Think Like a General Manager, Whether You Want to Be One or Not

© viktor88 - Fotolia.com
© viktor88 - Fotolia.com

This month we covered the key aspects of how general managers think and why it’s important to think like a GM, whether or not you want to be one.

Here are some of the things we talked about in Think Like a General Manager:

Understand the business and the P&L

  • Know how the business makes money. Where do the revenues come from? Where do the profits come from? What are the fixed and variable expenses? Where do you and your team fit in the P&L?
  • Make sure your whole team understands the P&L. We talked about a simple way to share how the P&L works with everyone on your team. It’s important for each person to know where the revenues, profits, and costs fit, and where they and their role fit, personally in the P&L. (The webinar includes a worksheet on this).
  • What do YOU cost? If your salary is $100k/year, and your business makes a 10 percent profit on units that sell for $10k each, then your sales force has to bring in 1000 units, or $1 million of revenue, to pay your salary. Are you worth $1 million a year? Likewise, if you propose to hire another person, the sales force will need to sell another $1 million to pay for them. Does your need justify an additional $1M million a year in revenue? Why? If you can’t answer, you shouldn’t be asking.
  • Educate your team. Talk about the P&L frequently. Invite customers, partners and people from other functions into your staff meetings to share their perspective on what drives the business and what is important to them.
  • More Innovation. When more people understand how the company really makes money, and where the costs come from, I find that they get more creative, not less. When they know what is important, they solve more of the right problems, and invent more valuable solutions.

Tradeoffs

  • A GM’s job is about tradeoffs. When a general manager wakes up in the morning their job is to make tradeoffs. Should I invest in more sales people? Or in making the product better? Should we hire more services people and try to get more profit from service than product? Or should we invest in marketing? Or in training the sales force?
  • Know the context. What tradeoffs is GM is considering? Before you make any kind of proposal, be ready to propose your own tradeoffs, show that you understand the whole business. Don’t always just advocate for your function or project. Put the business in the center of your discussion, not your project.
  • Don’t always be seen as asking for new money. You need to fund some new work out of your existing budget. You need to do the things you did last time for less money this time. We talked about why this is so hard. You already don’t have enough resources, what do you do? You will not be credible if you are not seen making tradeoffs and shifts within your own function. We talked about how to do this.
  • Your strategy is where you put your resources. Know the company’s strategy. Know where the company is investing and cutting and why. Know how the company is measuring success. Make sure your proposals fit into the right context.

Timing and scope

  • Know the size of what you are asking. It’s important to get the scope right. We talked about how to assess the scope of your initiative relative to the scope of what the GM is worried about, and how to position your piece the right way.
  • Know the business calendar. Always know what else the GM has going on in the normal cycle of quarter ends, board meetings, or key program rollouts. Know how to strike at the right time, and how to ask for the right amount of time.

Communicate and persuade

  • Have a business case. GM’s need business cases to make decisions. “We are overloaded” is not a business case. We talked about how to make your communications more persuasive by always making the business case clear. (There is an outline of a business case in the webinar presentation.)
  • Personal, Engaging style. Don’t try too hard to be overly impressive. You will come across as trying to be overly impressive. Instead, be prepared, be relevant and be engaging. Be human. Execs are humans too, and they like to have conversations with real people. We talked about how to get this right and wrong.

Want more? You can download the complete webinar here.

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This was originally published on Patty Azzarello’s Business Leadership Blog. Her new book is Rise: How to be Really Successful at Work and LIKE Your Life.

Patty Azzarello is the founder and CEO of Azzarello Group. She's also an executive, best-selling author, speaker and CEO/business advisor. She became the youngest general manager at HP at the age of 33, ran a billion dollar software business at 35, and became a CEO for the first time at 38 (all without turning into a self-centered, miserable jerk). You can find her at patty@azzarellogroup.com .

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