My Image of a Well-Managed Company.

Corporate management is different than corporate leadership.

The job of top management is, like the captain of a ship, to set the long-term direction of the company. In order to do this, management takes input from the perspective of sales (customers, competitors), marketing, manufacturing, legal, IT, emerging technology and trends, economic indicators, etc., to determine the company’s medium and long-term goals, and a make a plan on how to get there.

Management should ask:

How should we revise our existing products and business to meet customer expectations?(Cheaper? Faster? Better?)
Where should we focus our R&D?What new products should we develop and what products will become obsolete?
What corporate structure will we need to support the changes over time?
What cultural or political obstacles need to be overcome?
Do we need to hire, develop, or retire any expertise?
How time-critical are the changes?
What education, training, or personal development will need to occur? What policies and procedures need to be developed, and who will do this?
What particular strengths or expertise does our company have which gives us a competitive advantage, and how can we capitalize on those?
What are the cashflow implications of the upcoming changes, and how will they affect operations within other areas of the company?

Based on the answers to these questions,

Management can set a direction for the company and develop a plan on how to get there.

If top management spends their time doing the daily fire-fighting and decision making, I believe it is because of either a lack of procedures, policies, and effective/trustworthy middle management, or a lack of fundamental understanding of how to run a company. In addition to wasting time re-answering the same questions day after day, poorly-run companies will not have the time to focus on the long-term vision for the company.

Middle Management’s job is to monitor and improve performance within the department, to maintain maximum productivity and efficiency, and to do the day-to-day decision making to ensure that their department is operating as effectively as possible. This includes monitoring for technological advancements and changes in industry best practices and standards. They will then plan and implement appropriate changes in order to increase department effectiveness. Middle management is also responsible to implement structural and other changes in order to align their respective department to meet the company’s medium- and long-term goals.

A well-run company will have a culture that seeks continuous improvement.

Can we redesign a product to be more versatile? Can a product be redesigned for simpler production? Can the company’s cost-accounting process be changed for better cost forecasting on future jobs? These aren’t just questions asked by management, but throughout an effective organization.

In summary,