A fundamental question that was asked of us as undergraduates in economics class was to identify the difference between the short run and long run. My professor answered that no one lives in the long run. While a human may not live forever, corporations in theory can last forever. What lessons for success in the long run can be applied to the short run to which we are all allocated?
An organization in the long run needs a core religion or set of cultural values that will unite the current group of people and yet be able to transcend into the future. This concept supersedes what any one individual or leader can contribute. What are the values, rituals, and sets of behaviors and beliefs that will unite people and carry them past the current functions they need to perform? If no one lives in the long run, why should we align our companies to survive and thrive? Because the guiding principles will help assure success in the short run where you and I do live.
The role of the manager or leader is to develop a culture that will continue to assure a stream of profits. Whether you head a ‘for profit’ corporation or a nonprofit, in order to succeed your income must exceed your outgo or your upkeep will be your downfall. But focusing on profits is not the key to attaining them. Profits are an outcome of the properly invested energies, leadership guidance and assets of the organization.
What are the inputs then? Here’s where we get to revisit some basic fundamentals of successful management. Fundamentals are those things that have not really changed in many years. My mentor, Jim Rohn, used to say, “beware of someone coming along and offering you new fundamentals.” In this challenging economic environment where there is more talk of ‘transformational’ changes in the habits of buying, borrowing, saving and investing of consumers, reviewing the fundamentals may help guide us forward.
The good manager will first define the task or responsibility at hand by determining the needs of the clients to be served. These can be internal or external clients or customers depending on your role in the organization. But everyone has needs to be satisfied and satisfying those needs is why we have a job. A business cannot exist very long in the short run or certainly not in the long run if there are no clients to serve or sales to be made. I know that the targets may change quickly, regularly and quixotically but that’s why managers or leaders are supposed to be paid the big bucks if they can keep up with the changes and remain ahead of the curve.
Next, the manager must identify what type of staff is required so that the team can complete the tasks as defined. Do you have the right people in the right place with the right training and competencies? What assistance may be needed to build a strong and capable team? Have you communicated the mission clearly? How do you plan to compensate the contributors to the accomplishment of your task? Some may be paid salaries, some commission and others may be rewarded in various ways such as recognition or promotion or legitimate golden parachutes. A manager, like the weakest link in a chain, will only be as good as his or her ability to assess the purpose of the organization and mesh that with the desires of the team members assembled for the purpose of accomplishment.
To identify and perform the service required would define effectiveness. Administrating your team and the required assets appropriately would describe your efficiency. A proper combination of both is required. You have to know where you are going and the best way to get there. You want to arrive at the right place for the right cost.
Another value of the leader is to be the constant entrepreneur and be proactive in continually determining what the effectiveness is in the long run. Has the market changed? Have the needs of our clients changed? Is the staff I have still in possession of the skills required to deliver the goods and services? Can the leader integrate the assets for the long run? When an organization is no longer effective or efficient, what training, consultation, flexibility, support from the board of directors or lending institutions or stakeholders will be required to get back on track? How can the organization repair itself?
If these factors cannot be managed, then how else can we attempt to survive for the long term? Have the current leaders taught their skills and told the stories of their experience to their workers so that the leadership functions of analysis and performance can manage the future transitions required? Have the fundamentals of your business been communicated to the upcoming crop of leaders so that the organization will thrive in the present times and be prepared for future success?
Who is asking these questions in your organization and who is preparing the responses? Stepping into or continuing in the leadership role demands mastering and implementing the fundamentals of success for your short term gains that are guided by the long term cultural principles in your organization.