There is a difference between an organization run by entrepreneurs and a professionally run organization. When reviewing the differences, two questions come to mind. What is the impact on the organization’s employees when comparing the two management styles? And what is the impact on the organization’s customer base? After reading this article you will be able to identify your current style. You may even want to set some goals to make some organizational changes.
Please note that there is no right or wrong answer. Most corporately run organizations are privately owned. And, many of these businesses transition to a professionally managed organization over a period of time. Professionally managed organizations can be public or private.
One caveat to this dialogue is the large mature bureaucratic public company that focuses on the stature and reputation of the organization. They have their own management style that is not directly related to this discussion.
Tea enterprise managed organization
1. The profit is considered as a result of the effort of the organization. It’s the old ‘the harder we work, the more money we make’ syndrome.
2. Planning is informal and impulsive and is based on the owner’s opinion of what is important at any given time.
3. The authority to act is based on ownership and is rarely delegated. Roles and responsibilities often overlap. There are no written job descriptions that are used to manage the behavior of employees who work in the company.
4. Decision making is subjective and can sometimes be emotional and selfish.
5. Training and development is most often done through on-the-job training.
6. Budgets are sometimes disorganized and there is little or no follow-up to discover the cause of variances.
7. Innovation is based on the willingness to take big risks.
8. Leadership is situational in nature and styles vary from directive to laissez-faire.
9. Corporate culture is loosely defined and may be family oriented; and there can be conflicts between what people say and what they do.
10. Performance management is non-adversarial and crisis-oriented.
The professional management organization
1. Profit is an explicit goal that must be achieved. The results are communicated periodically to those who have a direct impact on the achievement of the goal.
2. Planning is formal and carried out periodically and includes strategic planning, operational planning and contingency planning.
3. The authority to act is based on the position. Roles and responsibilities are clearly defined, mutually exclusive and exhaustive in nature.
4. Decision making is objective and based on objectives and metrics such as Key Performance Indicators.
5. Training and development is a regularly scheduled event and is based on a gap analysis by business function.
6. Budgets are strictly managed by standards and variations.
7. Innovation is driven by a willingness to take calculated risks. Challenges are communicated in a group setting.
8. Leadership is based on general performance objectives and styles vary from consultative to participative.
9. The corporate culture is well defined. Management aligns language, behavior and symbolism and is aware of conflicts.
10. Performance management is a formal process driven by an objective and subjective performance appraisal system. The process includes performance improvement planning.
Now that you’ve compared the two management styles, you should be able to answer the two questions mentioned in the first paragraph. To stimulate your thinking, I’ll close with a couple of thoughts of my own.
When your employees grow and develop, your customer base grows and develops.
A change in management style is a calculated risk and can cause stress and uncertainty. When organizational change occurs, sometimes valuable employees leave and find other work.
The entrepreneurial spirit can and does live in a professionally managed organization. In fact, it is that spirit that drives the recognition of a need for change to grow a business.