The TENTH Commandment

Seeing Around Corners

Anticipate incessant change by periodically testing adopted business plans for their consistency with the realities of the world marketplace.

The past will not come again. Neither isolation nor insulation from tomorrow is possible. The problems of the times are the opportunities of the times, as always, but the strings attached are multiplying. Governments and new competitors, domestic and foreign, will increasingly affect the conduct of a business. So will social evolution. Despair has little value. Vigilance is required.

There’s no room for entrepreneuring in a static society. So Commandment Ten carries good news. We are in the midst of a lot of change; the year 2020 is almost closer to us than 1990; the world has shrunk and is increasingly wired together; and today is the first day of the rest of your life. The cliches abound. But the average person is swept along by events, turning his or her head from side to side occasionally as birthdays flash by. Then the day arrives when the energy required to deviate from the worn path exceeds the energy remaining in the reservoir, and what might have been will never be. Commandment Ten is an admonishment: Take advantage of the turbulence to build something new. Commandment Ten is a warning: Systematically tune what you are building to the times. Graphically, the challenges of the times can be depicted this way using the same Stages of Growth model used in Commandment Nine.

Entrepreneur/managers of growth companies must contend with two kinds of pressures, those from within and those from without. From within, both increasing size and complexity generate various problems and crises. They were outlined in Commandment Nine. From without, as depicted by the fat arrows, an increasing number of pressures affect a growing company as it becomes more and more viable and visible. The overriding question for the leaders of a dynamic enterprise is quite simple: What do we do to keep on succeeding? The name of the game keeps changing! There are six specific actions implicit in the dictates of the Tenth Commandment:

Ø  Recognize and deal with reality.

Ø  Adjust your managing style to fit the changing needs of the enterprise.

Ø  Treat organizational structure as a variable.

Ø  Nurture a process of managing within the company.

Ø  Verbalize information and expectations.

Ø  Remain doggedly customer centered.

These are the actions required to anticipate incessant change in order to amend your plans for the business accordingly.

Recognize and deal with reality. Floating interest and exchange rates are a reality. Diversity in the work force at all levels of responsibility is a reality. The merging of the Internet and computing and is a reality. Fresh competition (new entrants) in every kind of growth industry is a reality. Privatization in many countries around the world is a reality. Regional conflicts are a reality. The list goes on. Some of these factors may be pivotal to your company. You must determine which ones they are and weave them into your thinking.

Adjust your managing style to fit the changing needs of the enterprise. Any entrepreneur with industrial experience is familiar with the pluses of the “-tions” in a business: communication, instruction, delegation, motivation, and recognition. These -tions don’t just happen. A senior person causes them to happen, usually both by example and by direction. The ideal case is when these -tion elements of achieving results through others are an acquired taste bred into the fabric of the enterprise from the start. Then there is an ever-growing core of talent available to respond to the times. The alternative to breeding is on-the-job training or, sometimes, a crash program of management development, often triggered by some emergency.

Treat organization structure as a variable. The typical progression in most companies is to move, over time, from a functional organization structure to a profit center structure, as outlined in Commandment Nine. This general progression tends to make sense as the use of profit centers breaks the enterprise up into smaller pieces, develops more general managers, etc. It is important to recognize that there are countless variations and permutations along the way having to do with position titles, reporting relationships, salary brackets, and all the administrative paraphernalia that goes with facilitating a group of humans working together. Ideally, the culture of the company will highly value flexibility, cooperation, and appropriate competitiveness. At a minimum, entrepreneurs will do well to downplay from the start, the significance of the classic status symbols of corporate life. They can make for premature hardening of the business arteries, i.e. structural rigidity in the face of internal and external change.

Nurture a process of managing within the company. The key word is process. It implies a continuing, consistent, if not repetitive, sequence of events over time during which the participants can get to know one another, come to share a common vision and vocabulary, and establish a sense of order in the life of the enterprise. There are enough surprises in the day to day existence of a young company. Irregularities and spontaneity in the way managers conduct themselves are superfluous, if not downright destructive.

Verbalize information and expectations. Everybody is in favor of better communication, but what does it mean? Open offices or an open-door policy? Company newsletters? Friday night beer parties for the staff? Casual, mixed-level lunches? A formal mentor system? These are all candidates for inclusion, but the heart of communicating has to do with transmitting and sharing

ideas, opinions, and critiques on the work being done—the heartbeat of the company. The rest, from newsletters to parties, is just icing on the cake for a company on the move. In the final analysis, productive communicating boils down to regular boss-subordinate interchanges about the tasks at hand and those upcoming. And the value of the interchange is amplified if both parties have at least a rough understanding of what the company is all about—the vision, mission, and objectives.

Remain doggedly customer-centered. Amid all the external pressures, the ones most important to respond to are those that have an impact on your customers. More than one group of entrepreneurs have been surprised to find that interest rates or foreign competition or a new technological development has suddenly put a big dent in their growth plans. Often the surprise

would have been avoided if one or more of the top people had not pushed eyeball-to-eyeball customer contact down low on his or her list of things to do. For example, a year after the Saudi Arabia debacle in Case Z above, AH&B management received another blow. High interest rates

drove AH&B’s remaining largest client, a highly leveraged, second-home developer, into bankruptcy. This demise could have been foreseen by an alert observer of the client and the times, and someone at AH&B should have been that alert observer. How does a new venture get and stay customer oriented? The signals have to come firmly and regularly from the top. The burden is on the entrepreneur.

Commandment Ten calls on the entrepreneur to keep on entrepreneuring in the sense of monitoring and responding accurately to ever-changing reality. Doing this is central to serving society in some useful way on a continuing basis...central to keeping on succeeding. In recent years, a good number of famous companies, business icons, have fallen from grace. Some years ago Business Week published a study by writer/consultant, Tom Peters, of thirty-seven Fortune 500 companies whose managements were generally considered to have been effective in extending the youthful spirit of their enterprises over many, many years, through good times and bad. The study indicated that the managements of these companies shared eight attributes:

Ø  A bias toward action

Ø  Simple form and lean staff

Ø  Continued contact with customers

Ø  Productivity improvement via people

Ø  Operational autonomy

Ø  Stress on one key business value

Ø  Emphasis on doing what they know best

Ø  Simultaneous loose/tight controls