ASIA FOCUS

Introducing systems and processes

A big part of a young company's challenge in retaining its key managers resides in its ability to evolve from having one charismatic leader to a more systematic type of management.

This process unfolds alongside an ongoing, strategic evaluation of the company's growth opportunities, as the founders and management weigh the pros and cons of expansion, and assess whether these are worth the loss of the entrepreneurial personal touch.

Timely establishment of systems and processes is critical for the long-term sustainability of the organisation, and senior management is a part of a more "templated" organisation.

INSEAD's research on leadership refers to this growth stage as the experience of "What now?"

As the organisation grows and matures, the role of the entrepreneurs, too, changes. From actively managing every aspect of the business, they make the transition to more strategic and mentoring roles. The team of senior managers that the founder has hired thus plays an instrumental role in managing not only the organisational change, but also, in the case of the entrepreneur, personal change.

The introduction of new systems inevitably leads to more empowered employees and a possibly diminished role for the organisation's founder.

There is also the risk of irrelevance, as changing times mean that the owner's competences that produced the initial success may not be as valid in a more mature organisation. And it is for this reason that many owners resist the establishment of more formal structures - they fear the potential loss of control.

Ultimately, they may drive their business to failure or be driven out themselves. On the other hand, when approached thoughtfully and proactively, systems can be critical to a succession plan, as entrepreneurs can feel confident about handing over control of the ventures they founded to their managers.

Growth can also lead to a change in the organisation's "DNA" through a continued amalgamation of cultures and values that may be different from those of the owner.

The respondents in INSEAD's survey reported they valued employees who demonstrated openness to new ideas and change. However, at the same time, they expressed a preference for employees who shared common traits and values.

The majority of respondents agreed that managing this contradiction was a challenge that required pulling together the best western management techniques and merging them with effective Asian leadership practices.

Bangkok Post
Sunday January 28, 2007