Back to the Basics of Business: The Importance of Effective Management and Value Creation
-On this edition of Your American Story Radio, Raja, himself a successful entrepreneur, tips his cap to other successful business owners in the listening audience by featuring two nationally-renowned experts in the fields of management and value creation.
-Managing people, systems, and growth in a business can be one of, if not THE most difficult tasks an owner can face in a business. It’s a true “sink or swim” scenario, as you can mismanage your way to failure just as quickly and easily (if not more so) as you can manage your way to success.
But how can you tell if either your managerial skills, or those of the people you hire to manage your company, are the skills that are necessary for your particular company to succeed?
Few people in the world are as qualified to answer that questions as Henry Mintzberg, the Cleghorn Professor of Management Studies at the Desautels Faculty of Management at McGill University in Montreal. A longtime name on the list of the Top 50 Most Influential Management Gurus presented by the Harvard Business Review, Henry is the author of over 15 books on management, and is a leading proponent of the concept of emergent strategy, the idea that the most effective strategies for a business start from within the lower and mid-levels of the business (the folks in the trenches), rather than those imposed by the company’s management, without input from those underneath.
Here, Henry talks with Raja about what makes an effective manager, where the most effective managers come from, the type of person you should NOT put in any form of management position, and why the MBA tends to be overrated.
(And the last idea is coming from a PROFESSOR!!!)
-So once you have effective management in place in your business, now comes the tasks at hand, and one of the most important processes facing any company at any point, from inception to full growth, is the process of creating value in your business.
Business value is a metric that should be the most analyzed, and questioned, in your business. And the question, on paper, is a simple yes/no proposition: Will this (task, process, project, employee, etc.) create value for the company? If the answer is “yes”, then how much value is it creating, and what can be done to increase that value? And if the answer is “no”, then how should it be tweaked, augmented, or removed, in order for value creation to take place?
It’s a tricky concept on many levels, but also one of the fundamental ideas you need to know for your business to succeed. Here, we hope to clear things up a bit, as Raja talks with Dr. Kenneth Lehn, the Samuel A McCullough Professor of Finance at the Katz Graduate School of Business at the University of Pittsburgh. Value creation is Dr. Lehn’s specialty, as he has done extensive research into the trends that drive value creation historically in business, and how value creation impacts the overall operation of businesses, both large and small.