शिस्त (Shista) – Discipline – शस्त्र (Shastra) – Tool – शास्त्र (Shaastra) – Rules or Manual
Every entrepreneur sows the seed of his idea and dreams of his enterprise growing big. The founder takes the courage to start the enterprise and starts testing his business hypothesis. Here, the total focus is on getting the customers on. This the infancy stage for the business, at this stage many businesses are victim of infant mortality where the business idea does not shape up as expected, while those who succeed take the next leap.
With perseverance and hard work, the customers become raving fans, suddenly the business gets a boost. The growth impetus helps the business and the entrepreneur cover up the lost ground. Cash flow generated by business is deployed in creating infrastructure to enhance the production capacity and creating decent lifestyle for the founder and his family. Two major ingredients help the business growth –risk-taking ability of the founder and the ability to meet customers growing demand. This is termed as a GoGo phase for the organization.
As the organization travels through GOGO phase the entrepreneur encounters a trap. In the GOGO phase the organization tastes success, and the company goes way beyond the survival and starts to flourish. This new-found success helps people forget about the hardship during the infancy phase and give confidence to the organization; many times, this confidence gets converted into arrogance, with a capital A.
Go-Go companies are like babies who have just learned to walk. They can move quickly and everything looks interesting. Their initial success, makes the entrepreneur feel that they can succeed at almost anything that comes their way. To elaborate – on Friday the Founder of a Go-Go electronics retail chain goes away for the weekend. On Monday morning, he walks into the office and announces, “I just bought rights to manufacture TVs “. No one is surprised as it has happened before. The success of the Go-Go is the realization of the Founder’s dreams, and they work on a single premise – if one dream can be realized, why not other dreams too? This arrogance of ability to do all, is a major asset of the Go-Go, but if it is stretched to an extreme, it gets the entire organization into trouble.
The next phase is Adolescence, where the business needs to be clear on a specific product or service it is going to offer. The business not only focuses producing and innovating through entrepreneurial thinking. It develops its own administrative systems to plan, which helps them understand if the business is moving in the right direction. During this phase, if the business continues harness its capabilities of focusing only on meeting the customer demand of products through entrepreneurial thinking processes – which is the success formula of the GOGO phase, then there is danger of the entrepreneur remaining unfulfilled, as the entrepreneur will remain busy in active business managing; and feels void as he is unable to devote time to the many upcoming opportunities.
Adolescence is a critical phase for the organization, as it sways all the time between success and failure. If the company does well, there are no problems, but if there is drop in the sales, inability to meet the customer demand, unnoticed cost escalations which hampers the performance and results into finger pointing. Suddenly the loyal and performing team of the GOGO era starts feeling incompetent to manage this situation. The teams get divided into groups blaming each other resulting into conflicts. People start complaining about the injustice they and their departments go through. There is a split between new employees and old loyal employees. If the conflicts remain unresolved then the organization becomes bureaucratic and faces premature aging.
Successful passing through Adolescence phase leads to the next lifecycle for the business, which is Prime, where organization achieves balance between flexibility and control. If you see, both flexibility and control cannot be exercised simultaneously, hence in the Prime stage you see business always balancing themselves between flexibility and control.
During this phase, the organization needs to create a sense of purpose for its being, and guide through the vision that clarifies what to do and what not to do. There is need to develop predictability in the process for the business to steer through in a disciplined way, hence the need to develop near accurate systems of forecasting, planning, budgeting, management information and review system and above all develop consistent execution capabilities.
The organization aligns itself to set and achieve higher goals. There is a clear understanding what as an organization they will do and when to say no. The organization is no longer dependent on handful of customers or employees. It tries itself to de-risk on ongoing basis. There is defined organization structure. Platforms are created for expression to balance the opposing forces, which are required for developing the strategic thinking process in the organization. Meetings take over as means of getting things done. There is need to create alignment between vision, strategy, structure, information, resource allocation and rewards. This is an ongoing work. The entrepreneurial spirit is institutionalized to create a controlled and profitable innovation.
Prime is the height of success, and this phase can be extended for a long period of time, if managed well. The is important for the management to remain in this phase, as after this there is phase of fall – which is an aging phase, aristocracy – where the flexibility diminishes and the focus is only on short term, recrimination – where rather than solving the problems, energies are focused on blame game, bureaucracy – where relevance is lost and finally to death.
If we observe the entire lifecycle journey of an organization, we see at new phase, the entrepreneur must face new challenges and learn new discipline (शिस्त), acquire new tools (शस्त्र)and develop new methods (शास्त्र) to remain successful. Standing still not an option available and there is always a threat of failing. That is the beauty of being in the game of business.
Note: This article is inspired by the works of Dr. Ichak Adize. For further information, you may visit: www.adize.com
Sandesh Vasant Mestry