The Hindu Business Line : Stress on innovative management practice

Addressing students of the Sreenivasa Engineering and Management Institution, Chittoor, as part of the Business Line Club lecture series, Mr P. Raju Iyer, Chairman of the Coaching Committee of SIRC of ICWAI, detailed the five forces of the new economy, the characteristics of new models and the winning competencies of strong managers in the current business environment.

Mr Iyer, a practising Cost Accountant, highlighted the requirements of strong managers through questions such as ‘What is vision, mission, strategy and plans’. While indicating that “strong performance is enhanced by organisation values, functional competencies and behavioural competencies,” the need for innovation in management practices was necessary to survive and succeed, he said. While a basic education such as an MBA or Chartered Accountancy provided entry into the corporate world, one had to gain experience and master the technical details in order to become a professional expert, he said.

‘Strategy’ could be used to find a match between resources and opportunities in the environment; it could be a means to achieve competitive advantage; and a mechanism to cope with a turbulent environment. A good strategy was one that fit the environment.

He spoke about the profitability drivers, functional competency and how the differentiation strategy should be employed. Indicating the difference between cost reduction and cost control, marketing and sales, value engineering, value analysis and value chain, he emphasised the need for continuous improvement – kaizen.

Successful business strategy is about actively shaping the game you play and not just playing the game you may find, he said.

The key was not to anticipate the future, but to create the future. The significance of flexibility was explained with the example of German Mittlestand, the constellation of small and medium-sized family-owned businesses that fuel the German economy and its exports – characterised by greater innovativeness, rapid decision-making and openness to change.

Further, Mr Iyer spoke about how Howard Schultz opened the first Starbucks café in 1986 when the coffee industry in the US was dominated by major players P&G, General Foods and Nestle.

It went on to become a $1-billion company by 1994, by adopting a different strategy of focusing on upwardly mobile white-collar workers. It opened cafes that were close to its customers’ places and offered high quality coffee with more expensive Arabica beans. He emphasised the importance of communication, how creativity went beyond accepted ideas, and the importance of finding new opportunities and products before the competitor did. He also spoke of the advantages of multi-tasking and multi-skilling in the present competitive environment to improve value-added performance.

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