Concentric Diversification


Grand strategies involving diversification represent distinctive departures from a firm’s existing base of operations, typically the acquisition or internal generation (spin-off) of a separate business with synergistic possibilities counter-balancing the strengths and weaknesses of the two businesses. Diversifications occasionally are undertaken as unrelated investments, because of their high potential and their otherwise minimal resource demands.

Concentric diversification involves the acquisition of businesses that are related to the acquiring firm in terms of technology, markets, or products. With this grand strategy, the selected new businesses possess a high degree of compatibility with the firm’s current businesses. The ideal concentric diversification occurs when the combined company profits increase the strengths and opportunities and decrease the weaknesses and exposure to risk. Thus, the acquiring firm searches for new businesses whose products, markets, distribution channels, technologies, and resource requirements are similar to but not identical with its own, whose acquisition results in synergies but not complete interdependence.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Leveling the Playing Field


Creating new heroes, designing graded levels of achievement, and establishing broadbanded pay plans are all so important. These techniques provide an environment where money and prestige are spread throughout the organization. Since the employee now knows he can acquire them through a variety of different paths, money and prestige become less of a factor in his decision making. He is free to choose his path based upon his current understanding of his talents and non-talents. He may still make the occasional misstep, but he is much more likely to focus not only toward roles where he excels, but toward roles that bring him lasting satisfaction and roles he yearns to play for a very long time.

On the level playing field, you bear conversations that you never thought you would hear. Conversations like this: “I live my role. I am the best in the company at it. I am making a lot of money doing it. And I am having more of an impact than I ever thought was possible in my life. So I said to my boss, I said, “Your one objective with me is to see to it that I am never promoted again. If you can do that, you have me for your life.”

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The New Work of Leaders


Our traditional view of leaders—as special people who set the direction, make key decisions, and energize the troops—is deeply rooted in an individualistic and nonsystematic worldview. Especially in the West, leaders are heroes—great men (and occasionally women) who rise to the fore in times of crisis. So long as such myths prevail, they reinforce a focus on short-term events and charismatic heroes rather than on systematic forces and collective learning.

Leadership in learning organizations centers on subtler and ultimately more important work. In a learning organization, leaders’ roles differ dramatically from that of the charismatic decision-maker. Leaders are designers, teachers, and stewards. These roles require new skills: the ability to build shared vision, to bring to the surface and challenge prevailing mental models, and to foster more systematic patterns of thinking. Leaders are responsible for building organizations where people are continually expanding their capabilities to shape their future—that is, leaders are responsible for learning.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Not Right or Wrong, Cultures are Just Different


People around the world feel as strongly about their culture as we do about ours, even if they do occasionally feel ambivalence. It is pointless to argue whether a culture is “good” or “bad;” every nationality thinks its culture is the best. For every foreign peculiarity that assumes us, there is our national peculiarity that amuses others.

Cultures have their own logic. Anthropologists say cutures are different because various peoples had to deal with diverse circumstances to meet their common human needs: different climates, different climates, different resources, different terrain. Just as animal species evolved differently to adapt to different conditions, so mankind evolved diverse solutions to life’s problems. Over the years the complex array of solutions to problems (many of which disappeared long ago)  created a confusion of cultural behaviors. But there are patterns, and one can begin to understand them by considering the different past, present and future of the cultures of the world.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Hypergrowth in Companies


Hypergrowth is not just a feature of private companies with a profit motive. The public sector can also undergo hypergrowth, often providing growth opportunities for private companies. In the main, however, the days of big government appear to be over. Current trends for the state to be less of an actual provider of services and more a facilitator and purchaser of them from the private sector.

Companies and corporations welcome hypergrowth because of the perception that they will make more profit and thus be more attractive to investors. This is a reasonable perception provided that the hypergrowth is managed efficiently. If, however, it is poorly managed the company may well end up in trouble despite rapid growth.

It is also true that the larger an organization is the more power it can wield and the more it can dictate to its suppliers in order to obtain the discounts the economies of scale can offer. If a company buys 9 percent of one supplier’s product, the company is highly dependent on that supplier to deliver on time. If it buys 90 percent, it can dictate the terms because of it withdraws its business then the supplier will have a major problem. Many suppliers often express delight at gaining a huge contract with a large corporation only to be dismayed later on as that corporation begins to drive down the price. No organization should ever be completely dependent on another.

Just occasionally there are companies that do not want to grow – their owners are happy with them as they are. The danger is not growing, however, is being a target for acquisition by those who are. Hypergrowth is normally presented as a positive thing. For the individual who has not considered its implications it can be threatening. In a hypergrowth situation, change can occur rapidly and change is often uncomfortable. Senior managers should be aware that hypergrowth may produce fear in employees as well as pleasure and pride.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Change and Satisfaction


Organizational change can be protracted and costly. For example, termination payments to people and penalties relating to changed property arrangements can both be expensive. In some companies it would appear that decisions regarding who should be kept or made redundant are governed more by accumulated rights in the event of termination than managerial merit or quality. Some assets are also difficult to dispose of in a recession.

Occasionally, companies become carried away with concepts and push their application to the extreme. Judgment is needed to decide how far to go in relation to the current situation and context of a company.

For a period, and until the benefits appear to come through, corporate transformation may be accompanied by a slide in the employee satisfaction ratings. The trends need to be monitored, the causes identified and, where appropriate, remedial programs put in place. Opinion surveys can be used to track attitudes to change in various parts of the corporate organization.

