The spirit of achievement

By definition, a business venture is an undertaking that involves some risk in expectation of gain – a commercial under­taking characterised by risk of loss as well as opportunity for profit. It therefore follows that the task, indeed a formidable one, is to do what needs to be done to minimise the risk and maximise profit. This can be said to be the essence of management in all its forms and aspects.

A winning mentality and a spirit of achievement need to follow fundamental guidelines. Throughout my entire management career, I have consistently harped upon the fact that professionalism is not negotiable and that mediocrity is a recipe for failure. Aiming high is an extremely important ingredient.

In his “Sur Petition – Beyond competition”, Edward Debono differentiates between Western and Japanese culture and explains the Japanese aim at going beyond perfection – they say “This is perfect. Let us now try to make it better”. In his essay on Conviction Management, John Powls writes on the importance of learning all the time and improving performance, aptly adding that once we stop doing that we become a liability. Indeed, a winning strategy must accurately designate what the organisation will do better than anyone else.

In “Management tasks, responsibilities, practices”, Peter F.Drucker, the management guru, explains that performance with a winning mentality and a spirit of achievement does not guarantee success at all stages because there will certainly be some failures along the way. However, and this is of paramount importance, performance must leave no room for complacency and low standards.

On the importance of management, Drucker wrote almost 40 years ago that “rarely in human history has a new institution proven indispensable so quickly.”

Perhaps the importance of management is best gauged through events of three notable international enterprises which passed through deep trouble precisely because of non-management and which subsequently rose from failure to great success as soon as sound management structures were put in place.

Henry Ford, starting with nothing in 1905, had built 15 years later the world’s largest and most profitable manufacturing enterprise. Only a few years later, by 1927, this seemingly impregnable business was in shambles.

The first Ford failed because of his firm conviction that a business did not need managers and management. All it needed, he believed, was the owner-entrepreneur with his “helpers”. The only difference between Ford and most of his contemporaries in business, in the U.S as well as outside, was that, in everything he did, Henry Ford stuck uncompromisingly to his convictions.

Werner Von Siemens (1816-1892) also believed that managers are unnecessary. He did not employ managers. He had “helpers” and “assistants”. Growing spectacularly until the late 1870s, the company began to slow down, gradually slipped out of control and became “unmanageable” and practically unmanaged.

The English Siemens company, originally the most prosperous business of the Siemens group, was destroyed by mismanagement and had to be abandoned. When in 1897, five years after the founder’s death, the company had to take recourse to the capital market, a banker – Georg Siemens, a cousin of Werner and by that time the head of the Deutsch Bank – used the need for money to force the founder’s reluctant sons and heirs to accept a management structure and managers.

Yataro Iwasaki (1834-1885), the founder of Mitsubishi, also did not believe in managers. He insisted on the sole authority and responsibility of the owner-entrepreneur. He decreed that all ownership should forever be vested in one man: the head of the family.

This man, and this man alone, should make all the decisions; the others should be his “assistants” and carry out his orders. Iwasaki started in 1867.

Fifteen years later his concern was the leading industry in Japan. By that time Mitsubishi began to slow down, to drift and to show clear signs of incipient decay.

Fortunately for the company, Iwasaki died, barely 50 years old, in 1885. His trusted associates immediately restructured and built the strongest, most truly professional and most autonomous management group in Japan from which the family, while treated with the greatest deference, was completely excluded. And it was then that the rise and growth of Mitsubishi really began.

Strategic planning definitely constitutes one of the first formidable tasks to be taken earnestly in hand. Strategic planning is the continuous process of making present entrepreneurial (risk-taking) decisions systematically and with the greatest knowledge of their futurity; organising systematically the efforts needed to carry out these decisions; and measuring the results of these decisions against the expectations through organised, systematic feedback.

Strategy determines what the organisation’s key activities are. Strategy requires knowing what the business is and what it should be. The more important strategy ingredients can be grouped as follows; I will have the opportunity to expand on them in future contributions:

• A road map designing the process leading to the planned destination.

• A coordinated plan of action. Meticulous planning followed by crucial decisions is essential.

• The allocation and utilisation of the available resources aimed at the attainment of short to long term objectives.

• Commitment of key people to work on specific tasks.

• Space for contingencies to cater for unforeseen circumstances.

• Futurity of present decisions.

• The measurement of results against expectations followed by corrective/remedial action as and when necessary.

• Flexibility – adaptation to anticipated changes.

• Time dimensions – commencement and completion of tasks tied to time-frames.

Mr Xuereb is a former senior company executive who has lectured extensively on various management topics.