic plan, you’ll be better able to identify your management team needs.
- Determine the state of your business.
- Plan where you want to be in 1, 5 and 10 years.
- Decide what you need to do to get there. Does this involve expanding into a new market?^{[3]
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4
Understand your own weaknesses as a leader. This is perhaps one of the most important steps in creating a successful management team. After all, the buck stops with you. You can’t know or do everything. Don’t see your weaknesses as a strength. Fundamentally, understanding your weaknesses and taking steps to remedy those weaknesses is actually a strength.
- Spend some time reflecting on your own weaknesses to determine what sort of help you’ll need running your company.
- If you lack sales skills, you will need a strong Sales Director on your team.
- If accounting is not a strength, you will need a Chief Financial Officer or Finance Director.
- Be willing to include managers who are better than you at certain things. You will need to put your ego aside for the sake of your business.^{[4]
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Request a professional assessment from people outside your organization. It is very hard for people inside an organization to identify the organization’s strengths and weaknesses. This is for several reasons, but it’s often because we’re unable to critically evaluate ourselves. As a result, you should request an assessment from someone outside of your organization. This outside auditor might be able to identify weaknesses in your management team better than you.
- Hire an outside consulting firm to assess your business and management team.
- Survey your clients on your business.
- Talk to colleagues and friends in your industry.^{[5]
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Get input from your people inside your organization. Sometimes the people who best know the problems with an organization are those within it. Make a concerted effort to get input from your employees and partners about your company. Listening to a wide range of opinions will help you determine who you really need on your management team.
- Create a way for anonymous feedback and constructive criticism within your organization.
- Put together a board of advisors made up of senior managers and senior employees. Even if your business is small, having a group of advisors you can regularly rely on will help you streamline your management.
- Regularly visit and talk to and listen to your employees – at all levels. ^{[6]
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Assess your current management team. This might seem like something you don't want to do, but in order to go forward, you need to assess your current team to see if they meet or exceed the skills and performance you need to meet your goals and achieve your strategic plan.
- If a current manager does not measure up, consider letting them go, demoting them, or reassigning them to a position that better suits their skill set.
- If current managers seem gifted and skilled but are in the wrong position, reassign them to positions that will allow them to use their talents the best.
- Communicate with your managers throughout the assessment process, try to be transparent, and treat your managers with respect.
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Create a list of positions you need to improve or create. Using all of the information you’ve gathered, implement change and create the best management team possible for your organization. Don’t be afraid to let people go, demote people, have people switch positions, or even promote junior employees above more senior employees. Your goal is to create the best management team you can.

Part 2

Part 2 of 3:

Recruiting Strong Team Members

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Promote from within. If you have a few employees who know your company well, consider which ones have leadership potential. Often times, people who already work in your company will make the best managers. Consider the qualifications of your current employees, and if you have someone who meets the criteria for a management position, promote them.
- Communicate to your employees that you are restructuring your management team, and you are looking to promote or create new positions.
- Approach current managers and see if they have any ideas about employees that are management material.
- Talk to the employees who you think might make good members of your management team. Discuss their level of interest and your overall vision for the organization. ^{[7]
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Recruit talented leaders in your industry. Since you now know what areas of your company need stronger managers, you can focus on hiring talented individuals in your industry who have an expertise that you need. Search wide and make sure to advertise your search in a number of publications and outlets.
- List job openings with major online job sites.
- Advertise positions in trade journals and newspapers.
- Communicate your need for new managers at conferences and to other business leaders you know personally.
- Send someone to job fairs at college campuses, in your community, or at national conventions and conferences.^{[8]
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Find new managers through your existing social and professional networks. Locating new managers through less public channels might be good if you have a small company and you know exactly what type of person you need. This way, you can personally recruit people you’ve met at conferences or through other channels, and you’ll be confident as to their abilities and their character.
- Attend national conferences and conventions related to your industry and meet new people you might recruit.
- Browse LinkedIn or other online professional networking sites for people you may know, or people who might be in your broader network.
- Talk to other senior executives or business owners about your need. They might know someone who fits the position you’ll be hiring for.^{[9]
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Get help from a professional search firm. If you have a good idea of the position you want to hire for, but no idea where to look, invest in the skills of a professional headhunter or executive recruiter. This service might result in your finding the exact type of candidate you need.
- You’ll have to pay a fee to the search firm.
- The search firm will tailor their search to your exact needs.
- Search firms often draw on a much larger geographical area and on a larger pool of possible candidates than you might be able to reach on your own.^{[10]
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Part 3

