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General Theory
Potentials of Growth
and Development
(main)
You Become that Which You Believe You Can Become
An individual, a business, a government is limited only by its
beliefs. A fast growing, out-of control business can become a model of
organization and stability and still grow at an astounding rate. A giant
lumbering company can double its revenues in a few years or less.
We
assume that small fast growing companies cannot
easily gain control of its
self, or that large companies with a long track record
steady growth cannot all of a sudden be
energized for spectacular growth. Could it be that this is
only a mental belief? That if one were to change the belief, the reality could change?
Could it be that you are what you believe in, and you become what you believe you can
become? If this is true, and we think it is, any company can be energized to double its
profits and/or revenues in two years or less, or become anything it wishes in the
timeframe it wishes.
Cause of
Prosperity
Prosperity is the result of intelligent industry which comes
from education. (MSS)
Business Growth
vs.
Development
Business growth is an
extension at the same level -- e.g. another hotel is added to a hotel
chain. Business development is movement to a higher level -- e.g. a hotel
chain that decides to cater specifically to the Internet traveler, or one
that suddenly gives priority to the needs of its employees.
Business growth is
horizontal extension. Business development is vertical evolution.
A salesperson who visits
more of the same type of store is normally creating horizontal growth. If
the salesperson went to a new type of store or begins to control his
contacts with a computerized system, then that would be development.
Sometimes development can
seem like more of the same. E.g. if the motel chain was previously
reluctant to expand into new markets because of some bias, then the
overcoming of the bias and extending into these areas is vertical
development. The overcoming of the attitude is the source of the
development, not the added locations in itself.
Factors that Determine a Company's
Development
-
CONSCIOUS, SUBCONSCIOUS SELF-CONCEPTION -- Businesses
develop as a result of a self-conception that is sometimes
conscious, often subconscious. A noted instance of conscious
self-conception was Fred Smith's idea for establishing Federal
Express.
-
ASPIRATION -- The development of
a business is fueled by the aspiration of its people. The aspiration
of the owners and leaders is a critical determinant of how far and
how fast the business grows.
-
REQUISITE ENERGY SURPLUS --
Surplus energy is an essential condition for business growth. Only
in the presence of surplus capacity can new activities be supported.
The same is true in business. Companies struggling for survival or
to meet the minimum requirements of their customers lack the excess
capacity needed to plan and initiate new activities or elevate their
functioning to a higher level of organization.
-
PIONEER INDIVIDUAL -- New modes
of activity are introduced in a company by pioneering individual
initiatives that are imitated and disseminated by others, diffuse
through the company, and are eventually accepted and integrated with
the normal functioning of the company.
-
AUTHORITY -- Authority is a
fundamental principle of organization that is essential to the
survival and development of companies. Corporate authority is
expressed more and more through the discipline of impersonal rules,
systems, coordination of activities, policies, corporate culture and
values that determine the effectiveness with which surplus energy is
converted by a business into productive power, rather than by top
down personal exercise of authority by a management hierarchy.
-
TECHNOLOGY,
KNOWLEDGE, & SKILLS -- Social know-how
in the form of technology, practical knowledge and skills determines
the conversion of productive power into material results in
business.
-
PRODUCTIVITY
OF RESOURCES -- The productivity of a company's resources is not
subject to any inherent limits. It depends on the attitudes,
information, knowledge, organization and skills creatively applied
-- i.e. on powers of mind.
-
ATTUNING TO
SOCIETY'S NEEDS -- Companies develop by attuning themselves
to the direction, trends and changing needs of the wider society of
which they are a part in each of these five major areas. This
relationship is especially apparent in larger national and
multinational corporations whose development is often closely tied
to parallel developments in the societies in which they function.
-
ORGANIZATION
-- Companies depend for their development on three levels of
organized infrastructure -- a physical organization of production,
transportation, communication, etc.; a social organization of legal,
financial, commercial, and educational systems and institutions; and
a mental organization of information, technology and knowledge. All
three are needed for the achievement of progressively more complex
forms of BUSINESS activity.
-
VALUES -- Values represent that
highest form of organization for directing human energies in
constructive and productive activities. The quality and height of
the values set the limits on the magnitude of developmental
achievements. (MSS, somewhat modified)
-
FULFILLING POTENTIAL -- The
utilization of business development potential depends on the
company's level of awareness, aspiration, organization, values,
knowledge and skills.
Horizontal and
Vertical Makeup of Company
Horizontally a company is made up of its five components -- market, technology
(products and services), organization, people, and finance. These are the
engines
of growth. The fuel and energy for growth is its vertical aspect
which begins with top management's values, mission, values, and goals,
which are communicated and executed down throughout the organization by
knowledgeable and skilled people.
Untitled
Commerce has brought science to the masses through technology.
