Middle Management

Middle managers play a major role in the change process. A successful middle manager is the one that uses small amounts of time to accomplish big things. They usually plan well and anticipate whatever is coming on the way. They are effective because they understand what they need to do and at the same time to adjust quickly and proactively when conditions change but unfortunately most of middle managers have never experienced this type of productivity. Most of the cases results suffer due to misdelivery from the middle managers’ team and this kind of situation happen quite often.
Why middle managers often fail?
In today’s ever changing and competitive work environment the middle managers’ task is very complicated and at the same more challenging than the roles of either frontline supervisors or senior executives and they have more direct impact on business results than any other layer of an organization. At the same time we realize that there is no much research on this perspective and at the same time there are few books of training programs targeted to meet the unique needs of middle managers. We realize that most of the businesses due to middle management but still middle managers are extremely important in implementation of deliberate strategy. It is therefore argued that if also organizations continue to conceive of middle-management in purely operational terms, then they may fail to draw on the strategic potential of the middle.
For example Black&Decker has regained the market share with the help of middle managers’ actions. In the end, it represented a high impact that middle management have produced.
What does it take to be a successful middle-manager:
- To be a good project manager
- The enterprise to create an environment that encourages creativity and innovation
- To plan well and to make sure that the priorities are clear
- To communicate the vision of senior executives with passion and clarity.

References:
Balogun, J. (2003) From Blaming the Middle to Harnessing its Potential: Creating Change Intermediaries, British Journal of Management, vol. 14, 69-83.

Huy, N. Q. (2002) Emotional Balancing of Organizational Continuity and Radical Change, Administrative Science Quarterly, 47(1), 31-69.

Westley, F. T. (1990) Middle Managers and Strategy: Micro-Dynamics of Inclusion, Strategic Management Journal, Vol. 11 (5), 337-351.

Lisa Haneberg "High Impact Middle Management"

Start-ups gone Good

Becoming an entrepreneur is to start a business and then the motto shows up : MAKE SOMETHING PEOPLE WANT”. That must be the aim of an entrepreneur-to make the needed product or at least to create that need. Let’s go back in the past and to review the tamagotchi. It was never needed in the market but still this digital pet was sold over 10 million only in 2005. Another thing is do not worry about the money, not that it’s unimportant but sometimes you can create as a non profit organization, sort of charity type. Most of the companies claim to be benevolent but things may change. For example Google seemed like a charity because they didn’t have any ads for almost a year. But the question is how is to create this nonprofit organization successful?! What makes Google so valuable is that they could make people with money to love Google.

Another issue important to a start-up is to choose the right choice. Business is like a compass and the most difficult thing to do is to pick one of the options near another 2000. But how you decide? I guess it must be done whatever best for the users and never for the competition. Think when you bought a product on behalf to hurt someone’s competition. Answer: NEVER.
Being good is the best strategy because it’s like telling the truth and another advantage of being good is that makes other people to help you. If you’re benevolent, people will be around you: investors, customers, other companies and the most crucial-the potential customers.

There are many advantages of launching quickly, but the most important may be that once you have users, the tamagotchi effect kicks in. Once you have users to take care of, you're forced to figure out what will make them happy, and that's actually very valuable information.

Cultural Differences in M&A's

In the last decade many companies on a global basis are 'going international' in order to become global players. The opening of global markets represented a key driver for international mergers and acquisitions. But with this “openness” M&A faced an unusual problem like “cultural differences”.

It is important for any deal that there be good rationale for integrating the businesses. Nevertheless, even if the rationale of a deal is terrific, it can still fall apart due to the cultural differences. Merging a U.S and a European company is actually appears to be a difficult process. The management styles are totally different and people have obviously different views on how to manage a global organization. Even if we take the English speaking countries together like U.K, USA, still their philosophies are so far apart and impossible to reconcile.
At first glance Culture may seem not an important factor because there were no such firms’ collapses upon the culture issue but still the role of culture in mergers and acquisitions (M&A) suggests that cultural differences can create major obstacles to achieving integration benefits.

Basically we know a lot about the financial issues of M&A’s but what do we know about the cultural issues of M&A’s? M&A’s are inherently culturally disruptive and the conflict is guaranteed when we take two already existing groups and smash them together.
According to a KPMG study, "83% of all mergers and acquisitions (M&As) failed to produce any benefit for the shareholders and over half actually destroyed value". Interviews of over 100 senior executives involved in these 700 deals over a two-year period revealed that the overwhelming cause for failure "is the people and the cultural differences".

Robert Gallagher gives an interesting overview which concerns the culture patterns that are inherent to M&A situation.
1) Employee concerns/paranoia about the uncertainty. The questions like: Will you lose your job ? Your bonus? Be assigned to a new boss who hates you? Etc.
2) The “Winners and loosers”- psychological effect
3) The “Cultural isolation effect”- despite areas of cultural alignment between the two management ranks, still there are certain areas to be disconnected that will create a specific tension and anxiety.

