Skills and training for directors and owners

As a business owner or director, you need many different skills for your business to succeed.

You may be a first-class engineer, but unless you can sell your product, your business could fail. Likewise, you could be a wizard financier, but unless the people you employ are well managed, your business could collapse.

Running a successful business means being able to access many skills. As your business grows, the range and complexity of skills your business needs will grow too.

This guide outlines the kind of skills that businesses need to function successfully and outlines the skills required by those heading a business, eg people management, leadership, team-building and strategy-setting. It will advise you on where to go to find help and training to ensure all these skills needs are met in your business.

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The core skills all businesses require

As a business director or owner it’s essential you can identify and meet the core skills your business needs to be successful.

These skills will be the same whatever business you run – whether you’re a sole-trading graphic designer or you head a manufacturing company employing dozens of people.

There are intangible skills you will need, such as leadership skills, the ability to cope with long hours and hard work, and the inner resources to deal with stress and risk-taking. They also include strategy-setting and the ability to build and manage a team.

There are also functional skills that all businesses need. The smaller your business, the more of these skills you will need personally:

• finance – including cashflow planning, credit management and managing relationships with your bank and accountant
• marketing – including advertising, promotion and public relations
• sales – including pricing, negotiating, customer service and tracking competitors
• procurement and buying – including tendering, managing contracts, stock control and inventory planning
• administration – including bookkeeping, billing, accounts preparation and payroll handling
• personnel – including recruitment, dispute resolution, motivating staff and managing training
• personal business skills – including computer, written and oral communication, and organisational skills

To run a successful business it’s essential you recognise the limits of your abilities. So, as a business owner or director you also need the skill to know when it’s best to hand over tasks to others by:

• delegating
• recruiting
• outsourcing

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Skills required by growing businesses

As your business grows, the skills your business needs to access will grow too. For example:

• as your finance arrangements become more complex, you’ll need staff to manage company accounts, and find and manage outside investment
• your marketing may need to be more sophisticated – therefore you’ll need to understand advertising and the media
• the number of employees may increase to a point where you need to hire HR professionals, who may also help your business comply with employment law
• if your business is involved in a sector where health and safety is particularly important, eg construction or manufacturing, you may need to hire health and safety professionals
• new equipment and/or processes in your business may mean that you need to hire technical specialists
• as your IT system becomes more complex, you may need to have in-house IT knowledge

As the owner or director of a successful growing business it is essential that you recognise when new skills are needed and you take the right steps to meet them.

You are unlikely to be able to find the time or have the ability to meet most of them yourself. Consider:

• building a management team
• delegating responsibility to other staff
• recruiting to fill a skills gap
• outsourcing the work to a specialist contractor
• training existing staff to meet your skills needs

Professional and career development loans (PCDLs)

To help them improve their skills employees can apply for a low-interest loan of between £300 and £10,000 to fund a work-related training course.

Find out about PCDLs on the GOV website [opens in a new window]

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Key skills for owners and directors: leadership

Strong leadership and a sense of direction are hallmarks of almost all successful businesses. Good leaders offer direction to people, get them to share his or her vision for the business, and aim to create the conditions for them to achieve results.

You can show leadership to staff by:

• involving them in decision-making
• providing personal encouragement
• recognising and rewarding good performance
• helping to build their confidence to use their own initiative
• inspiring them with a vision for success
• ensuring good two-way communication

Both you and your directors will need to use different skills at different times – there’s no ‘one size fits all’ approach to leadership. In addition the right leadership style will depend on your business and your own character. A softer, mentoring style of leadership may be appropriate – or you may opt for a more charismatic approach.

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Key skills for owners and directors: strategy

All businesses need a strategy to succeed. A business strategy is different from a business plan. It is longer, looks further ahead and is more visionary.

It’s easy to lose sight of the larger context when you’re busy running a business, particularly a small one. But spending time on strategy will help you:

• know where your business is heading and how to position it to get there
• understand the challenges and opportunities your business faces and the best ways to address them
• improve the overall performance of your business

Importantly, the task of forming a strategy for your business should not be delegated. Rather, as your business grows you can spend more time on it as others handle day-to-day activities.

