There are many intelligent and creative entrepreneurs in this world. Some with very successful businesses while others not so much. For those businesses who are not so successful, what happened along the way? What set them apart from companies that were able to grow into these amazing profitable businesses? Let’s look at small businesses in the Food/Restaurant industry. While they cannot compete with larger restaurants, some small businesses generate decent cash flow and profit and continue to stay in business. From the SBA (Small Business Association), about two-thirds of new businesses survive at least two years and 44 percent survive at least 4 years based on a 2010 statistics. Is the failure because of the location site? Inadequate funding? Poor marketing? While those are some reasons as to why most new small start up businesses fail, a majority of the failure is because of poor management. Yes, we have all worked for and/or is currently working for someone with terrible leadership skills. It is people like them that actually harm businesses. “Businesses do not fail, leaders do”.
For the past few classes, our learning activities mostly exhibited poor management styles. The activities I remember were the Red Bead Experiment and the story of William Sowden Sims. For those who don’t know what these activities are, the red bead experiment provided a scenario of a white bead manufacturer which consisted of a plant manager, a chief inspector, two inspectors, and 6 willing workers. The plant manager repeatedly told the workers to manufacture 50 white beads with no defects (red beads), but it was impossible because the process was based on luck. The workers even suggested a few ideas to help improve the process but the plant manager wanted them to stick with the plan. The manager needed to implement a process improvement to get the results she was looking for. Bad management was shown when the plant manager expected workers to improve their performance with little to no defects without changing the process. William Sowden Sims was a navy artillery officer during the period of the 1898 Spanish-American War. He modified a gun that could significantly improve the accuracy based on his calculations without additional cost, manpower, and technology. He submitted his proposal to his superior officers only to get ignored. The reasons behind were if it could be done, someone would have already done. In the end, Sims’ proposal was adopted and his calculations were correct and the accuracy increased tremendously. Poor managament was shown when the superiors thought they knew what was best. These activies definitely helped me realize how crucial the role of management is in any organization.
Without a doubt, good leadership is essential for any company’s success. It means that management can make valuable and wise decisions. Management can reach objectives, goals and have an insightful vision on how to expand the business.
Poor management means poor leadership. My question is what is it that makes a leader bad? Is it their pride and ego that if they listened to others they will appear weak and vulnerable? Or is it just because they are arrogant and stubborn?