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ENTREPRENEURIAL ORGANIZATIONAL DEVELOPMENT SKILLS FOR A GLOBALIZED ECONOMY
By Dr. Wayne Eisenhart

What are Entrepreneurial Organizational Development Skills?

Why should I be concerned about them?

"I'm too busy with my day-to-day responsibilities
to worry about this type of thing!!"
 

Being in business has never been easy. However, things are getting tougher for entrepreneurs and managers as the global marketplace around us changes. Business people are being forced to deal with increasing demands and types of pressures not encountered before. Since the recessions of the 1990s in many regions of the world, businesses are being forced to produce more, quicker and at lower cost. Demands from customers have increased and in order to cut costs, relationships with vendors have had to change. Rapidly changing technologies offer both promise and peril. Businesses face increasing competition often from unexpected places.  The globalization of the world marketplace is forcing business to adapt or suffer the consequences.
 

Entrepreneurial vs. Tactical

At its simplest, what businesses need to deal with the complex business pressures of today are leaders and managers who do not just function on a tactical day-to-day basis. What is needed are those who are able to think, plan and execute on an entrepreneurial and higher level. Entrepreneurs and managers need to take the time to think, plan and manage more in order to meet the complex pressures on businesses today.

Leadership and management means looking at the bigger picture. It also means developing and managing employees and having the ability to reinvent the business when needed. Businesses today need to be lean with low overhead and be able to be quickly responsive to changing market conditions. We must produce more, of a higher quality, faster and at lower cost, while maintaining superior customer service and at the same time having managers who also are leaders.

Looking at the big picture, planning ahead, watching for opportunities, while at the same time restructuring and managing a more efficient and responsive business or department -- this is what Entrepreneurial Organizational Development Skills are all about. Far too many managers focus way too much on the day-to-day level of activity. Oftentimes I have heard businesspeople say that they are "too busy to think". The typical businessperson works hard, fast, and almost frantically on a day-to-day level. This is good, but in order to survive in today's changing business world, Entrepreneurial Organizational Development Skills and thinking are also required.

To summarize, due to the increasingly complex pressures on businesses today what is needed are two things: 1) an efficient business or department that can quickly respond to changing market conditions; and 2) a manager with good Entrepreneurial Organizational Development Skills who can chart the proper course by being the captain on the bridge of the ship, not working down in the engine room. Senior executives of larger businesses often manage too little because they focus on the doing projects while not sufficiently delegating to subordinates or ensuring that everyone is on the same page.
 

Highest Level of Economic Function

Learn to always perform at the highest level of economic function - don't do lower cost tasks that can be delegated, e.g., a controller doing bookkeeping or the owner driving a truck. As a business owner, what tasks are the most profitable for you to do? As a department head or senior executive, what is your highest level of function that contributes most to the business? The key to managing and performing at the highest level of economic function is delegation. Most managers, to a significant degree, do not delegate sufficiently. You will find that your staff likes being given new duties; they feel trusted when given something other than the same old tasks. The key to delegation is follow-through; "Inspect What You Expect". The secondary key is training to better enable delegation.
 

Role of Middle Management

A particularly important Entrepreneurial Organizational Development Skill is the ability to review and improve middle management. Smaller businesses should strengthen their middle management to allow the senior manager or owner more time to perform at their highest level of economic function. As stated previously, businesses today need to be more quickly responsive to changing market conditions. The problem with larger businesses is that middle management is often too large and bureaucratic, thereby slowing down dynamic decision making and implementation. Larger businesses should weaken their middle management and reduce hierarchy by breaking the business into smaller accountable units when possible. Instill entrepreneurialism by reducing hierarchy and initiating  incentivization.
 

Principles of Leadership

Listed below are some tasks that should be undertaken when reviewing and improving the function of the business, of middle management, and as the owner or senior manager takes on more leadership tasks:

1. Remember the Rule of 7's -- This implies that the smart manager does not supervise more than seven subordinates. The key here is to improve control by not controlling too much. If you try to supervise too many people you can't really do a good job of it. Properly supervise seven subordinates and develop additional infrastructure under them as needed. This will give better control to the senior person and more time for leadership tasks.
    
2. Clarify The Chain of Command -- Who goes to who, for what? Who has what authority? Ensure clear communication and levels of authority.
    
3. Promote Specialization -- Specialization increases efficiency by using the same staff and the same workload to produce higher profits. For example, if you have two clerks both doing receivables and payables you will get better productivity and accountability if you separate the tasks and one clerk does only receivables and the other clerk does only payables.
    
4. Promote Accountability -- Eliminate dropped balls and mistakes by reviewing job descriptions. Insure that all employees know exactly what is expected of them and how they will be held accountable.
    
5. Ensure that there is adequate staff to handle the workload. Most entrepreneurs don't. An interesting thought is that many times there is an excessive concern with overhead to the detriment of profit. An example of this is that department stores hire extra cashiers at Christmas time to handle the additional workload in order to increase profits. What would we think of a department store manager who said he did not want to handle additional staff during the next Christmas season in order to keep overhead down?
    
6. Standardize, boilerplate, and develop manuals for all systems, procedures and positions. Although this will take time, it is an extremely valuable tool to provide stability, control and ease of replacing personnel.
    
7. Most managers throw money or more staff at problems. This can cause high overhead when growing. The way to prevent this is to first organize the business, review the middle management, maximize delegation, clarify the chain of command and promote specialization. Make sure that everyone delegates downwards If you need to hire additional staff always look for the opportunity to staff from the bottom up at lowest cost. Examples of this would be instead of hiring an expensive architect or engineer, hire a draftsperson, instead of hiring additional salespeople hire an inside sales support clerk, instead of hiring another secretary, hire a secretarial assistant. In this fashion you can grow the business and expand your staff while keeping your payroll costs down.
    
8. Use the productive capacity accordion to keep personnel costs down while the workload fluctuates. Think of the "bottom" of the business as having an expanding and shrinking accordion. This will help keep your overhead down in changing market conditions. Organize the business, have everyone delegate downward, hire and release temporary workers at the cheapest level possible as needed. Convert temporary workers to permanent workers as the business stabilizes.

This article published on-line, in Malaysia and in the Philippines.
 

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Dr. Wayne Eisenhart
Professional Keynote Business Speaker & Trainer
Entrepreneurial Development Group(EDG)
Dr. Eisenhart may be contacted initially by email.
E-mail: wayne@futuremaker.biz
Web: www.futuremaker.biz

Dr. Wayne Eisenhart is a dynamic international keynote speaker, public speaker, professional speaker, business speaker, management speaker, and business consultant on today's most critical business issues. He specializes in entrepreneurial development, business development & business management, globalization issues, leadership training & leadership development, management training & management development, organizational development, customer service, hiring, training, and supervision, building profits in any economy, and more. He is available to speak at conferences, conventions, public speaking events, seminars, meetings, custom programs, in-house presentations, organizations, shows, speaker bureaus, and special events.