Tools to help you determine strategy

Many business tools can help you determine strategy. A popular one is a SWOT analysis, in which you:

• consider all your business strengths
• consider all your business weaknesses
• identify any business opportunities
• identify any threats facing your business

Analysing your results carefully will show you how to build on strengths, resolve weaknesses, exploit opportunities and avoid threats. Read our advice on carrying out a SWOT analysis. 

Another strategy tool is a gap analysis, in which you analyse in detail where your business is now and then consider where you want it to be in the future. Next, you analyse the gap between the two in order to find ways to bridge it.

Forming your strategy

A business strategy should be realistic, putting in place measurable targets for the medium term. It should be reviewed regularly.

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Key skills for owners and directors: delegation

Delegating involves passing on the responsibility for completing a task or controlling a process in your business. You may find it difficult if you are used to completing most tasks yourself.

Some business owners and directors fear losing control. Others fear nobody will be able to do a task as well as they can. Some resent the time it takes to train people to take over, and some insist they want to remain in touch.

Effective delegation, however, makes good business sense because it:

• frees you up for forward and innovative business thinking
• ensures your team’s potential is maximised
• builds trust between you and your employees

How to delegate

Write a list of everything you do. Ask yourself whether it is essential you do all these tasks. Could your time be better spent? Could others be trained to take over? Might others even be better suited to the task than you?

Delegate if it will prove more cost-effective to do so.

Remember though:

• Training can take time. Don’t expect to reap dividends immediately.
• Others may do things differently to you – but their way could be better.
• Your team members should feel supported and have their work reviewed. However, overbearing supervision can prove counter-productive.
• Good communication makes good delegation.
• Delegation might be best achieved through outsourcing.

Remember that you remain ultimately responsible for delegated tasks. You cannot delegate control of your team or your final responsibility for its success or failure.

Above all, you cannot delegate your responsibility for the direction in which your business is heading.

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Key skills for owners: building a management team

A single director or manager rarely has the combination of skills that are required to run a business successfully.

Therefore, for your business to succeed, you will have to build a successful management team.

The skills a management team requires

Before recruiting managers, you must first analyse what skills the business requires and consider your own strengths and weaknesses.

It’s important that the skills in any management team complement rather than duplicate each other. Therefore, you should aim to recruit managers whose strengths are in areas of the business where you think you are weakest.

You may need to recruit managers who have expertise in, for example:

• finance
• production
• administration
• sales and marketing
• procurement and buying

The exact skills mix will vary from business to business. While all businesses need sales and administration skills, for some production will be critical, while in others buying ability will be more important.

However, whatever the mix, the business will benefit from having its overall direction and goals viewed from different perspectives.

Note that you might only need certain types of expertise from time to time. In these circumstances, it may be better to:

• use outside directors or non-executive directors
• outsource, eg use a financial consultant on a short-term basis during a capital expansion phase

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

Other considerations when building a management team

When building a management team, you should:

• Review your business’ progress to date and decide what direction you want it to go in – see our guide on how to measure performance and set targets.
• Measure your performance in the market against your competitors. Analyse any strengths, weaknesses, opportunities or threats – commonly known as a SWOT analysis – to identify what gaps there are between where the business is and where you would like it to go.
• Discover what skills, potential and ambitions your existing staff have and consider less-defined skills such as leadership qualities.
• Establish if any existing staff – perhaps with some training and development – could fill skills gaps. Consider reallocating responsibilities to create a genuine team, rather than a group of individual managers.
• If you conclude that you do need to recruit an employee, find people who are team players, who trust each other and will interact well.
• Define everybody’s role and responsibilities within the team clearly. Relate these roles back to your business strategy.
• Ensure the new members of your management team are in tune with the goals of your business and the way in which these will be achieved.
• Re-examine any skills gaps and take steps to fill them.

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Key skills for owners and directors: managing your team

If your business is to work at maximum efficiency and achieve its full potential, all your employees need to work together as a well-functioning team. This means you must acquire team-management skills.

You may have different teams that need to be managed in different ways. For instance, it’s just as important to manage your senior management team as it is to manage your more junior staff members.