(MSS)
Factors of Potential
in Business
In the 60s, [the Indian concern]
Pondicherry Milk Society was losing money. The government was willing to
close shop. Someone suggested that the
Cooperative Bank Secretary was a dynamic man and he could turn it into a
profit-making concern. That officer rose to the expectation of his
admirer and made the Milk Society a great success. What was the secret?
Inside the various sections of the Milk Society there was plenty of
potential - money, human resources, opportunities, advantages of the
market, organisational strength, etc. - which when drawn upon, a
losing concern becomes a profitable one. (MSS)
Tending To All Areas
of a Company's Strength Simultaneously
In every company there are about a hundred areas of strength -
reputation, loyalty, credibility, thoughtfulness, resourcefulness,
dynamism, etc. - each of which was prominent at one time. At any given
time, any company focuses ONLY on one resource. In practice, it is one
project. All the others recede to the background and are gradually
forgotten.
It is true of any family or any individual. Anyone who realises such
potentials and exercises his mind to DRAW upon them will let his life or
his company's life grow exponentially. The strength is within.
(MSS)
Success is
for Those Who Dare and Act in An Aggressive (Seemingly
Oppressive) Market
Work goes to China from USA in pursuit of low cost. Jobs are
lost in the USA. The small US manufacturer goes out of business.
The nation faces this crisis. The national association of tool
manufacturers is called NTMA, National Tool Manufacturing
Association. They are of all sizes, from $2 million to $20
million. A few of the companies are worth between 70 and 100
million dollars.
In the view of the NTMA members, this crisis is a disaster and a
misfortune. We see it as the greatest opportunity for the
members. How can that be told to them?
Even if we manage to speak it out to them, of what use is this
sterile philosophy? Can we make them see that this is an
opportunity and inspire them to act on that basis? The facts are
on our side. We addressed their conference five years ago and
earlier seventeen years ago. Out of the 2000 members, we have
interviewed 40 or 50 of them. Several of them who were doing 2
or 3 million five years ago are now at 7 or 10 million dollars.
That is a fact. But there is another side to that fact.
Several others have closed shop. Many others are frightened of
the prospect of closing. The interviews clearly show that the
MARKET is aggressive, but expanding.
Those who rise to the
occasion of aggressiveness are caught by the wave of expansion
and move from two million to ten or twenty.
Those who are timid, and cling to their old ways are wiped out
by the aggressively changing market. Success is for those who
dare and act. (MSS, edited)
Five Growth Engines
(main)
Five Growth Engines of
Business
There are five components to
a business that are its engines of growth. They are market, technology
(products and services), organization, people, and finance. Most fast
growing companies are weakest in the organization component.
A company is only as strong
as its weakest component.
Horizontally a company is
made up of its five components -- market, technology (products and
services), organization, people, and finance. These are the engines of
growth. The fuel and energy for growth is its vertical aspect which begins
with top management's values, mission, values, and goals, which are
communicated and executed down throughout the organization by
knowledgeable and skilled people.
Five
Growth Engines
Every business consists of five components
essential for its existence, survival and growth -- market,
products and services (technology), organization,
people, and finance. Take away any one of these components and the company ceases to
function. Each of these five possesses unlimited potentials that can be tapped to
transform the component into an engine to drive the growth of the company. The maximum
achievement results when all five components are energized and developed in a balanced and
harmonious manner.
Where the accumulated energy of the company is the fuel
for growth, the five engines utilize the fuel and drive it to growth and
profitability. Just as more energy in the company provides more fuel for combustion,
so to the well-being of each of the engines determine the final outcome. Together the fuel
and the power of the five engines drive the company to growth and prosperity. The
stronger the combustion the more powerful the results.
Five
Growth Engines
Detailed
The five engines of growth for a company
are:
-
MARKET: This component
includes the company's relationship with existing and potential clients/customers, its
knowledge of changing needs and opportunities in the market, the way it identifies and
reaches its clients/customers, the quality and speed of service it provides, marketing,
advertising, and the selling and management skills its possesses.
-
PRODUCT AND
SERVICES (Technology): This
component refers to the capacity of the company to deliver products and services. It
includes the range and quality of products/services it markets, the technical knowledge
and skill of sales and service staff, and the level of technology incorporated in its
products/services and utilized to carry on business.
-
ORGANIZATION: This is the
component that holds everything together and forms it into a living whole. Organization
consists of the structures, systems, policies, procedures and activities of a business,
the manner in which it exercises authority, takes decisions, communicates, coordinates and
integrates its activities.
-
PEOPLE: This component
covers the energies, abilities, skills, and attitudes of employees that can be harnessed
for growth. People and companies grow together. Those companies that provide maximum
opportunities for their people to grow, find maximum opportunities for their own growth.
