In today’s fast-paced business world, it is vital for companies to experience growth through future developments. To accomplish this task, it is imperative to implement innovative ideas and maintain a level of resiliency, in order to foster a productive organizational culture. As easy as this may seem, only well-formulated and interlinked companies can successfully achieve this state of continual improvements. Often the growth process itself can cause an enormous amount of upheaval from within the organizational culture, if it is not approached in a delicate and well thought through manner. With that being said, it is absolutely necessary for an organization to maintain strong leadership, team vitality, open lines of communication and efficient organizational behavior, to ensure a successful future.
Quality leadership is integral to an organizations success . Despite the varying products and services , it all comes down to how to generate growth and run an organization efficiently. As simple as this may sound, the high risks and difficulties involved in coordinating the efforts of a large group of people can be daunting. The imperativeness of a CEO and/or CFO to have the ability “to motivate and guide people toward a goal [because that] is the essence of leadership” is critical.
Apple & Sony:
When looking at Apple Inc. and Sony Corp. at different points of their histories, the CEOs were failing to generate organizational growth. As the profit margins began to slump, both companies were quick to introduce new CEOs, in an effort to swiftly resolve the problem. Fortunately, for both of these companies the organizational culture and productivity began to improve due to the CEOs’ strong leadership skills. In these two instances, both CEO’s restored the organization’s cohesion and re-emphasized the manager roles to achieve a more productive environment.
Pepsi & Google:
The value of these management traits are demonstrated by two companies: Google and Pepsi. Google demonstrates how the founders of Google had the foresight to launch its IPO in a Dutch auction format (Choo, 2005). The Dutch auction enabled Google to raise more money with its IPO; save money in underwriting fees; and maintain its corporate culture (Choo, 2005). This savings enabled Google to cover the extreme costs associated with complying with the Sarbanes-Oxley Act.
Pepsi’s emergence from a bleak business outlook in 1996 to gain a brief lead in market share in 2004 is a testament to the foresight and anticipation of Pepsi management (Things, 2005). Pepsi demonstrated this by focusing on the future. Pepsi wisely de-emphasized the markets that Coca-Cola had a stranglehold on, and searched for emerging markets (Byrne, 2000). Pepsi successfully anticipated the changing consumer tastes and accounted for this by focusing on snack foods and sports drinks as opposed to the sugar-filled soda market. Ultimately, this anticipation paid off for Pepsi.
Genentech is regarded as one of the best companies to work for and have found that a strong vision and knowledgeable key players where at the core of their success. According to McShane (2005), knowledge of the business is a key component of successful leadership. In order to battle these issues Genentech enacted solutions to these obstacles that led to the companies fulfilling their visions. Knowledge of the business is a key component of a successful leader (McShane, 2005). Genentech took the approach of finding the best suited leaders for their executive positions in which the CEO Robert Swanson moved into the Chairman position and was replaced by Kirk G. Raab whose expertise was sales and marketing (Windover, 2000). Genentech achieved double and almost triple earnings in the next several years due to the aggressive marketing tactics used by Raab (Windover, 2000). Although these aggressive marketing tactics were successful in generating high earnings they resulted in an investigation by the FDA in which Raab was replaced by Arthur D. Levinson whose background in research was more suited for the current company climate. Genentech was able to realize the company’s climate change and make adjustments quickly to attain their immediate goals.
The triple bottom line philosophy in which a company manages to balance their economic, social, and environmental goals is a very important component for success (McShane, 2005). Abbott created a more socially responsible organization by developing a core set of values that include pioneering, achieving, caring, and enduring (Abbott, 2007). These values were developed by approximately 14,000 employees during their goal setting process. Abbot initiated training programs and workshops on how to incorporate their values into daily activities making the values espoused within the organization and not just enacted (McShane, 2005). They also included these values in the 2007 goal performance goal setting activities.
Abbott took the dedication to developing a triple bottom line philosophy a bit further when they also communicated to their suppliers their vision of appropriate labor practices, ethical behavior, environmental stewardship, and health and safety practices (Abbott, 2007). This vision has helped Abbott donate 300 million dollars in grants and products to disadvantaged patients, free medications for patient assistance programs, providing low-cost vaccines for malaria, and causes to help prevent the spread of the AIDS virus as well as help kids with diabetes.
Proctor & Gamble and General Electric:
Establishing a culture of innovation requires a great deal of effort yet Proctor & Gamble and General Electric have achieved this. “Innovation is all about making things that people want to buy” (Brunner, 2001). These two firms CEO’s have established an attitude of continuous growth in their efforts to achieve organizational goals. This attitude keeps new ideas flowing and revitalizes the company. Proctor and Gamble has created an Innovation Leadership Team to fund and speed up the innovation process, while GE is investing in emerging fields and products with the potential to faster growth. Gene One’s vision is to have an innovative culture, but only when the leaders of an organization are keeping up with the shifts and needs of the markets can there be success.
The CEO’s from these two organizations are transformational leaders because “they develop a vision for the organization or work unit, inspire and collectively bond employees to that vision, and give them a “can do” attitude that makes the vision achievable.” (McShane & Glinow, 2005). Gene One’s CEO must also do this if he is to achieve his goal of changing the organization to an IPO. He must develop a sense of urgency, embrace new ways of doing things, persist when things get rough and shape a new and supportive culture. (Bolman & Deal, 2003). He must also “energize and direct his employees to a new set of corporate values and behaviors.” (McShane & Glinow, 2005).
To be innovative in an organization there must be a vision and strategy for innovation, a culture that supports innovation, processes, practices and systems supporting innovation and employees must be given the chance to participate in the process.
The information provided here is intended to help you understand the general issue and does not constitute any tax, investment, financial/accounting, medical, or legal advice. Consult your accounting, financial, tax, medical, or legal advisor regarding your own unique situation.
CoAuthor: Jason Bloom, CFO, et al, Jupiter, Palm Beach Gardens, and the Palm Beaches