Understanding the reasons for dissatisfaction could lead to a change in transformation priorities, if not in direction. Japanese companies, such as Honda encourage their staff to be dissatisfied with whatever has been achieved in order that they will aspire to do even better.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Use and Misuses of Authority


Most managers believe they must have authority to accomplish their jobs. They believe it is their superior’s responsibility to see that they have adequate authority in the areas for which they are held responsible and accountable. But a manager who either misuses or oversas his authority to get his subordinates to carry out their tasks may be inviting trouble. This is why it is important for the manager to understand the various sources of authority and power and the differences among them.

 Most people who have worked in the business world have seen a situation in which subordinates have “fired” their boss. By dragging their feet on assignments by cauing the organizations to do a relatively poor job, and by directing criticisms to appropriate ears, a unified group of subordinates can cause such trouble that their boss’s superiors may question his ability to handle his work group. Under these conditions the subordinates may sometimes be shown the door; but occasionally the boss is fired. That this can and does happen illustrates that managers are dependent, in part, on their work groups, just as their work groups are dependent, in part, on the managers. Although the manager has formal sanctions to back up his authority, the work group has informal sources of power it can utilize. The manager who relies only on his formal authority to direct the efforts of others may, therefore, not achieve the best results. It is desirable that he also be a leader; in short, he should be able to influence his subordinates as well as give them orders.

 Managers are often “caught in the middle”between the values, orders, and expectations of their superiors and the values, needs, and expectations of their subordinates. The manager usually needs to retain the support of both his superior and his subordinates, and the dilemma he feels when there is conflict between the two can create intensely uncomfortable feelings. The pressure is  compounded when the values and expectations of his peers are also involved, as they frequently are. Different managers resolve these internal dissonances in a variety of ways. Some ignore, or pay less attention to, either the subordinates or the superior, usually the former. Others try to find compromises that satisfy both, at least enough to avoid undue problems. But however thay handle them, most managers experience the discomfort of man-in-the-middle problems.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Communication, Business and You


Organizations bend over backward to see that communication both inside and outside the company are open, honest, and clear. Your ability to communicate increases productivity both yours and your organization’s. it shapes the impressions you make on your colleagues, employees, supervisors, investors, and customers. It allows you to perceive the needs of these stakeholders (the various groups you interact with), and it helps you respond to those needs. Whether you run your own business, work for an employer, invest in a company, buy or sell products, design computer chips, run for public office, or raise money for charities, your communication skills determine your success.

Good communication skills are vital because every member of an organization is a link in the information chain. The flow of information along that chain is a steady stream of messages, whether from inside the organization (staff meetings, progress reports, project proposals, research results, employee surveys, and persuasive interviews) or from outside the organization (loan applications, purchasing agreements, help-wanted ads, distribution contracts, product advertisements, and sales calls). Your ability to receive, evaluate, use, and pass on information affects your and your company’s effectiveness. 

Within the company, you and your co-workers use the information you obtain from one another and from outsiders to guide your activities. The work of the organization is divided into tasks and assigned to various organizational units, each reporting to a manager who directs and coordinates the effort. This division of labor and delegation of responsibility depends on the constant flow of information up, down, and across the organization. So by feeding information to your boss and peers, you help them do their jobs, and vice versa.

 If you are a manager, your day consists of a never-ending series of meetings, casual conversations, speaking engagements, and phone calls, interspersed with occasional periods set aside for reading or writing. From these sources, you cull important points and then pass them on to the right people. In turn, you rely on your employees to provide you with useful data and to interpret, transmit, and act on the messages you send them.

 If you are relatively a junior employee, you are likely to find yourself on the perimeter of the communication network. Oddly enough, this situation puts you in an important position in the information chain. Although span of influence may be limited, you are in a position to observe firsthand things that your supervisors and co-workers cannot see: a customer’s immediate reaction to a product display, a supplier’s momentary hesitation before agreeing to a delivery date, an odd whirring noise in a piece of equipment, or a slowdown in the flow of customers. These are the little gems of information that managers and co-workers need to do their jobs. If you don’t pass that information along, nobody will know about it—because nobody else knows. Such an exchange of information within an organization is called internal communication.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Closed-loop Teams


For years, banks have taken several days, and even weeks and sometimes months to get a decision to a personal loan applicant. The application would be passed around the various departments, traveling at its own pace. A series of supervisors, clerks, and internal mailpeople handled it. Today, aggressive banks take the application directly into a focused, coordinated group—a credit analyst, a collateral appraiser, and a senior personal banker—who decide and respond to the customer sometimes in thirty minutes and always inside a day. This is a small closed-loop team.

 

A closed-loop team includes everyone who is necessary to make the deliverable flow. The team includes all the needed functional people and decision-makers and is self-scheduling. Everyone the team is working for the same objective—to provide the deliverable on time. The team is empowered to make decisions and to act. It has all functions inside it with short lines of communication. Its leader is responsible for its overall performance and for seeing that it gets all the capability, both technicall and human, it needs. All of these are essential to flexibility.

 

The old bank loan approval process was open loop. There was no continuity in the process, no visible standard, little learning between the principles, only occasional feedback on the process, and no one responsible for making it better.

 

In order for the loop to close on a process it must be tightly organized around the deliverable; the same core group must be involved in the process every day; and there must be a working leader on the team.

 

Small teams work better than large ones because large groups create communication problems of their own. It’s best to include only essential functions and to exclude people whose job is peripheral to the deliverable. For example, the bank loan team excludes accounting and records people. Teams have to be self-managing and empowered to act because referring decisions back up the line wastes time and often leads to poor decisions. So the team ioncludes a bank officer because if the officer were not on the team, he or she would be prone to second-guess the group’s decisions. Its better if all the questions are asked and answers are exchanged just once.

 

Closd-loop teams handle variety better than open-loop teams because they can create new information and flexibility.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight