Every effort, endeavour and enterprise begins with great enthusiasm.
Every effort, endeavour and enterprise begins with great enthusiasm. It is because behind any great effort, a lot of pre-planning and hard work is undertaken. The venture is assessed in terms of its viability in the short and long term. The competition is scanned. The market place is explored to measure demand and its continuity. Once the idea is crystallized then begins the act to build the blocks together into a cohesive whole, referred to as company or an organisation.
Having developed a proper business plan; the organisation has to be in place. The most critical aspect of an organisation besides its need for capital is human resources. From the likely competitors in the market place begins the act of poaching the best human resources. These come usually with the additional premium a company has to pay to ensure a good beginning.
With a business plan, a marketing strategy, the necessary capital, both financial and human, the organisation gets poised to take on the market. The impelling urge to excel and be successful pervades the organisation. This requires the organisation to be different to its competition. Hence innovation and creativity become the crucial differentiating factors. The management pays attention to the deployment of adequate financial and human resources, to make that differentiating aspect; that unique business proposition, to ensure recognition. The idea is to beat the market; conquer competition, resulting in enhanced sales and of course growing profitability.
This stage of an organisation usually lasts without much challenge from the market place for at least a decade or so, that is if all things, ie, management has been conscious to put in place the best products, services, human resources and a hands-on approach to respond to changing marketing dynamics.
Success has its roots in hard work. It is the outcome of focused attention to detail. Here, it is best to note that entrepreneurs are always very cost conscious. The subscription to the thought that every penny saved is a penny earned is held very close to everyday operations. A growing revenue stream and a controlled cost environment is the recipe for enhanced or efficient profitability.
Companies that achieve corporate success are representative of a unified board of directors, management and business direction. The challenge that emerges thereafter is the attitude to handle success. And trust me, the most difficult thing, in my assessment is the ability to handle recognition, growth and success. These are the milestones when either the organisation continues to be on a steady path or just starts to get mislaid from its high pedestal of achievement.
Today, the list of fortune 500 companies is not the same as it was say, two decades ago. Many have joined the prestigious recognition, while more than many have just slipped off the charts. Why? The reasons could be several and numerous, but at the crux of any finding, the conclusion would be ‘financial collapse’. The aspect to examine here is ‘financial collapse’ is more often than not, the consequence of ‘managerial collapse’.
Managerial collapse stems from plain corporate arrogance to bad financial management. If, when the going is good, profits of the company are not ploughed back into business but instead finds itself in the real estate market of Dubai and Ajman or even worse in Porsche’s and BMW’s for all senior board members and executives- the recipe for impending disaster signs have begun to loom.
If the organisation is not forward looking, stagnancy is its future. Stagnant organisations decay much faster, than those die away fighting better products and services being generated by competition. This is usually due to fading, absence or lack of enthusiasm. A generally laid back attitude of all staff is a major indicator.
The tell-tale signs of inertia and management lethargy are gossip, less work, more time availability, falling sales, decreased profitability, changing life-styles, no retirements, no succession planning and above all lack of clear direction, starting from the board of directors to the manager on the shop floors.
The management fails or starts to fail, when it can’t, set identifiable, achievable goals; does not specify the pathway to achieve; does not put time-lines to tasks and above all keeps totally smudged the distinction between success and failure. When some mediocre is treated equally with high performers, the organisation has begun its inevitable decline. Lack of clarity in communication within rank and profile emerges as ‘a single most de-motivator’. Nobody knows what is to be done, how it is to be done and when it is to be done. Inertia prevails; a body at rest, will remain at rest!
The emperor of Austria congratulates Mozart after the performance of his new Opera, in the movie, ‘Amadeus’. However, the Emperor goes beyond and remarks to the composer, the movie had ‘too many notes’. Mozart demurely realises that he has not used a single extra note than the piece required. But Emperor that he is, insists to Mozart that he expunge some notes. Mozart, without making internal irksomeness visible, asks, ‘which notes should I remove, your Majesty?’ Communication from the supervisor or manager that either infuriates, confuses or otherwise fails to be a source of motivation is of no worth, at all. Most managers are guilty of miscommunication when it comes to their intentions and inclinations, about the organisation.
In an institution, falling apart, intense rivalries are a fact of life. It is the degree of intensity that usually denies the organisation the aggressive energy it needs to fight and face its real competitors, ie, ‘external competitor.’ The real enemy of a lethargic management setup is its inability to check internal dissension. History teaches us that all major empires crumbled not due to entirely external invasions but internal instability that provides the bedrock for machinations to implode, from the treachery of a highly divided workforce.
Fire is the test of gold, adversity of strong men. The quality of human resources collected over the life of the institution, can also lead to better results or alternatively to the path of doom. The failure of management to recognise job satisfaction is directly affected by the correlation between employee’s personal value system and that of senior management. A disparity leads to inertia and laid back reaction to changing market realities.
When in the corporate corridors you hear whispers about how good golden handshake is to protect the institution; or there is need to do some right-sizing and let’s do some restructuring, then know that the decline has set in. A lethargic management is recognised by its stance of sitting in gorgeous offices and just looking down on everything.
In a declining institution the senior management attitude is bogged down with thoughts of ‘have done it before’, ‘know it already’, ‘been there before’, ‘know it all’- leading to a general unwillingness to change or even innovate. If success, breeds success, then we should as managers never forget that emotional states are as infectious and endemic as diseases are. A depressed colleague can produce in a very quick time, the largest army of despondent.
When the workforce fails to respond to the promise of heaven (carrot) or the threat of hell (stick), it is a clear sign that the organisation is dying a slow death. Like the dreaded diseases, that medical science discovers only in its last stage, when it is most certainly fatal, so is the case with ‘management lethargy’, it takes time to emerge with full fury.
Intelligent, smart and ever observant managers will recognise these signs and take corrective actions. Failure to do so is to write the tomb stone.
The writer is a senior banker and freelancer columnist
