The 6 Guiding Principles of Business Management

We live in a world that is becoming increasingly competitive. Gone are the days of fat profit margins which masked our inefficiencies. Although technological improvements are necessary, they are no longer sufficient to retain a competitive advantage. In this competitive world, the culture of an enterprise has become the differentiator between winners and the also rans.

Here are 6 guiding principles that high performance enterprises adopt to survive and prosper in the 21st century. They evolved from the teachings of Dr. W. Edwards Deming. As you read them, keep in mind that many of them have become buzzwords; but familiarity is not same as understanding; implementation is not same as merely ‘knowing’. Reflect on how well these guiding principles are institutionalized in your enterprise:

1. Salaries are paid by satisfied customers
2. Results come from processes
3. Continually improve processes
4. Manage with facts, not opinions
5. Management must establish priorities
6. Involve everyone through teamwork

These guiding principles form the core of a culture that helps businesses retain and expand their base of satisfied customers. Prosperity follows.

The First Principle of Business Management

Salaries are paid by satisfied customers

Imagine that you want your organization to stay in business forever. Who is going to keep your business profitable now and in the future? Your hard working and loyal employees are not enough. Only satisfied customers can sustain your enterprise. Customers, in most cases, will not be satisfied if you offer same products as you have in the past. The marketplace is changing and customers’ expectations are changing with it. Customers always expect better and improved products.

Management needs to create an environment where a very high priority is given to improvements to products and services. All employees need to recognize that customer satisfaction is the preeminent goal of the organization. We need to remember that dissatisfied customers will be paying the salaries of our competitors, not ours. (The modules on the Anaar Strategy Integration Process and Product Development Process deal with this topic).

Introspect:

• What do your employees believe (Remember that one’s beliefs influence one’s behavior)? Do they believe that their salaries and pay increases come from their bosses? Traditionally, department managers were viewed as kings of their kingdom. You view your boss as your customer; try to please your boss; try to look good to your boss; defend and support your boss in meetings, even if you KNOW that that position adversely affects customer satisfaction. Or, do your employees believe that salaries are, in fact, paid by satisfied customers, and therefore, focus their attention on issues that are affecting product quality, delivery and cost? Do they report problems they see to their superiors, even if these problems reflect adversely on their work; suggest solutions even if their workload increases?

• How do your managers think? Does their mindset imply self-preservation? “My department should look the best in the eyes of my superiors. My career depends on it. I better meet my departmental goals; stay within my budget since budgets are sacrosanct. The problems my people see in my department are my business and therefore, there is no need to share them with others. Let other departments take care of their problems. I don’t want to be bothered by their problems.” Or, do they think “Let me help the other departments even if I go slightly over my budget, because, if they succeed, customer satisfaction would improve and company profits would be better. It might look like I went over my budget, but collectively, we come out ahead.”

More on ‘Results come from processes’ in my future posts.

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J. Nirdosh Reddy

Founder at Anaar

We at Anaar are now entering a new phase with the launch of our process management digital tool - the APRS Platform. It is designed to help improve profitability and excellence through better alignment and accountability at all levels within an enterprise.

We are looking to connect with Small and Medium Enterprises (SMEs) as well as Value Added Reseller Partners.

Over the past 30 years, it has been a great privilege to work with over 100 businesses in over 10 countries in such diverse fields as manufacturing, engineering, textiles, chemicals, information and communication technology, government agencies and banking.

Latest posts by J. Nirdosh Reddy (see all)

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