Static ConsulT

22/05/2024

Business is slow. Slow creates smooth. Smooth goes faster

27/07/2022

REALIZING THE VISION

Hammer claimed that while the aspiration for business growth might come out of the boardroom it is a company's infrastructure designed and implemented by middle management - that makes growth possible. Vision without infrastructure is just a dream - it cannot become a reality. Leaders of growing companies know that, regardless of their own aspirations, the building blocks of growth are laid by middle management. At the Japanese brewer Asahi, for example, it was a team of middle managers who developed Super Dry Beer, starting a craze in Japan for dry beer and allowing the company to capture more market share. Similarly, a group of Motorola middle managers was lauded for successfully developing a new wireless digital system for a client in under one year (the process usually takes two or three years).

Sitting between senior leaders and operational staff, middle managers are the communications conduit through which executives remain attuned to day - to -day business and personnel issues. Middle managers, as the Asahi and Motorola examples show, are often at the heart of corporate inspiration and perspiration - they generate ideas and they work to realize ideas in practice. Middle management is also the driver of Functional efficiency: improvements in cost, quality, speed and reliability are delivered by middle management and the processes it introduces.

26/07/2022

ENABLERS AND ENTERPRISE

In a 2007 Harvard Business Review article "The Process Audit," US businessman Michael Hammer summarized the science of management (which is essentially the management of business process) into two factors: enablers and enterprise capabilities. Enterprise capabilities stem from senior management, and include culture, tight governance mechanisms, and strategic vision. Enablers, however, are the task of middle management. They include design, infrastructure, process, protocol, responsibilities, and performance management. The enablers turn vision into reality.

25/07/2022

MIDDLE MANAGEMENT

The importance of middle management was described by business historian Alfred Chandler in his 1977 text, The Visible Hand, a play on economist Adam Smith's "invisible hand" metaphor, which explains the self -regulating forces of the market. Chandler noted that before 1850, family firms dominated business in the USA. These firms had poor communication networks and limited access to educated staff, so rarely grew beyond groups of family and friends who could be educated, trained, and trusted to manage the business.

However, with the growth of national railroad networks in the 1850s, the management landscape began to change. Improvements in transportation and communication allowed firms to grow beyond the immediate gaze of friends or family., and beyond the immediate locale. But to prosper in this new environment, companies needed more rigorous processes and structures. The increasing geographic scope and size of businesses required new levels of coordination and communication. Businesses had grown too unwieldy for one person to manage; they required the oversight of a team of people. This marked the emergence and rise of the professional manager.

As standardized and mass production emerged in the early 20th century, the role of management grew. Business was taking place on an increasingly global scale. Even before mechanization, coordination from managers enabled mass production. Standardization turned management into a science, and managers in to a vital cog in the organization machine.

24/07/2022

CHAINS OF HABIT ARE TOO LIGHT TO BE FELT UNTIL THEY ARE TOO HEAVY TO BE BROKEN

(KEEP EVOLVING BUSINESS PRATICE)

People are important in organizational life. Whether it is the initiative of a single entrepreneur or the combined energy of thousands of employees, it is people who get things done. However, that energy and initiative would count for little without managers to foster it. The creation, implementation, and management of organizational processes is what molds individual energies into a coherent whole - and as a company evolves, it is the experience of management that is essential in redefining those processes.

While management experience can liberate a business, it can also enslave it. Experience quickly gives way to the comfort of habit, and in ever - dynamic markets habit can too easily led to stasis and stagnation. The danger for management is that, as US investor Warren Buffet warned, "Chains of habit are too light to be felt until they are too heavy to be broken."

23/07/2022

Zhang Yin

Chinese Entrepreneur and paper recycling tycoon Zhang Yin was born in Guangdong in 1957. Recognizing that the Chinese export sector faced a shortage of paper - packaging materials, Zhang (her Cantonese name is Cheung Yan) opened a paper - trading business in Hong-Kong in 1985.

Quickly moving from entrepreneur to established business leader, Zhang moved to Los Angeles, US, where she co - founded the paper - exporting company America Chung Nam in 1990. The business quickly became the leading paper exporter in the USA, and the largest overall exporter to China. In 1995, after returning to Hong Kong, Zhang cofounded Nine Dragons Paper with her husband and her brother. The company went on to become the world's largest maker of packaging paper.

In 2006,at the age of 49, Zhang became the first women to top the list of richest people in china, according to the magazine Hurun Report. The following year, Ernst & Young awarded her "Entrepreneur of the Year in China 2007."

16/07/2022

EDWARD HESS

A graduate of the universities of Florida, Virginia and New YORK, Edward Hess has been teaching and working in the world of business for more than 30 years. He began his career at the oil company, and later became a senior executive at several other leading US organizations, including Arthur Andersen.

