How managerial skills and games impact the development of the company´s elite

publication date 24.03.2008

Management game

Any business that is being built rationally, that wants to prosper in the long term, invariably, in their strategic vision, puts the following target  first -  creation of the company´s (corporate) elite. The reason is simple: if the elite wants to do business, they have to live and create in an organized manner, utilizing both internal and external resources and, last but not least, forming a rigid organizational structure on which to build up processes as the next stage. 

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Introduction

Any business that is being built rationally, that wants to prosper in the long term, invariably, in their strategic vision, puts first the following target  -  creation of the company´s (corporate) elite. The reason is simple: if the elite wants to do business, they have to live and create in an organized manner, utilizing both internal and external resources and, last but not least, forming a rigid organizational structure on which to build up processes as the next stage. These processes, then, through a systematic control, realize the company´s know-how which, ultimately, generates a production yield that satisfies the most important element of the market mechanism called a customer.

The question now is who forms a company´s elite?

A company´s elite (the term is derived from a Latin word eligere meaning to select or to elect) is a term of social sciences that denotes a category of people who take a leading or significant position within a company´s system or subsystem. They are carefully picked out by the owners because of their individual qualities, professional qualities or social position. This group is self-organized, for its members are interested, both personally and because they depend on it for their livelyhoods, in building up a company according to a vision they have helped to create. 

The number of a company´s elite members is relatively low, which enables them to act jointly, consciously and coherently (the synergic effect). The processes of communication in the elite are easier, and its members can quickly be mobilized to formulate a vision or a policy. Thus, the members of a company´s elite actually own the firm´s operational initiative, its know-how, resources and, as is most often the case, also its assets.  

Why is a company´s elite useful? 

Enterprise is the most general process in the human society of the day that the society uses to shape their environment. It is complex, interdisciplinary, unstable and, often, also unique. A firm´s objective is always to make a profit. In order to maximise the profit, however, that firm needs an original know-how by the company´s creators and “builders“.  It especially holds good at a time when “the process of enterprise“ is being implemented in the market environment by companies and businesses themselves; in other words, each time a company wants to prosper in the environment, which means getting a “place in the sun“ on the market.

On the other hand, the complexity of the market environment in which this process is being introduced has been showing rather high turbulences over the last century in particular. They are brought about by a quaintness of the processes of enterprise being so introduced into the market environment.

As is well known, this term can be included in a sphere of science called chaos and the catastrophe theory. It is also known that implementing enterprise as a process in a turbulent environment requires creation and realization of strategies often called “cut-throat strategies“. The reason – rivalry among the companies in order to achieve a maximum gain.

Apart from others, the following rank among the most important factors of rivalry that effect the turbulences of market environment: ever-evolving needs and requirements of welfare systems, new scientific discoveries (the theory of qualities, for instance), emergence of new sociotechnologies of survival and development of social and biological  systems or, as the case may be, the rise of populations demanding an adequate right of existence on a planet called the Earth.

Based on the above factors which do not by far form a closed set, if any company wants to make it within already simplified yet turbulent environment, it has to be able to change itself. The most crucial requirement here is the company has to be introducing changes with such a speed and in such a sophisticated manner as they match the coming dominant and clearly selectable changes, phonomena and events in the market environment. 

The changes are being brought about, on the one hand, by a particular kind and type of turbulences, on the other hand, by the turbulences´ time characteristics (typical examples: the volatility of trading at stock-exchanges). 

Each time companies fail to react to changes brought about by the market turbulences, one or, as is most often the case, a whole range of constrains are placed on those companies´ ability to survive. Turbulences intensify situations in which companies have to overcome survival obstacles which, at least, put limits on their enterprise or, at most, make them go bankrupt. (see The Theory of Constraints – Goldratt).

It is exactly here where the elite´s main and cardinal job stands. The period of time in which the company reacts to an event is of the essence. It is crucial that the company´s elite has a set of skills and competences available that they can apply quickly, creating virtual models of likely situations, such as “our company – market environment“. The models should at least describe reactions towards the close-in market environment first and towards the far-off environment second.

Any late findings and failures to understand an existing “antecedent of turbulence“ is a mistake. This alone, however, is always a source of constraints, often unspecified, placed on the company existence closely followed by an indefinite and undefined set of uncontrolled  and spontaneous changes in the company which are often even disastrous.

Conclusion

A mistake makes a primary source of all company´s problems and most often rests in the following:

  • failure to understand the cardinal role of the company´s elite - which is “never to be a sleeping elite in the turbulent market environment“, for “a sleeping elite is always bound to make the company blind“.
  • failure to understand that a blind company always becomes a slave to a turbulence - for they are controlled by the attractor that generates turbulence. If the attractor is not understood by the elite, then there will be no roads (pre-prepared models) out of the attractor´s reach. It is, therefore, clear that no one but the elite alone is going to lead the firm away from the attractor. And that is the reason why the elite must come into existence, learn (to make models) and work. 
  • failure to understand that unless the elite have a common language, a common mode of speech, common tools of improvement and management, they will not have hope to align themselves on the environment conditions as a team, but rather as a disparate group of individuals (fragmentation of the company). 
  • failure to understand that any company´s success rests primarily in the synergy of brains of its elite.

Vladimír Horáček

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