Enlightened Management
It is not easy for a company to succeed in a competitive marketplace. It is especially tough for start ups and early stage/emerging companies.
According to an article in the MIT Sloan Management Review, half of all start ups fail by their fourth year and 70% by the tenth. Ouch!
Our experience with clients and prospective clients supports this analysis. We once maintained a list that we called “tombstones.” This list was comprised of companies led by entrepreneurs with whom we discussed how we could be an independent, knowledgeable, third party, and provide guidance on business matters.
A typical response was “we’re fine, thank you, but no thank you.” Following those meetings/phone calls we would often predict the likeliness of their being in business in a year or 2 or 5. More often than not, sadly, we were correct. It is at this time that we would add the company to our tombstone list.
The reasons for their demise followed a similar pattern. Lack of capital, overspending, minimal management experience, failure to track their numbers and the macro economy in which they operate, failure to adequately build out an infrastructure to support growth and not hiring a management team that had experience in the many business functions (especially finance and marketing) that are important for successful execution of their business plan.
Many think concentrating on the product or service they provide would be sufficient and that “if you build it, they will come.” Not.
This mind set often includes lack of a solid plan for the business that encompasses growth strategies across all of the organization’s functions. A business plan without well thought out strategies and tactics to grow the business is just a lot of paper.
Paying attention to and implementing the plan for the business can help minimize the fall out in the first four years of operation.
Those that make it to the 5 year mark should be congratulated, but they should also know that the next five years are likely to be just as hard and fraught with risks, albeit different risks, than experienced in the start up cycle.
For an emerging business in years 5 – 10, a build out of the infrastructure with significant additions to staff is vital. It costs a lot to hire people, train them and have them be effective and productive. This includes both rank and file employees and management if companies can even find the “right” personnel.
In our current strong economy with low unemployment and a generally tight labor market it is even more difficult. As a result, many companies have turned to enhanced perks and other innovative ideas to attract and retain employees.
As companies grow, the number and types of products/services expands as well. It is in this phase that companies with new people often lose sight of what made the company a success in those early years. Communications with staff at all levels is key.
Too often, as companies grow, management becomes increasingly removed from what occurs on the proverbial factory floor.
The key to success can be best described as enlightened management. So, what is enlightened management?
This management philosophy is based on walking the factory floor, which management at all levels should do on a regular basis. The benefits are:
- Observing what is going on can pay dividends by fully understanding the processes the product/service go through from inception to delivery to the customer.
- Providing an opportunity for workers to see firsthand that management is involved and cares about what they do.
- Regarding management as approachable enhances how employees perceive them. Employees generally rank senior leaders higher when they feel they are being listened to. At times this can result in coaching the staff and contributes to developing their operating skills.
- Listening to employees who are “in the know” can mitigate issues brewing in the work force that can be toxic and lead to problems.
- Encouraging workers to suggest improvements that improve the manufacturing process makes sense, as frequently, those that perform the tasks have the best insight into what works and what does not.
- Ongoing bidirectional communication opens the door for recommendations from both management and workers. Manufacturing/production mistakes can be costly, so improving operating efficiency especially in the early years can make a big difference and should continue throughout the company’s life cycle.
- Achieving higher job satisfaction results when management and employees work together to improve operations. This can lead to lower turnover as employees like to think they have an opportunity to influence decisions.
This concept of enlightened management applies to management of each of the primary business functions, including the production/manufacturing function, marketing, HR/personnel, legal and finance.
For the latter group, of which I have been a part, understanding “how it all works” can make the difference between knowing what is behind the numbers as opposed to the numbers being just meaningless figures on a spreadsheet.
While nothing guarantees success, enlightened management and their ongoing involvement at all points in the organization can make a difference.
Furthermore, management, especially entrepreneurial founders, must understand in when to step aside and defer to professional management.
That is a topic that we will enlighten our followers on the coming weeks.
As for The Shindler Perspective
We have had a busy first half of the year attending CES, NAB, Digital Hollywood and with our regular client activities.
In the coming week, we’ll be at Siggraph 2019 in Los Angeles. When it is in So Cal, it seems there is better attendance, more exhibitors and it is generally a better conference. It will be good to see our friends, clients and others who will be attending. We’ll be posting comments as we tour the exhibit hall. Stay tuned.
This past week was the 50th anniversary of the Apollo 11 moon landing. We published a blog on the topic entitled Moon Landing – Stories Awaken. Check it out.
Comics reflect reality
Comics reflect reality – Enlightened management always wants to have a discussion with employees, but sometimes one side is talking and the other is not quite comprehending what is occurring as in this recent comic.
Dilbert has it right in presenting an alternate view of walking the factory floor with the company working smoothly since so many employees work at home.
It’s reality – Just like Dagwood, we have all been there, done that, had an epiphany during the middle of the night, made notes to be read in the morning.
Everybody at all ages love comics. See this Family Circus.
Never looking back
Since so many of us, especially Gen X and younger, read on digital devices, Pearson announced recently that they are now selling digital versions only of their college text books.
Follow us on Twitter, Facebook and LinkedIN for our take of the news, comics reflect reality and other trends in the marketplace.
Roberta and I wish you well.
Sincerely,
Marty Shindler
Chief Executive Officer
© 2019 The Shindler Perspective, Inc.