For your teams to work well you should:

• ensure everybody knows their role
• set clear goals and communicate them
• put in place clear lines of communication
• clarify lines of responsibility
• involve all team members in decision-making as much as possible
• introduce ways to manage and resolve differences
• learn how to lead effective meetings
• encourage training and personal development
• build in regular reviews
• be a ready and willing listener
• encourage and promote diversity
• motivate team members
• reward initiative

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Skills and training for company directors

When you take on the role of a company director you take on very clearly-defined responsibilities.

An obvious responsibility is ensuring that certain documents, such as annual returns, are filed with Companies House. This may not sound onerous but, on average, each year more than 1,000 directors are prosecuted for failing to do it. Read about the role of a company director on the GOV website [opens in a new window].

The Companies Act 2006 sets out the statutory duties of directors. This formally sets out the obligations of company directors and includes the duty to promote the success of the company and in doing so to consider the wider factors such as the environment and the community.

There are also non-legal obligations for directors, such as the requirements to form strategy and to manage your team well, which are necessary to ensure your business succeeds.

See the pages in this guide on key skills for owners and directors: strategy and on key skills for owners and directors: managing your team.

Training can prove very helpful for building both legal and non-legal skills areas.

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Sources of leadership training

As a business owner or director you could benefit from leadership training, ie training designed to help you maximise your own and your business’ performance.

Leadership training will help you:

• inspire your team
• influence others
• bring about positive change in your business

Leadership training is as much about personal development as it is about learning set skills through formal training. For this reason, mentoring is often chosen as the best way to develop leadership potential.

Mentoring is an informal, generally unstructured process in which a mentor, usually someone very experienced in business, spends time developing the inner resources of the mentee. It is not a teacher-pupil relationship. Rather, the mentor is more of a guide and somebody against whom ideas can be safely sounded out.

Networking is another important type of skill development for business owners and directors. A wide variety of business networks exists – including those for new businesses, young owners and women owners. These allow you to learn from people running similar businesses and facing similar obstacles.

For both networking and mentoring, your local chamber of commerce can be a useful point of contact. You can locate your local chamber of commerce using the British Chambers of Commerce website [opens in a new window].

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CASE STUDY

Here’s how management training improved our business

Chris Lundie started his business, Covert Security Agency Ltd, in 2001. Based in Dundee, the company employs 90 staff and supplies licensed uniformed and undercover security officers to the UK commercial market. Rapid growth plus recent expansion into the contract cleaning market highlighted the need for diverse management skills. Here Chris describes how management training has been essential to the company’s development.

What I did

Research training options

“Eighteen months after setting up, I had to recognise that we were no longer a start-up. Strategies for growth needed to be put in place and, while I had plenty of ideas, I wasn’t sure I had the right skills.

“I enrolled in a series of professional development programmes, which I researched with help from Scottish Enterprise and through attending networking events. A network contact recommended the Business Investment for Growth programme.

“The programme teaches business owners about business planning at a strategic level. That got me focused on the bigger picture and I wanted to learn more.”

Address key issues

“The next programme I joined was Plato II, organised by Dundee University Business School. The course, which I’ve still to complete, involves monthly mentoring sessions with senior blue-chip managers to identify and tackle critical business issues. Specifically, it’s helped me with targeted marketing.

“I’ve also attended various seminars and workshops organised by the Business Gateway service, covering other key areas such as team building, financial planning and quality management systems.”

Capitalise on learning

“I was sceptical about business coaching, but following a recommendation via my local Chamber of Commerce I’ve been using a coach, Richard Norris of Action International, for about a year.

“His input has been instrumental in putting strategies and systems in place, particularly financial systems, to capitalise on what I’ve learnt. In the last year, we’ve tripled our turnover, increased conversion rates on sales leads, added 22 per cent to profit margins and achieved 100 per cent staff retention.

“Before coaching, I was the world’s worst delegator, but Richard’s training has helped me overcome that. Coaching has also improved my time management skills and helped me plan succession. Overall, coaching sessions keep me focused on business development.”

What I’d do differently

Get financial training sooner

“Putting financial systems in place is crucial in the early years. I wish I’d undertaken professional training in financial planning at an earlier stage.”

Read more

“The right training programmes can be hugely beneficial, but I’ve learnt that self-development is equally important. I didn’t realise at first the number of ideas you can get from management books. I now read at least one per quarter and make myself a list of ideas to follow up.”

Read more case studies that describe first hand how people tackle real-life challenges and opportunities.