Schlagwort-Archiv: Market

Leaders have the choice

The more people work together, the more it matters to be aligned to a goal, to obey common rules and to understand each other. Collaboration nowadays not only takes place between functions, but also across the borders of the enterprises and the sectors. Thus, different values and rules collide. Complex structures with mutual relations and dependencies evolve. The coordination is a form of control as part of the leadership tasks *1. The good news is that leaders have the choice, how they coordinate.

Koordination

Out of various possible mechanisms for coordination, the following provides a manageable mix of alternatives for controlling groups.

  • Market
    The introduction of market rules steers indirectly the interplay. Since all activities are connected to expenses, the contest based on supply and demand offers a quasi-automatic regulation of the options. The more alternatives are available, the smaller the costs. The rarer the offer, the higher is the price. With this approach, especially internal services that are providing cross-charged deliverables decrease the expenditures in the mid-term.
  • Agreements
    Anyagreement (e.g. contracts, policies, compliance to standards) determines the type of cooperation. The formal definition of rules guarantees early on that all involved people are clear about what is expected. Since an agreement requires the consent of all contracting parties, the interests of all are considered.
  • Partner selection
    The coordination through a conscious partner selection already defines before the actual cooperation the common rules. The appropriate selection criteria, admission rules and the desired etiquettes have to be visibly documented in advance. Thus, all involved people know what they are in for and whether they want to participate in this collaboration or not.
  • Result orientation
    The results that are agreed in as goals, synchronize all activities. This requires a consistent planning, to which the individual goals refer. The employees receive thereby a clear target and leave them with the freedom of the how-to. The HR systems for the control, the evaluation and the motivation are based on it.
  • Hierarchy
    The classical approach of leadership assigns the tasks, the authority and the responsibility to the participants on different levels. The chain of command that determines the control, the decisions and the escalation procedures is clearly defined. The superordinate level has thereby the right and the obligation to lead.
  • Linking-Pin
    Pro-active coordinators keep the projects continuously moving. The so-called linking-pins assure as overlapping contact partners the mutual exchange through management-by-walking-around. A linking-pin reaches from the driver, to the caretaker, to the supporter of the collaboration. In any case, the linking-pin functions as connection between the involved units. They are able to translate the different requirements in such a way that everybody can understand and obey.
  • Diplomacy
    One of theoldest procedures is surely the negotiating skills of diplomacy. Similar to the linking-pin, it is only activated after there is a need for coordination. In the simplest case, the exchange of ideas begins   between the involved people. However, also negotiations are organized or, in the case of crisis, mediated between the parties. A typical format is the Taskforce.

In principle, the coordination mechanisms can be used separately or arbitrarily mixed, as long as the cooperation and the goal achievement happen in the end. Since the conditions of the business are changing constantly, the hierarchy is surely the most difficult to use, since it needs a long time, in order to be established fruitfully. Linking-pins and diplomats are surely the most practical solutions in times of change and for various cultures.

*1) Additional leadership tasks are the self-management, the conception, the communication and the cooperation

Growth happens at the expense of others

Growth evolves in enterprises towards the one, determining key figure. All efforts serve only to increase profit, revenue, market shares, and productivity. The system is part of an environment, has defined borders and exchanges energy with other systems. Within the system, the subsystems also exchange energy.

Where does the energy for growth actually come from?

Wachstum

Examples of systems are:

  • Living organisms that need food;
  • Machines that require fuel;
  • River systems that swell with tributary rivers and rains;
  • Families that become larger through offspring;
  • Enterprises that expand.

In principle, any growth is created by adding energy from the outside. Creatures have their energy through wining and dining. If food is missing for a long time, the organism dies. The car that is not refueled stops. As soon as creeks and other rivers dry up and the rain is absent, a river drains. Families without descendants become extinct. Enterprises enlarge by opening up new markets, by pushing competitors out of the market or by purchasing enterprises. Within the system, the energy likewise shifts, i.e. gets rearranged. Thereby individual subsystems grow. However, the total energy of the system does not increase. The reallocation even leads to a loss of energy that results from the efforts for the change.

In the enterprise, this shift of energy appears in many places.

  • With the takeover of enterprises the revenue, the profits, the market penetration, the procurement volume and the number of employees grow at the expense of the related investments and the employees that do not ‘survive’ the fusion.
  • The reorganization of processes costs the energy of the change efforts and the employees, who are loosing their tasks.
  • New technologies come from the outside and produce drain of energy in the form of cash flow. Beyond that, the employees again pay part of the bill with the loss of their tasks, either if they are transferred or dismissed.

Bottom line: For growth, you need energy form outside. Any growth happens at the expense of others. Internal growth yield no results to the overall system, because energy moves only from the right into the left pocket or gets simply lost through the efforts.