Sources:
http://openrangeanthropologist.com/2008/02/11/mergers-and-acquisitions-when-corporate-cultures-collide/
"Harvard Business Review on Mergers and Acquisitions" -Harvard Business School Press

The Product vs The Brand

A brand is much more than a name- it represents a symbol, trademark, logo, term, sign, design or combination which distinguishes a product from others. A product is something that is made in factory but brands are those that are actually purchased by customers. When a customer thinks to buy products like: cigarettes and beer, chances are high that he will search out a particular brand of beer and a particular brand of cigarettes to buy. Even commodities like water have powerful brands as a perfect example is Evian. This brand was selling for 20 percent more than Budweiser and 80 percent more than Coca-Cola. Branding is also something timeless. (Wrigley’s, Coca-Cola etc)

On the global scale, companies are divided into two sides, those who believe that the essence of business success is in the continuing development of superior products and those who believe in branding. The product camp believes that “the brand name doesn’t matter. What counts is how the product performs.” They believe that if the product is no good, the product will fail regardless of whether the product has a good brand name or not. Well if I analyze the Consumer Reports and then check the sales rankings of the brands tested I notice little correlation between quality and branding.

Coke outsells Pepsi. Does Coca-Cola taste better than Pepsi? Yet in taste tests in the US most people prefer the taste of Pepsi.
Sure, some people will give up on some brands. They might even say things like: I would never buy a Jaguar” but frankly these opinions are seldom universal.

References:
The 22 Immutable Laws of Branding by Al Ries and Laura Ries

Fear Sells-Are you Buying?

Nowadays marketing is mainly based on fear. Keeping the people afraid increases the consumption. We try to buy security by purchasing guns, to buy beauty by purchasing different products which combat the cellulite and pimples. Buy Colgate because if you don’t your teeth will be yellow and no one will ever talk to you. All the media, news and commercial focus on fear and this is the strategy that many firms adopt it in order to increase its profitability.

One solution is to stoke fear. Fear is a primal emotion, far older than our ability to calculate trade-offs. And when people are truly scared, they're willing to do almost anything to make that feeling go away; lots of other psychological research supports that. Any burglar alarm salesman will tell you that people buy only after they've been robbed, or after one of their neighbors has been robbed.

Fear definitely helps to sell the products much easier. Technology, Media, news makes the world look scary and horrific. How many things we buy in order to combat something?! From the anti-cellulite crème to the cell-devices that reduce the UVB, we realize that Fear is nothing but something which we don’t know anything about that fear. For example people are afraid of flying and they tend to use cars, but data shows that there is a bigger number of car crashes than the airplanes’ one. We are like in the movie screen and we must understand that if something bad happens in the world not necessarily is true or it will happen with us.

I guess if you want to be innovative, you should come up with a fear and then to create a product in order to combat it.

References:
"Beyond fear" by Bruce Schneier

Cult of Personality in Business

One of the most important assets you can develop for your business is a powerful brand. Branding is simply a more efficient way to sell things. Brands are not just logos, they represent a mixture of who you are, how you are different from the others and why customers will purchase your goods, Developing a brand is much more than picking up colors or some successful drawings. It is also based on sincerity and it should show what you are up to. All the innovations are created by users due to the tight competition which don’t notice any new demands on the market. Many of the users start to create a product for their own use which lately become on demand and transform it into a personalized brand.

Oh Mama! is a product designed specially for the pregnant women which combats the symptoms of sicknesses and many more. It was created by a couple whose the baby was on the way and they felt the need for such products.

While others create products on their behalf, some of the entrepreneurs create products for the others' happiness. For example SongVest is a grup of composers that offer the opportunity for anyone to buy and to have its own song for a low price. It basically offers the possibility for the fans to own a song or to make as a present.

Creativity and usually small businesses interact with the people all the time unlike the big corporations and it helps the enterprise to be updated with the tastes and trends of the specified target of customers. For example the t-shirt company “Threadless” offers the possibility to anyone to send the desired images to be printed on the shirts and weekly these interesting drawings are rewarded and the most important is that the customers remain loyal to the firm.

Creativity is everywhere, from the shirts, to the music, from the foods to hi-tech and the entrepreneurs should create a personalized brand through which to create a large network for the customers’ feedback.

References:

"The 22 Immutable Laws of Branding" by Al Ries and Laura Ries
http://www.threadless.com/
http://www.ohmamabar.com/

Bad Times going Good for start-ups

This weekend the entire American economy suffered another 9/11 which has been the worst financial crisis since the Great Depression. The collapses of the Merill Lynch&C o, Lehman Brothers Inc. and one of the biggest insurance company American International Group (AIG) transformed 15th September as the Black Monday. Of course these headlines slowdown the start-ups of many enterprises but still it shouldn’t be a barrier. Let’s remember that both Bill Gates and many other entrepreneurs didn’t wait for the recession to pass before launching their products on the marker. Same thing did BMW when it increased its popularity during the 30’s crises.

The question is shall we start a small business during a bad economy? The answer I think that if the opportunity is right then anytime is the perfect. Nevertheless while starting a business always comes with risk and these periods of crisis can make a launch even harder but still it also depends on your kind of business. Sometimes it is even possible to find some reduction in costs like rents and people’s wages can be much lower.

Being a small company you feel safer due to the big companies that retire from the world markets and making the competition narrower. However the CPI decreases because people begin to worry about their finances and they will take fewer vacations, will cut back on restaurant meals, entertainment and other luxuries.

Nevertheless the most essential key to a successful business in any economy is to be carefully organized and while big companies don’t take any risks in the recession period, whereas the small start-ups are out reinventing.

sources:
http://finance.yahoo.com/banking-budgeting/article/105785/Worst-Crisis-Since-1930s-With-No-End-Yet-in-Sight
http://www.wisegeek.com/what-is-the-best-way-to-start-a-business-during-an-economic-recession.htm