Hess specializes in business growth, and especially in debunking the "Myths" that growth is always good and always linear. Contrary to the dictum that companies must "Grow or Die."

Hess is the author of ten books and more than 100 practitioner articles and case studies. He is currently professor of business administration at the University of Virginia, US.

15/07/2022

MAKING THE TRANSITION

Canadian business guru Professor Henry Mintzberg proposed that management can be broken down into three categories: managing by information, through people, and through action. Many entrepreneurs have difficulty managing through information - they often lack the skills to build the systems and communication networks on which large businesses are built. Cyprus - born Stelios Haji - Ioannou, entrepreneur and founder of easyGroup, is known for rarely staying still. His company launched in 1998 with a low - cost airline, easyJet. and now includes more than 20 "easy" businesses that operate on a similar low - cost model. Haji - Ioannou has shown an aptitude for strategy, and an eye for detail; but he has also been criticized for lacking leadership skills, for micromanaging, and , common to entrepreneurs, for an inability to delegate and let managers manage.

US professor Larry Greiner identified leadership - the ability of a start-up founder to transition from entrepreneur to leader - as one of the major crises that businesses face as they grow. Greiner suggests that successful growth often requires the employment of professional managers who bring to the business an understanding of the business an understanding of the requirements of financial markets, banks, and - most importantly - have the leadership skills needed to manage complex organizations. Entrepreneurs may posses bountiful ideas, but it takes management discipline to turn those ideas into successful ventures, and leadership skills to move the start-up beyond its entrepreneurial roots.

Start - ups require the spark of entrepreneurship; but growth requires a different set of skills: a founder must transition from being sole decision maker to being a disciplined manager and a successful leader. Those who are unable to make this transition often need to step aside and let the professionals take over. But this is often easier said than done.

14/07/2022

14/07/2022

THE ROLE OF THE CEO IS TO ENABLE PEOPLE TO EXCEL
(From Entrepreneur To Leader)

In the early days of a new business the most valuable skill a founder can have is entrepreneurship - the vision to identify opportunities, and the willingness to take risks. But as the business grows, demands change. Disciplined management skills and corporate expertise are required to co-ordinate a growing enterprise. Some entrepreneurs are able to make the transition to leadership successfully, while others struggle. An Ernst & Young report in 2011 identified entrepreneurs as people who are nonconformist, driven and tenacious, passionate and focused, with an opportunist mind-set.

Other studies report entrepreneurs as mavericks, unafraid of failure and driven by a passion for success. While there is some overlap, absent from these findings are the traits that define good leaders and managers: organization, an eye for detail, communication, emotional intelligence and the ability to delegate. And as Indian executive Vineet Nayar advised, effective leadership involves encouraging others within the company to realize their potential, and excel.

13/07/2022

SUSTAINABLE GROWTH

When accurately applied, the SFG formula determines the rate at which a company can sustain growth through only the revenues it generates - without needing to approach external funding agencies for more cash. Essentially, it predicts a sustainable growth rate and helps to avoid overtrading. When a market is growing faster than a company's SFG, Churchill and Mullins identified three ways for managers to exploit the growth opportunity: speed up cash flow; reduce costs; or raise prices.

Each of these "Levers" helps to generate the cash needed to fuel faster growth.

As a young start - up business, the fashion brand Superdry enjoyed phenomenal growth. from its inception in the UK in 2004, the company rapidly added new stores throughout the world. In 2012, however, after several profit warnings, it became a victim of its own success. Critics suggested that the brand was so focused on growth that it had forgotten its fashion roots, failing to update products on a seasonal basis. Other reasons for the decline included supply issues, accounting mistakes, and an inability to react quickly enough to fierce competition. In a tacit acknowledgement that excessive growth was to blame, the company announced plans to review its new store openings.

Business - growth expert Edward Hess suggests that growth can add value to a company, but if it is not properly managed, it can "stress a business's culture, controls, processes and people, eventually destroying its value and even leading the company to grow and die." Growth is not a strategy, he claims, but a complex change process, which requires the right mindset, the right procedures, experimentation, and an enabling environment.

12/07/2022

NOTHING GREAT IS CREATED SUDDENLY
(How Fast To Grow)

One reason many new businesses fail is, perhaps surprisingly, because they grow too fast. Excessively rapid growth cab cause companies to overreach their ability to fund growth: they simply run out of cash to pay for day to day operations. A major challenge for any manager is to balance income with expenditure, ensuring that there is sufficient cash to meet the rising costs of the business.

In 2001, business professors Neil Churchill and John Mullins created a formula for calculating the pace at which a company can expand from internal financing alone. Known as the self - financeable growth rate (SFG), it helps managers to strike the right balance between consuming and generating cash. It does this by measuring three things: the amount of time a company's money is tied up in inventory before the company has paid for its goods or services; the amount of money needed to finance each dollar of sales; and the amount of cash that is generated by each dollar of sales.