Well, I haven’t done MBA, so I don’t know whether this has already been defined or not. But having a business acumen and having a degree are two different things altogether. And it is not necessary that business acumen should be the sole property of businessmen, the top management of any company must also possess the skill. To top it all, this skill doesn’t come overnight, it has to be nurtured over years (in case it is not inborn). That said, let me directly jump to a real-life example in order to explain the difference between the two types of management I’m discussing today.
In one company I know, the performance linked incentives were given out every month. It was a dynamic business environment and hence, every month, the management had the right to change the performance metrics/targets depending upon the need of the hour. For many months, the attendance had not been a concern and hence, it was not one of the performance metrics for the employees. Diwali was approaching and as it happens in most of the companies in India, the leave applications had started trickling in, some even two months in advance, and increasing steadily. As was declared earlier, last-minute leave requests were going to be rejected. But point to be noted, milord, attendance was not a performance metric for that month. Effect: 70% absenteeism on the floor during the festival.
Now, lets talk money. For that month, the company lost a lot of business because there was not enough manpower to support it. Company lost some more money because the performance metrics defined for that month could be achieved by some employees “irrespective of their attendance”. So, they earned money in incentives even when they were absent for almost half the month!
NOTE: In this case, there was lack of Predictive Management.
The story doesn’t end here. The next month, based upon their recent harrowing experience, the management decided to include attendance as a performance metric. Result? Most of the employees had already taken a leave during the Diwali festival. So, do they need any leaves the next month as well? NO!
Now lets talk money again. The company lost even more money because the next month, nobody took any leave and everybody earned incentive for their attendance.
NOTE: This is an example of Post-Mortem Management.
Oh, and did I forget to mention, the functional head over there was Six Sigma Black Belt Certified and the total employee strength was more than 2000? Oh, my bad!
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- Blog Post: Does your embedded development team’s project budget metric support in your estimation process? (e2e.ti.com)
- Performance Metrics (theatlantic.com)
- Just The Facts, Ma’am (customerthink.com)
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