Released by: The Edge
Date: 31 January 2008
Corporate stakeholders are acutely aware that businesses run on a track of business cycles. These cyclical fluctuations need to be factored into the growth pathway and trajectory of an organisation's business plan. Some businesses, such as the health and food industries, are not as susceptible to business cycles while others, like the construction business, are.
Nevertheless, when the economy is buoyant, most CEOs would find opportunities to ride on the wave and swift current to expand their businesses healthily. This growth should be pursued relentlessly as the next cycle may bring in a recession. That's why when companies are successful and growing, it is time to further reinforce their strengths and brace the company against future assaults.
Here are some management insights to be considered in building sustainable and successful organisations:
Management Insight #1: It is management leadership that drives a continuously successful and sustainable company.
It is important to have the right leader in place to lead the organisation. Successful companies such as General Electric and Wal-Mart have a continuous history of great and visionary management leaders. These leaders always look into the future to build on past legacy. They, however, do not lead the company by "driving into the future looking at the rear view mirror". They scan the current
reality and trends to prepare, seize or create the future before anyone else. Hence visionary leadership is key to organisational sustainability.
Management Insight #2: Great companies have great insights and strategies, not great industries.
As W. Chan Kim and Renée Mauborgne assert in Blue Ocean Strategy, successful companies have great and innovative value creation and strategies. It's the strategies and opportunistic insights that have allowed many great companies to continuously find market traction and loyalty. It is not the company or industry that is the key attribute for the organisation's success or growth, but rather
their innovative and dynamic strategy that makes the real difference, stress Kim and Mauborgne.
Management Insight #3: Have a worst or failure case scenario on "how to destroy your company business" and contingency plan.
Even though your company may be enjoying success in its business, it is always good not to be complacent but have a management team workout on what and how you would destroy the company and its business. This discovery will help you identify your vulnerabilities, exposures and blind spots. While it is good to think of all the success, it is also good sometimes to think of what is the worst that
can befall your organisation. There should be no superstition about this as the business world is now full of uncertainties, and good management leaders must be able to deal with these unforeseen events competently.
Management Insight #4: Make sure that your company runs like a highly tuned performance car in all quarters.
All areas must be strengthened and no slack allowed. Your organisation is as strong as the weakest link. Hence, whilst you may have a lot of champions who are highly talented, the high performance of your champions is often stymied by the lowest and poor performance of your weak staff. Therefore, it is important that the company trains, develops and strengthens these weak performers, and if they
are unable to meet the expected standards of performance, then the management leader needs to take the appropriate actions to de-select these people. Otherwise, talented employees will become frustrated and disillusioned with the lack of management leadership and leave the organisation.
Management Insight #5: Get the team fired up at all times; find and build great generals to work as partners and stakeholders.
Build a team of very committed people who run the business as if it was their own, and do make it their own if they are contributing to the growth of the business through equity partnership or profit sharing. The CEO management leader drives and epitomises the culture and dynamism of the company. He or she must exude the energy and enthusiasm, which must be maintained at all times. When they come
to work, even though they are down and moody, leaders must metaphorically turn on the light to shine the way, otherwise everyone is in the dark and the motivation and energy will be down.
Everyone in the company must play a part in managing the customers and stakeholders. All employees must therefore be trained to be business-minded and to behave like they own the company and must conserve the company assets and always protect the company's reputation and interests.
Management Insight #6: Never allow complacency to set in and the rot to start.
Always keep your people and business on their toes. Look at strategies for opportunities and profitable growth. Have a clear end in mind and a good strategic plan to guide your organisation's direction. There is a need to have a constancy of purpose and a sense of urgency, and the CEO must champion it as for he or she is the one who makes or breaks the culture of the organisation.
Management Insight # 7: Form strategic collaboration and alliances to build strength.
Today's business operating model is more of collaboration rather than a full-scale competitive model. Customers are becoming more discerning and demanding and most suppliers now have to combine forces in order to meet the customers' high expectations and demands. Hence, strategic collaboration and alliances would allow suppliers to combine their strengths and competencies to satisfy the customers
and win their business.
Management Insight #8: Review constantly as if the company is failing.
Take a different look at your company - during your strategy session, instead of looking at how you can build your company, go through an exercise of asking your key managers what are the quickest and best ways to kill your company. You will be surprised by how many weaknesses and strengths you can uncover from doing such a reverse exercise. Develop a scenario of how the team sees the company in
5, 10 and 20 years' time if you want to play in the long term.
Well-managed businesses will last longer than people. General Electric, Coca-Cola and IBM have survived and prospered for more than 100 years, where succeeding CEOs have to build the organisation during their term, then relinquish and pass the baton to their successor, the next runner, to run the next leg of the business race. When times are good, the swift current and tides provide the natural
flow and momentum for business success. However, it is during difficult times that the true brilliance of management leadership will shine through.
Dr Wilson Tay is CEO of the Malaysian Institute of Management, the national management organisation of Malaysia. MIM invites companies and professional managers to be members. Contact MIM Membership Support and Outreach at (603) 2164 5255; fax (603) 2165 4681; e-mail: enquiries@mim.org.my or visit www.mim.org.my.
