Unnecessary Formal Management Processes May Lead to Unexpected Results
Overview
Today, many buzzing words in managements are dancing in corporate world. Today's communication is full of new terminologies such as WhatsApp, Android, Smart phones, iPad, memory cards etc. Many Engineers are showing interest to become managers. Especially in India, having the title as Manager is a fancy or crazy for some people. Many people go for certifications and degrees in management such as PGDBA, MBA, without knowing these could be of some real help in their business. But one has to identify what suits him the best. One has to understand which are the most critical factors needed to run the show and improve his business. But in reality business management, is not so easy subject to learn by just reading books. It is a scientific set of skilled arts with real experience of long time observations and practical learning processes from several years. Just getting a masters degree may not make one as effective manager.Academic degrees will not suffice industrial needs.
The Story of a Talented Entrepreneur Ended Up In Debts
I remember a story of a Proprietor of Uninterrupted Power Supplies (UPS) manufacturing company, who was basically an excellent Engineer with hard core technical capabilities.He has got a Bachelor of Engineering Degree from a reputed University in India. Initially he started a small unit with 4-5 people to manufacture small battery chargers and inverters. At this starting stage, all worked together to manufacture Uninterrupted Power supplies. He was a very good human being except that he has crazy about false prestige. In those days, there was not such trend of writing as Proprietor on the business cards. Still this person written Proprietor on his visiting cards. He was very proud that he own entire firm as a whole, and he is the Proprietor. After a year he started to manufacture off-line UPS. He had good number of orders for his UPSs in local market. He hired some more employees including diploma holders and engineers. The employees never cared about their designation and titles, All worked like a single family and the entrepreneur became a leading manufacturer of UPS and inverters in that area. Their only aim was to deliver good UPS. Then he was doing MBA, same time through correspondence He appointed a cute MBA lady to supervise the administration section. People were happy. She coordinated very nicely with people Further he appointed HR Manager, and Executives, a Finance Manager, Quality Process managers. So he categorized employees in many divisions such as Finance, Administration, Production, Marketing, Servicing etc. Now number of employees in management and administration is more than that of technical division. Within 4-5 years, he increased his total staff strength to 100. Employees asked for started weekly meeting on Friday evening as after having team lunch afternoon. The entire company premises were glowing with festival atmosphere in Friday. In the Earlier 4-5 years ago, he, his technicians and labors were working as a family in weekends also, if there is demand in work. But there was family atmosphere with harmony. His relative profit margin was good.
Day by day he lost the control over technical things. He was getting orders, but his loan amount also growing. In the starting, in first couple of years, his firm was looking like a workshop shed, but his customers least bothered about it. Still he was very much process oriented and wants to incorporate many more management process. Instead of purchasing high quality MOSFETS Power Transistors, and Transformers, which are core parts of products, he focused to buy excellent CC cameras. The number of Employees was increasing, HR want to recruit two more office boys. But his old good technicians and uneducated but efficient helpers had left the company. In front of the newly qualified, highly educated people they felt themselves inferiors. Meanwhile his local competitor company hired them for better salary. By this time his employee strength has been increased, but he has become a great debtor. He has never focused on ROI. The major factor is the return on investment was neglected by the Proprietor. Finally he became debtor with many money lenders and banks.
Extract of the Story
This story tells few simple things. When he was an Engineer with few guys, he was focused, and just given attention to the timely delivery of stable products. As he became more the more Manager than an Engineer, he cultivated the habit of managing the people than working hands on himself. Without estimating his business scope and the market analysis, he was focusing just to hire many more. But now the outer look was glassy and surrounded by flower gardens. So finally he ended up with a great debt. If he had appointed a simple accountant and keep full control over the accounts and expenses, today he does not have to close the firm.,
Many reasons may be listed for his failure. His lack of tracking account and controlling expenses, his craze of management processes, his overlooking of the core competence of technical skills, too much unnecessary delegations. So obesity is enemy where. Highly obsessed with any single factor will results in imbalance. Instead of recruiting highly qualified MBA candidates, he could have appointed with B.Com, a commerce graduate to manage his accounts. Instead of dreaming to become world class entrepreneur, he could be thought of becoming a business owner. Balance saves the business. In India the symbol of balance is also an indicator of trade. A businessman, having dependents cannot always experiment on trial and errors. Many times we cannot go through all formalities and formal methods. We cannot be rest assured of the sustenance in the market.
Suggestions for Budding Entrepreneurs
- If you want to start your own business, it does not mean that always go for entrepreneur ship. Understand the difference between owning a small business and starting entrepreneurship.
- If you are a family holders and many people depends on you for the livelihood, do not experiment beyond certain limitations.
- Control the Accounts- Especially the Loan, is good and also equally bad if unpaid in time.
- Respect the old employees who supported you in starting days, in spite of any efficient and effective highly qualified new employees.
- If you want the gold crown of high recognition in the society and the reputed name in industry, without actual financial profit, then you have to think and may have to change the approach.
- If immediate livelihood is your aim, then search for job, get better experience, high exposure to the domain knowledge.
- Take calculated risks, and avoid false prestige showoffs in business.
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