SALES AND EFFICIENCY ARE BEST TEAM MATES

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SIGMAX helps organisations execute strategies and improve productivity to achieve critical business results and improve balance for employees.  Using principals that compliment Lean and Six Sigma for the office environment, we help you take your vision and create a plan that cascades throughout all levels of your organisation.  Our consulting services will empower you to increase alignment and focus – individually, as a team or across your entire company - to better manage workflow and create more time for your mission, your clients and yourself.

It is the nimble and fleet-footed entrepreneurial firms that have supplanted the aging giants with new leadership approaches, a passion for value creation, and an obsession with opportunity that has been unbeatable in the marketplace for talent and ideas. These entrepreneurial ventures are the job creators, dinosaur killers, and backbone of the economy.

Because of their innovative nature and competitive breakthroughs, entrepreneurial ventures have demonstrated a remarkable capacity to invent new kinds of organisation and management. They have abandoned the organisational practices and structures typical of the industrial giants from the post-World War II era to the 1990s. Larger firms tend to lack creativity and the flexibility to deal with ambiguity and rapid change. Many of them made up for this with rules, structure, hierarchy, and quantitative analysis.

Contrast the multilayered, hierarchical, military-like levels of control and command that characterise aging capitalism with the common patterns among entrepreneurial firms: they are flat (often only one or two layers deep), adaptive, and flexible; they look like interlocking circles rather than ladders; they focus on customers and critical missions; they are based on education and influence rather than on rank and power. Entrepreneurs lead more through influence and persuasion, which are derived from knowledge and performance rather than through formal status, position, or seniority. They create a perpetual learning culture. They value people and share the wealth with those who helped create it.

Entrepreneurial Leaders Are Not Administrators or Managers

For the growing business, the general focus is on decisions owner-entrepreneurs make in recognizing and choosing opportunities, allocating resources, motivating employees, and maintaining control - while encouraging the innovative actions that cause a business to grow. The small business owner's challenge is to learn how to dance with elephants without being trampled to death! The ultimate goal of the entrepreneur is to develop the firm to the point where it is able to lead the elephants on the dance floor.

Consider the following quotes from two distinguished business leaders:

"MBAs are people in Fortune 500 companies who make career out of saying no!" - Fred Smith, founder, chairman, and CEO of Federal Express

"There isn't any business that a Harvard MBA cannot analyse out of existence!" - General George Doriot, father of American venture capital and professor at Harvard Business School

Those are profound statements, given the sources. These perceptions also help to explain the stagnancy and eventual demise of brontosaurus capitalism. After all, legions of MBAs in the 1950s, 1960s, 1970s, and early 1980s were taught the brontosaurus model of management. Until the 1980s, virtually all of the cases, problems, and lectures in MBA programs were about large, established companies. That has changed over the last decade as more MBA programs have introduced and expanded entrepreneurial offerings. Yet in many programs, the aging model is far from being extinct.

Growing Up Big - Stages of Growth Revisited

Managing and growing a high-potential small business is a different managerial game than sustaining an operation. Ventures in the high-growth stage face forces that tend to limit the creativity of the founders and team; that cause confusion and resentment over roles, responsibilities, and goals that call for specialization; that require operating mechanisms and controls and therefore erode collaboration. You will find this contrary to the entrepreneurial behavior you are used to. The reality is that structures, procedures, and patterns are fluid, and all members of the organisation - not just the founder - will have to respond with entrepreneurial thinking.

The first three years before start-up are called the research-and-development (R&D) stage; the first three years, the start-up stage; years four through ten, the early-growth stage; the tenth year through the fifteenth or so, maturity; and after the fifteenth year, stability. Remember that these time estimates are approximate and will vary by industry and particular circumstances.

Various models depict the life cycle of a growing firm as a smooth curve with rapidly ascending sales and profits and a leveling off toward the peak before dipping toward decline. In truth, however, very few, if any, growing firms experience such smooth and linear phases of growth. By and large, if the actual growth curves of companies are plotted over ten years, the curves will look far more like the ups and downs of a roller-coaster ride than the smooth progressions usually depicted. Over the life of a typical growing firm, there are periods of jerks, bumps, hiccups, indigestion, and renewal interspersed with periods of smooth sailing. Sometimes there is continual upward progress through all this, but with others, there are periods where the firms seem near collapse or at least in considerable peril. Ed Marram, an entrepreneur and educator for twenty years, characterizes the five stages of a firm as Wonder, Blunder, Thunder, Plunder, and Asunder. Wonder is the period that is filled with uncertainty about survival. Blunder is a growth stage when many firms stumble and fail. The Thunder stage occurs when growth is robust and the entrepreneur has built a solid management team. Cash flow is robust during Plunder, but in Asunder the firm needs to renew or it will decline.

Core Management Mode

As was noted earlier, changes in several critical variables determine just how frantic or easy transitions from one stage to the next will be. As a result, it is possible to make some generalisations about the main management challenges and transitions that will be encountered as the cornpany grows. The core management mode is influenced by the number of employees a firm has, which is in turn related to its dollar sales.

Until sales reach approximately $5 million and employees number about twenty-five, the core management mode is one of doing. It becomes managing with between $5 million and $15 million in sales and twenty-five to seventy-five employees. When sales exceed $10 million and employees number over seventy-five, the core management mode is managing managers. Obviously, these revenue and employment figures are broad generalities. The number of people is a better indicator of the increasing complexity of the management task, and suggests a new wall to be scaled, rather than a precise point. Explosive sales per employee was one of the failed promises of the Internet, and to some extent the irrational dot-com valuations of the late 1990s were an anticipation of technology massively leveraging variable employee expense.