-
FINANCE: This component
defines the way in which the company manages, monitors and utilizes capital resources for
its growth. It includes the quality of systems and skills for accounting, budgeting and
financial management, cash and credit management, control over purchasing and inventory,
access to capital.
Balancing The Five Engines
The performance of a company is determined by the extent to which it utilizes its
potentials. A business achieves maximum performance when each of its five engines is
fully developed, and when all five are developed in a balanced and harmonious manner.
When the development of the components is uneven, the weaker components prevent
full utilization of the capacities of the stronger ones. For example, a company with a good
reputation in the market or excellent products will not be able to fully leverage these
strengths if its people lack critical skills or its organization cannot
respond quickly to growing market demand. The
company is as strong as its weakest engine.
ARTICLE on the Five Growth
Engines of Business Success
Leadership
(main)
Executives
Follow the Inner Requirements of the Employer
Executives in a private establishment do not go by the rules
laid down, the speeches given, by the tone of those speeches and
what the top actually desires.
Very readily they tune themselves to the real inner requirements
of the employer. When Khrushchev announced liberalisation in the
USSR, he still behaved like Stalin and the rank and file treated
him as Stalin. (MSS)
Managers vs. Leaders
-The distinction between
managers and leaders is of
paramount
importance in the
modern business environment.
Simply defined, managers direct,
leaders inspire. Managers demand
respect and
exercise authority.
Leaders respect others and
enhance
their freedom for individual
initiative. Managers promote
efficient
execution of routine
activities. Leaders
release and direct
the energy of the
organization to
propel it
into higher levels and
wider circles of
accomplishment.
Effective managers promote
horizontal expansion of the
activities
over which they exercise
control. Inspiring
leaders promote
vertical development and
creative
initiative,
even in areas over which
they have no
organizational power.
Efficient managers
insist on strict
adherence to policy
and procedure.
Dynamic leaders strive
to maximize
energy, commitment, effort and
resourcefulness.
Managers often mistake the submissive behavior of
subordinates as an accurate reflection of their own worth. Perceptive
leaders know their own weaknesses and know that others know them too.
Almost anyone can exercise authority when the power to
enforce obedience is placed in his hands by virtue of his position
within an organization. Great leaders are those who generate the power
for accomplishment by the strength of their own personalities in
circumstances where organizational authority does not exist and
obedience cannot be enforced. Strong managers enjoy the use of power and
feel energized by exercising their authority. Insightful leaders
understand that the only one who feels energized by the exercise of
authority is the one who exercises it.
-Can one man and a handful of followers make such a
difference to the life of an organization or a
nation? They can and they do. Every great accomplishment is the result
of one or a few people who rise above the ordinary to perform
extraordinary deeds. What makes them extraordinary? It is not their
talent or strength. It is their attitude and determination. What can
motivate men to such an attitude and determination? Neither the power of
authority, nor the force of
compulsion, nor the threat of punishment. It can only be accomplished by
acts that are self chosen in an atmosphere of freedom in pursuit of a
challenging and inspiring goal that unites and benefits all rather than
divides and deprives.
The true essence of leadership is to create that
atmosphere of freedom, project that inspiring goal and motivate people
by determination and example to the highest conceivable levels of
accomplishment. For such a leader and followers, anything is possible.
(MSS)
Great Leadership & Emotional
Intelligence
-What makes
a leader great? A commanding presence? Technical brilliance? The drive
to work 80 hours a week? Or spending thirty minutes each day in
self-reflection? The answer is self-reflection. Follow that up with
highly trained listening skills, persistent optimism and a bit of
empathy and you have a leader who's not only great, but superb.
-A steady stream of research
over the past decade has consistently identified emotional intelligence
as a much more powerful predictor of professional success than
intelligence or expertise. Highly emotionally intelligent managers
retain workers and encourage the productivity and innovation that make a
company shine. Instead of trying to micromanage, effective leaders bring
people together and inspire them.
-You must create an
environment where people feel valued to be creative.
-Individuals' self-interest
diminishes empathy and limits ability to see the big picture.
-The most capable leaders
demonstrate modesty and even shyness, giving credit to the organization
and their co-workers before themselves.
-The self-management aspect of
emotional intelligence includes acting with honesty and integrity,
especially in difficult situations. Executives must be flexible, and
know when to walk away.
-An executive who surrounds
himself with 'yes' men, creates a morally neutered environment. The
emotionally intelligent leader, in contrast, is aware of others'
feelings and is willing to admit mistakes.
-Emotionally intelligent
executives maintain accountability and are committed to ethical business
practices while they increase a company's profits. (East Bay Business
Times, extracted)
Also See
Thoughts on Leadership in General
Also See Thoughts
on Growth of Highest Management
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