New Delhi: Of the five basic principles governing business management, the first flows from the reality that all business is ‘human’ activity as it is an operation ‘by the people and for the people’.
Various facets of business-promotion of a ‘product’ or ‘service’, the role of an investment banker or a regulator and customer outreach- all involve human interaction and even the ‘return on investment’ or ‘profit and loss’ worked for individuals who owned the business and the shareholders who had stakes in the corporate entity.
Business depends a great deal on the concept of ‘productivity’ leading to ‘profitability’ and this is connected with the ‘efficiency’ of individual employees. Efficiency was, by definition, a measure of the ‘output per unit of time’ and was, therefore, a test of the ability of the organisational leadership to produce a stress-free work environment that enabled the members to work with a greater concentration of mind-‘concentration’ being a prime determinant of the time-output ratio.
Business seeks customer loyalty by enhancing its ‘brand’ appeal, offering incentives and utilising the feedback from the people who came in contact with it at any point of time. Any business is, in the ultimate analysis, run by a set of individuals who make decisions for it.
The operation of human factors in business is manifested also in its constant endeavour to find innovative ways of reaching out to potential customers through personalised communications based on the analysis of data on their buying preferences. In the highly competitive environment of these times, the advantage of a business entity is largely determined by the extent to which it can reach out to potential customers with a special appeal and retain the loyalty of its existing circle of buyers.
The second principle of management that must be followed by any business is that knowledge-based decision-making is the ‘anchor of success’ there and that the relevance and reliability of the information used for it would largely decide if the right pitch had been laid for achieving the organisational goal.
A couple of guidelines about accessing information would be helpful. Since most information is publicly shared no sooner than it was produced, giving rise to large data banks-thanks to the Information Technology Revolution- the importance of ‘data analytics’ for producing futuristic readings, had sharply increased.
A certain ‘completeness’ of information was desirable since ‘knowledge comes in integral packages’ -an employer with a large work force of men and women, for instance, had to have knowledge of the laws relating to gender harassment at the workplace.
Also, since businesses had to have coverage of a large number of knowledge points ranging from government policies to socio-cultural trends of the times and since all competitors by and large had access to same information in the present, advantage would come to those who could have ‘a peep into what lay ahead’. This is what Intelligence provides making it clear that ‘all Intelligence is information but all information was not Intelligence’.
Business Intelligence gives an idea of the opportunities and risks in the future and by availing of the former and averting the latter, a player could secure a competitive edge.
Corporates invest substantially in establishing an internal unit for producing insights through ‘data analytics’ and using Artificial Intelligence and ‘Machine Learning’ for enhancing productivity and evolving new products and services.
It can be safely predicted that the Age of Information was transiting to the Age of Intelligence’ setting a new benchmark for global competition. It may be mentioned that the use of cyberspace and social media for ‘misinformation’ and resort to ‘deepfakes’ has added a great deal to the importance of the reliability of data being used for business purposes.
The third guideline of management relates to the changed character of the business organisation, itself. In the era of the ‘knowledge economy’ the traditional concept of an ‘organisation’ that had a hierarchy of leadership, a one-way flow of orders ‘from above’ and a marked divide between those who took decisions and the compliers who constituted the bulk of the pyramid, has changed.
The output of individual employees- important as it was- has been overtaken by the team performance with the result that the organisation could be deemed to be an ‘assembly of teams’ carrying out various functions and that the role of the Chief Executive Officer was now better defined as the person at the apex who accepted accountability for internal coordination among the teams, general oversight on productivity and liaison with external authorities.
While constituting teams it had to be remembered that ‘diversity’ could be a source of strength, that the team leader and members should act as one without getting distracted by concerns of credit-sharing and that the team had to be enthusiastic enough about ‘beating the dead line’ rather than just meeting it.
A successful organisation is known for three things- that there was a clear understanding across all its members, of the Mission of the collective body, that the boss-subordinate relationship was ‘nurtural’ in the sense that the senior was free to ‘task’ the junior but was available for providing guidance to the latter when asked for and finally that its management was ethical in the sense that it believed in merit-based evaluations and placed emphasis on the integrity of its employees.
Fourthly, business ‘leadership’ has a new mandate in the Age of Information in regard to the responsibilities for the organisation, the employees and the productivity.
Today’s leaders have to be information savvy- actively seeking the information they wanted and believing in the dictum that ‘information does not reach you, you have to reach the information’. They were adept at devising a system by which whatever information existed within the organisation was mopped up and utilised along with the data built by the ‘business intelligence’ unit.
The head of the organisation should understand that ‘ nobody knows everything but everybody knows something’. He or she should look upon a worker as a centre of productivity and see to it that the employees are provided with a work- culture where there is transparency about judging somebody’s performance, interpersonal relations measured up to the framework of ethics and the mission of the organisation was understood by all. Since all business is human activity, success there was rooted in the ability of the leadership to handle human relations.
Anybody in a leadership position must be willing to interact with people, must have an interest in human psychology and behaviour and must be empathetic towards the employees that will be possible only if the leader has a certain degree of ‘emotional intelligence’.
Among the recognised traits of leadership especially important are its trustworthiness, decisiveness and impartiality. A leader derives strength from the ‘power of authenticity’ rooted in these attributes and shows mental strength in a situation of organisational contingency. The leader can ‘ride a change’ and not be subdued by it.
In the era of Artificial Intelligence, the leadership can get the best out of it by remembering the words of Albert Einstein that ‘imagination is more important than knowledge’ and appreciating the fact that imagination was a gift granted to the human mind not available to machines. A person with imagination does not miss the wood for the tree.
Finally, of all the principles of management, it is the quality and adequacy of communication within the organisation that has now emerged as the most important factor determining the prospects of its success.
‘Digitisation’ facilitating ‘work from home’ that featured supervision from the remote, online meetings in which in-person interaction across the table was highly structured and not spontaneous enough and increasing utilisation of AI-guided ‘writing assistants’ in business operations, have all made the communication style of seniors a crucial ingredient of this success.
Communication is unambiguous, precise and purposeful and it should be in line with the ‘need to know’ mandate that was the hallmark of data security. In fact, the cyber security issues have enhanced the importance of establishing a ‘System Administrator’ in compliance with the legal requirement. This is a direct responsibility of the head of the enterprise.
Personal interactions at the workplace between seniors and juniors or among peers may have to be guided by the organisational ethics governing communications, as laid down by the leadership of the corporate body. The success of a business enterprise is highly dependent on the quality of communication its leaders and representatives have with clients, customers and the general public.
(The writer is former Director Intelligence Bureau)
–IANS
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