The Facts of Business Life by Bill McBean

to be done, designing processes to match that definition, and dictating how the processes will work, you will be exhibiting the kind of leadership that’s necessary at this level. It’s important to note, though, that determining what processes are needed can be a very complex task. If, for example, your company operates primarily on cash sales, everyone should understand how these sales are recorded and what happens from the time the customer hands the money to an employee to the time the money is deposited into the business’s bank account. One of the obvious benefits of establishing such a process is that it protects the business from theft and normal human absent-mindedness. What’s less obvious is that it’s also important to develop processes that determine how employees treat customers, when inventory should be replenished and when it shouldn’t, and when and how the customer should be contacted after the sale, as well as many other items.
Management at Level 2
    Once an owner has determined what tasks must be accomplished and which of these require processes to be established, creating the step-by-step procedures and determining how to measure the results of those procedures is essentially a management function. For instance, in the preceding example, if you want to develop a procedure to follow up with a customer, it could be something as simple as sending an e-mail to thank them for their business. You could also contact them after some particular number of days to make sure they are satisfied and give them a special discount on their next purchase. Similarly, you could set up a procedure in which you inform them of a product or products that complement what they bought, or tell them about what other customers who bought what they did also bought. The point is, regardless of what you choose to do, it is important to set up a process for doing it—or nothing will get done.
    But setting up processes also helps you develop the company’s DNA in another important way—by helping you develop a clear picture of the kind of talents employees will need to ensure competent operation of the processes. This will in turn better enable you to determine the number of employees needed, the training required, the discipline you must have to make the processes work, appropriate performance expectations, and the means by which employees will be held accountable for results. And all of these things become part of the company’s DNA.
Planning and People at Level 2
    As I mentioned earlier, in any successful business, it’s the processes that operate the business. But it’s the owner’s job to define these processes, and the employees’ job to operate them. At Level 2, DNA creation accordingly brings together leadership, management, and planning in that it connects the definition of success (leadership) and the step-by-step processes needed (management) to an organized format (planning) in order to make the success goal a reality.
    Planning for a business is actually similar in many ways to planning for a trip. When you’re planning a trip, you first decide where you want to go, then decide on the route, and then determine how long it should take to get there. Once you’ve accomplished this, you will know how many nights you will have to stay in a hotel, the number of meals you will have, and what your other expenses will be. When you’re planning a business, you also start with where you want to go—in this case, the success you are hoping to attain. Then you decide how you’re going to get there, how long it will take, and what you and your employees will have to do to accomplish the expected results, that is, how much sales revenue and gross profit you will need to meet your expenses and make a profit. And just as you need a map when you’re planning a trip, you need a plan when you’re starting a business so that you know which road to take, where to