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The library of essays of Proakatemia

Principles of Management

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In ‘Good to Great’ Jim Collins introduces seven principles of management that can bring companies to the top. Collins looked into the stock market of several companies and observed why some of them were very successful and managed to keep their level of success for a very long time.

His first management principle is that you need the right manager to surpass your competition. He says the manager should be humble, energetic, emphatic and ambitious.

The second principle is to hire the right people first and then form a vision, strategy and structure. According to Collins the employee motivation will come by itself.

Thirdly, Collins says leaders should not avoid tough situations and they should lead by asking questions and instead of providing answers.

As a fourth principle, he says that complex processes should be reduced to a single core element.

Principle five is discipline and six is not to rely heavily on technology. He claims that technology cannot bring a company to the top and should only be utilised once some degree of success is established already. His seventh principle relies on exactly that. He claims small changes are more useful than big announcements and quick changes. Technology should be introduced slowly to enable the company to expand and grow.

Collins has some good points in his book. It makes sense for companies to have capable managers who possess the qualities her describes. This is something that especially startups should consider because a bad manager usually means low morale amongst employees and inefficient handling of projects. I also like that he says tough situations are not necessarily a bad thing and the style of leading by asking questions might be appreciated by employees because they feel included.

However, many of his principles are outdated and do not make sense in today world. This may not be exclusively Collins’ fault since he published his book nearly 20 years ago in 2001. It is obvious that time changes, but his principles did not withstand those changes. What I found interesting was that many of the companies he named as examples for success are not nearly as successful today.

I found it strange of him to assume that employee motivation will just come naturally even if the company has not strategy or vision yet. He practically asks his employees to blindly follow management. I do believe it is much more useful to convince employees of your vision and provide them with a great work environment.

His fourth principle sounds great in theory, but it might not be something that can be done in practice. Processes are increasingly complex nowadays and reducing them too much might leave out crucial details and hurt the company. It is good to leave out unnecessary steps but too much of this will be harmful in the long run.

What absolutely does not work anymore today is to minimise technology. Many startups rely on this as their principle competitive advantage and even companies that are not in the tech field cannot survive without any technology anymore. This is one of the first steps to success for companies in today world and it cannot and should not be delayed until the company is already successful. However, I think there is still some truth to his seventh principle today. Small changes can help everyone in a company to adjust better and it might also be preferred by clients. It is most likely cheaper and can be reversed more easily if the change is unsuccessful. Big changes should only be made if a company truly struggles in everything they do and the change is a sort of last resort action.

In conclusion, while some of Collins’ principles are still applicable today and should be considered by startups and established companies alike, most principles are outdated and do not work anymore in todays world. The book is insightful but should not be taken too literally but more as a general guideline.

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