Part 3 of 3:

Training a Successful Management Team

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Define each manager’s role clearly. When hiring a new part of your management team or creating a new position, make sure that the individual’s role is defined clearly. There is nothing worse than having managers coming into conflict with each other. Taking care of this potential problem ahead of time will reduce the possibility of conflict in the future.
- Explain your broader expectations for each manager as a member of your team.
- Make sure managers have authority to act independently when they need.
- Explicitly outline the nature of a manager’s job and responsibilities.^{[11]
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2
Build a company culture. One of the most important things you’ll need to do is develop a culture within your organization that nurtures best practices, communication, and collaboration. This, though, can be very difficult to achieve, and will take substantial effort over time.
- Explicitly outline your company’s core values to your employees. If you’re in service, you should include something like customer satisfaction. If you’re in manufacturing, you should name quality.
- Lead by example. Leadership sets the tone of a company’s culture. Whatever your core values are, make sure you live them and demonstrate them every day to your employees and to your customers.
- Nurture your employees and treat them as valuable members of a team. Employees won’t follow your lead if they don’t respect you, and if they feel you don’t respect them.^{[12]
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Foster communication between your employees. Communication is perhaps the most important part of running a successful company. Your management team should communicate and make sure that your employees are communicating with each other.
- Set up group meetings. Every month or two, you should have a meeting of your entire management team to discuss challenges and issues confronting your company.
- Set up individualized meetings. Once you have your management team assembled, meet with your managers at least every couple of months to talk to them about the challenges and opportunities they face every day.
- Set up socials every couple of months. Company sponsored picnics or baseball games are a great way for everyone to get to know each other and to open the lines of communication during off-hours. This will also help reinforce your company culture.^{[13]
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Promote an environment of respect. Respect is key in creating a management team that successfully interacts with each other in order to grow the company. Managers who respect each other and the top leadership of the company are more likely to go above and beyond in order to fulfill their jobs.
- Treat your managers the way you would want to be treated.
- Offer competitive pay and bonuses for excellent work.
- Listen to your managers when they have concerns or suggestions.
- Explain your expectations. The members of your newly formed management team will need to understand clearly their roles and responsibilities.
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Delegate the necessary tasks and responsibilities. Do not be afraid to give up some of the things you have had to manage out of necessity. Once you’ve got your management team in place, let them do their jobs. After all, you hired them because you had faith in their intelligence and ability. Not relinquishing power and authority will only undermine everything you’ve tried to accomplish.^{[14]
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Give your management team the authority to do what they need to do. Managers do not perform well if they have a lot of responsibility, but no authority. A good chief executive will observe their managers and assess their work periodically, rather than micromanage.
- Trust your management team to make good decisions and oversee their respective departments properly.
- Never micromanage. If you had enough faith to hire someone, let them do their job without interference.
- Authority also includes proper resources (money and people).
- More authority given to managers down the chain of leadership will enable managers to deal with problems quicker and take advantage of opportunities faster.^{[15]
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Establish clear objectives or S.M.A.R.T. goals. Launching a management by objective plan that is clear and laid out to your managers will help build your management team by keeping everyone focused on common goals. A S.M.A.R.T plan will enable you to better assess your managers when the time comes. These goals are:
- Specific. You need to describe the specific goals everyone should work to achieve.
- Measurable. Your manager's work towards their individual and shared goals should be measurable, and they should understand those metrics.
- Achievable. Your goals need to be achievable. They should not be goals that can only be achieved under the best circumstances or be merely aspirational.
- Relevant. Your goals need to be related to the business strategy being implemented. Focus is key to achieving long term objectives.
- Time-based. Your goals need to be set with a time frame in mind. For instance, if you hope to increase sales by 10%, your goal should be to increase sales by 10% in a year, not during some vague period of time.^{[16]
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Assess your management team, periodically. Another important part of building a strong management team is to make sure that team is functioning all the time. Make sure to monitor your team and assess individual work and team collaboration regularly. This will let you know if your team is working well and succeeding.
- Review reports of your managers on the goals you’ve laid out to them.
- Meet with your team members constantly, not only if something is going wrong.
- If a team member has demonstrated consistent success, reward and praise them. Criticize them in private, not in front of the rest of the team.
- If a team member has failed at their job several times, consider replacing them or reassigning them.^{[17]
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