Dear Colleagues! This is Asrar Qureshi’s Blog Post #765 for Pharma Veterans. Pharma Veterans welcome sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. Please email to firstname.lastname@example.org for publishing your contributions here.
Continued from Previous……
We explore reasons why organizations fail to perform up to mark and become tired.
Keeping Tight Control
When an entrepreneur starts an enterprise, particularly a small one, he has to do all major functions himself and also have to keep a tight control so that nothing may go wrong. Also, that he can do necessary corrections and adjustments even on day-to-day basis. As the business grows, core functions evolve, and some delegation also becomes necessary. All entrepreneurs who fail to let go at appropriate times become a suffocating mechanism for their business. It should be understood that larger enterprises cannot be run without a team which is adequately empowered. The reasons for holding on tightly may be insecurity, fear of failure, fear of embezzlement, fear of loss, and a general mistrust about everything. The fears apply to everyone, even their own children, who are allowed to work but not take any decisions. Plenty of examples in pharma industry exist where stubbornness of fathers/elders had led to stalling of progress and loss of business and standing.
Another form of tight control is to hold on to old style of running and managing business, with utter disregard for whatever developments might have been taking place. The last three decades have seen huge changes in every industry; the rate of attrition is also huge for all those who chose not to go along with the changes. For pharma industry, production equipment and speed has seen major development, quality control and assurance has seen many new measures added, regulatory affairs have been reinforced with several new regulations, and so on. There is no area which has not seen change. There are new recommendations about plant layout, flow of materials and personnel, storage practices, stability studies, health and safety, environment protection etc. It is impossible to ignore these changes because business cannot be run anymore in the old ways, even though our regulators are lax and compromising.
Tight control also prevents diversification, if available. Diversification comes in various forms, such as many pharma companies have included healthcare products in their assortment because these are popular now, and do not have price control. Similarly, many pharma companies have explored international business successfully, but a much larger number has not even started in these areas. There are other forms of upstream and downstream diversifications which most companies have not even started considering.
Tight control reflects greatly in management practices. Over-centralization is the hallmark of management in these organizations. There may be hierarchy on paper, but the delegation would be absent. No manager, whatever their seniority may be, are authorized to do anything on their own; they must seek permission from the chief. It also means that the management practices shall remain conservative and averse to modern concepts. Management practices have undergone major changes in the last about fifty years. We, in Pakistan, are not in line with modern concepts in general. We have not been able to appreciate the significance of these developments. What is lost on us is the fact that the new concepts have been designed to promote the success of business, and not for greater benefit of human resource. Human resource’s benefit is there, but it is part of the tools for greater success. The entire world is focused on business success, and all facilities or whatever are provided are only for this purpose. Even the environment concern is primarily for the long-term sustenance of business, not people. Most entrepreneurs believe that facilitating staff is a waste of money, which it is not. Problem lies with our poorly designed jobs which have inbuilt wastage. If we design job better, hire right people, and give them required environment, the performance shall increase exponentially.
Tight control shows particularly in procurement practices. Incidentally, procurement is a function which either the business owners never delegate or do it at the last stage. The emphasis is on cost-saving, neither time saving nor effort saving. Poor quality equipment is purchased which keeps wasting time and resources. Materials will be switched to save small amounts while compromising on the quality maybe. Adequate working tools shall not be available, though the expectation of performance would high. It is true that any money saved in procurement would directly add to profit; it is equally true that small savings shall never match the big profitability earned through better efficiency.
Lack of Vision/ Tunnel Vision
Where does the vision come from? From the top. The employees do not make the vision of the organization, they execute it if the vision is shared with them. Tired organizations either do not carry a vision or lose it somewhere on the way. Every entrepreneur starts with a dream, desire, ambition which sustains him/her on the tough path of building, running, and maintaining the enterprise. The same attributes are converted into vision with some changes as the business grows. Every success adds to confidence and gives new courage to do bigger, better things. Having said that, all entrepreneurs do not have the same mindset. Some want to make it big; others are contented with a decent survival. The basic difference is inside the person whether he wants to break the barrier of his own person or remain confined within it.
Lack of vision leads to going round and round in the same circle. Every day is the same, same job performed in the same manner, same environment, and same issues, which become chronic and a source of pain. The entrepreneur does things on day-to-day basis without longer term thinking.
Tunnel vision is slightly different from lack of vision; it is e entirely unidirectional. In a tunnel, side views are blocked, and we can only see in the front and that also in a narrow way. People with tunnel vision suffer from the same problem, they are focused on a narrow way and would not think about other opportunities that may present on the way. Often, they try to present it as a commitment to the original idea and that they prefer to standby it. Second generation of entrepreneurs may present it as carrying the vision of their previous generation. It is an excuse to hide the tunnel vision.
Vision is an abstract thing, an idea, a dream, a commitment. It is translated into mission statement, which is the reason for existence of a company. Money making may be a common mission of all businesses but there are other elements also besides this basic intent. In fact, good businesses never say their mission is making money, their mission statements are different; money comes in as a byproduct.
Tired organizations do not carry a vision anymore, their only reason for survival is existence, and they do not see or think beyond that.
To be Concluded……
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