Our next session felt again better than the previous one. We are starting to understand the process and to each other. We also try to think ahead and set ourselves realistic question for our research.
We read a case study about a start-up that reached the point, when a structure is needed. The main topic of this week is how to effectively evolve a start-up into a working company, which would be ready to hire new people and make them valuable part of the process.
The questions that came up from our discussion:
- What attributes define a successful manager?
- What are different company structures?
- How do companies motivate their employees?
These questions should cover the main problem and help us understand better the way companies are established.
a) Attributes that define a successful manager.
There are countless articles about how to be a good and respected manager. It is hard to define some set of rules that would ensure anybody to be a good manager. People (meaning employees) are different and everybody prefers to be handled slightly differently- what one considers as rude might be taken as fair treatment by the other.
I found an interesting idea in a video created by Workforce Singapore, which I hadn't thought about before. A good manager isn't only defined by his behavior towards his sub-ordinates, but he also has to handle well his supervisors, colleagues and even customers, while maintaining his own development. These are the ideas suggested to manage the different groups:
Customers: satisfying customer's needs comes first, for that effective communication is necessary. Whenever there is a problem, it should be discussed the customer and another solution should be offered as well as explaining the pros and cons.
Subordinates: being assertive is necessary to keep an authority. Every task should be clearly explained, not only how something should be done, but why is it important and how does it fit into bigger picture. Additionally, the manager should highlight possible reward as well as 'punishment'. It is not only up to the manager to bring up new ideas, therefore he should listen to his subordinates and give them opportunity to speak.
Supervisors: The biggest advantage is to know one's supervisor well and act according to that. In the video, there is an example that when a boss likes for example visuals, a presentation for him should include a lot of graphs and pictures, so he can imagine everything well.
Colleagues: people on the same level as a manager should be handled with great respect, since one can never know, when one will need their help. As well as subordinates, they might have great ideas so they should be listened.
Self-development: crucial part to stay up-to-date and a valuable part of an organization. All employers want to see motivated and self-determined people among their managers. And would always favor them when thinking about promotion.
The International Business, Environments and Operations book highlights the most important skills of a successful manager: accepting the responsibility, respect, balancing authority with good environment and trust with regular checks.
b) Company structures
Apparently there isn't a unified system of structuring an organization and I kind of struggled with finding a reliable resource. I have decided to trust the same book mentioned above.
The structure is set by vertical differentiation (centralization and decentralization of authority) and horizontal differentiation (specifying, which people should do specific tasks and who should they be responsible to)
Vertical differentiation:
in a centralized organization, decisions are made by senior managers with experience, local operations support global objectives.
+ decisions are consistent
+ senior executive can direct major change
+ reduces the risk of mistakes made by lower management
- low initiative among lower-level employees
- lower-level employees are only encouraged to work, not to think
in a decentralized organization, decisions are made by people who are the most familiar with the situation, local operations boost global performance
+ flexible decisions adjusted by customers, competitors and markets
+ higher motivation for lower-level employees
- risk of poor decisions made on the local level
- local interests at the expense of global performance
Today's world with it's changes and connectivity requires in 99% of national corporations decentralization.
Horizontal differentiation:
While the vertical differentiation is usually settled and doesn't change rapidly, horizontal is much more flexible and can be rebuild for short-term projects. The process that should be done when setting a structure should be the following:
1) specifying the tasks that have to be done
2) dividing these tasks among strategic business units, departments, divisions, teams,...
3) determining superior-subordinate relationships
Funtional structure: people are grouped based on their areas of expertise, fits well for organizations with narrow product lines and includes departments in a traditional way. Used for example by aircraft manufactures (Airbus, Boeing)
- everything is standardized, local opportunities might be overseen.
- people are encouraged to have narrow area of knowledge and skills
Divisional structure: people are grouped based on their location, product range or customer segment. Functions are duplicated and fits well organizations with many different products (for example the merger of Moët Hennessey and Louis Vuitton- product division, Nike- Geographic division)
- very difficult to maintain
- nobody has a clear view of the whole structure
- different division might vary in quality of products, leadership,...
Matrix structure: very complex structure, where different functions overlap each other. Makes the company very flexible and the staff qualified. There is no single line of command. This structure is usually used only short-term for specific projects.
Mixed structure: actually the most common one, combines features of all three mentioned above so that it suits the best the needs of a company. Often one company uses different structures in different countries according to the cultural background (Nike).
I also tried to find some advice for starting business and how they should create a structure. I found a short video by a business coach Rich Allen, whose main advice is: look to the future, where do you want to see your company in 3 years? And adjust the structure according to that. Also, the chart should focus on function, rather than on individual (so instead of: what this person can do? I should ask: what do I need to get done?) and finally realize that owner and manager don't necessarily have to mean the same and thus it might be a good idea to put the actual leading of the company to different hands.
c) Motivating employees
I would like to start with a concrete example of employee motivation. TED organization encourages their employees to take once a month free Wednesday and they call it Study Wednesday. The employees are told to use that day to study whatever topic or area they are interested in. It is something like an extra day to do this 'I would love to learn something new but I don't have time/energy'. So that the company can actually check that the employees didn't spend this free day watching netflix, every person has to give a TED talk about what they discovered. This way, they knew there was something they had to work towards and in a fun and engaging way they learnt something new, felt better about themselves and presented their findings to the others.
In my opinion this a great way to do something extra for the employees.
We all know the crazy benefits that employees of for example Google get and how their offices look more like a playground. I found a really interesting article that actually highlights the negatives of all of these features. Many psychologists have agreed that one of the main points of all of these crazy benefits is to make employees stay after work and basically 'erase' their social life outside work. In an ideal case, the employees would have all friends and necessary facilities within the company, which will ensure a great loyalty a last but not least aimed working efficiency. I find this opinion really interesting and I appreciate the view from 'the other side'.
A well-motivating company should encourage their employees to have a social life outside the company while giving a good performance during the working hours.
We again chose quite challenging range of topics, however this time I really feel like the research gave me a lot and I find the information helpful for my future. Creating a good-working structure and maintaining the staff effectively are the key factors to grow a business successfully.
Sources:
Anderson, C. TED Talks, The official TED guide to public speaking. Headline. London.
Daniels, J. & Radebaugh, L. & Sullivan, D. International Business Environments and Operations. Pearson, Global Edition. 15th edition.
City of London College. How Intrinsic and Extrinsic Motivation Factors Affect Employee Performance? URL: https://www.slideshare.net/SyedHasan6/gm-proposal-appleincfinalcopyofdissertation. Accessed: 18. September 2017.
Tour de Profit. Creating Your Business Organization Structure. URL: https://www.youtube.com/watch?v=MQAQ_y3x_DE. Accessed: 18. September 2017.
Workforce Singapore. Learn how to manage people and be a better leader. URL: https://www.youtube.com/watch?v=PWmhl6rzVpM&t=291s. Accessed: 18. September 2017.
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