Every business has a way of operating that makes it completely different from any other business in the world. Ever wondered how some companies keep attracting and retaining high performing workers while others struggle to keep just a handful?
Have you ever walked into some business premises and without being told, you could feel a sense of intense energy in the air? How come some workers find fulfillment at their place of work and others don’t? How is it that some businesses in the same industries do better than others?
The answer to all these and so many more is management. As individuals are unique such that there are never any two people one hundred percent alike, the same is true of businesses regardless of whether they produce similar products or serve the same market. What makes the difference? Management.
Management: putting the pieces together
After all is said and done, the day-to-day activities of a business purely rest on the competence of management. It’s possible for a business to have a great leader and a great product, but without great management practices in place, the business cannot exist for long. It’s possible for a business to be started by an unusual entrepreneur, but without great management in place, the whole business can easily fall apart!
Business is like a puzzle, the entrepreneur paints the whole picture but management is how you arrange the puzzle one after the other, putting each piece in its rightful place. Entrepreneurship focuses on creating a business that matters (purpose-driven); the focus of management is the creation of a high performance environment (systems-driven). An environment where people are effective and work is productive.
The responsibility of the CEO as a manager is centered on preserving the core; that is helping everyone know what to focus on and how to focus. Management puts the whole pieces together and brings everything into proper perspective by creating an organization. Management takes everything the business is about and weaves it into one big and integrated whole known as organization. The creation of an organization is management’s core task.
The fact that people congregate everyday to work in a particular business doesn’t necessarily make it an organization. To make a business into an organization is what management stands for. This is the essence of the CEO’s role as a manager.
The organization of a business
Managing a business begins with the creation of an organization. The organization of a business is the essence of management. Without organization through management, a business is only a mob; a group of people coming together for their individual interests.
The business becomes defined by the expectations of the people who work in it rather than the other way around. If left unmanaged, the consciousness of a business will be no different than the consciousness of the people who comprise it. If people in a company are living with, for example, unrealized expectations in their personal lives and a history of disappointing relationships with people who let them down, the company will never transcend that consciousness without another force.
This powerful force must challenge them to rise beyond their disappointing past by creating a compelling and extraordinary picture of what they can become. Management through the creation of an organization is the binding force that unites all the resources of a business – human, financial, material, etc. – together towards the achievement of a corporate end. A business is most effective and efficient when it operates as an organization.
What is an organization?
An organization in a broad sense is a social arrangement which pursues collective goals, which controls its own performance, and which has a boundary separating it from its environment, including other organizations. The word organization itself is derived from the Greek word meaning "tool".
As Peter Drucker rightly stated in Harvard Business Review (February 2006):
"An organization is a tool. And as with any other tool, the more specialized it is, the greater its capacity to perform its given task."
To put it more succinctly, here’s another definition by Dr. Phil Walker:
"An organization is a tool designed and put into motion by its leaders to accomplish a particular end."
The key word in all of these definitions is the word tool. Which means the unusual entrepreneur as a manager is responsible for turning the business into a tool (organization). How does he/she achieve this? What is this tool made up of? How is this tool created? How does one apply it? These and many more is what management as an essential business skill for entrepreneurs focuses on.
To do this an entrepreneur requires three key managerial principles for sustainable business growth:
- Culture: the programming of an organization as a tool.
- Structure: the configuration of an organization as a tool.
- Execution: the application of an organization as a tool.
Culture: programming your business for sustainable growth
There can be no organization without a culture. Whether explicit or implicit, the existence of a culture is at the core of every organization. The creation of an organization begins with the establishment of an explicit culture.
Culture refers to the shared beliefs, values, principles and practices of a particular group of people. Culture is the personality of the organization. It is the software that enables your organization to behave in a specific manner. It is the program that determines how your company as an organization will function.
In the world of business, this is what is known as core ideology or corporate, business or organizational philosophy. It constitutes the fundamental principles, standards, rules and accepted practices that guides and inspires every action, decision and intention of an organization. It governs much of how people think, act, interact with others and do their work.
Culture is what defines the popular business phrase: "this-is-how-we-do-it-here." Most successful companies go a step further to institutionalize it such as: "the HP–way", "the Wal-Mart way", "the Virgin-way", "the Google-way", "the Nordstrom-way", "the Disney-way", and so on. This helps to instill a corporate sense of how things are done around here into everyone associated with the business.
Culture is what shapes the function of the organization as a tool. The specific purpose, the end for which the tool [organization] was created, is defined by the culture at its core. Most businesses fail as an organization because they lack an explicit culture which gives the entire company the much-needed clarity and direction for sustainable business growth.
How do I mean? If an organization is a tool as was explained above, what is the purpose of a tool? Why are tools created? What do we use tools for? Tools don’t exist for nothing; they exist to facilitate the accomplishment of a specific task.
Tools are instruments for getting things done. Hammers are used to drive in nails into any kind of surface; cars are used to convey people and things from one location to another; computers are used to store, process and retrieve information and so on. We all know the essence of tools and our expectations are formed on the basis of how well they function.
In essence, you don’t simply acquire tools for the fun of it; you acquire tools for specific reasons based on your needs. If you didn’t have needs, you wouldn’t be needing tools. Tools exist for specific reasons. What are some of these reasons?
Tools exist for two broad reasons:
- The satisfaction of a need or needs.
- The performance of a particular task or tasks.
So, an organization is a tool whose function is the satisfaction of customers’ needs through the performance of a specific task or tasks. Meeting the needs of customers is the purpose of an organization. An organization exists solely to satisfy the needs of the customer. An organization in other words exists as a problem solver (solution) to the target customer it serves.
Performing a set of particular tasks is the mission of an organization. That is, the primary assignment and objective of an organization is the performance of a set of specific tasks that enable it satisfy the customers’ needs. Without the performance of these tasks (mission), the customers’ needs will be unmet (purpose).
The extent to which the organization aims to meet the needs of the customer is its vision. That is, how well the organization strives to satisfy the customers’ needs (purpose) through the performance of certain specific tasks (mission) is its vision.
The combination of these three components; purpose, mission and vision in addition with two others; values and brand, form the basis of an organization’s culture. Together, I refer to them as Business/Organizational DNA.
