Business consultant Kevin Vincent answers questions from business owners about specific issues facing their daily operations.
Q: Dear Kevin, I am a small business owner with one central office in a main city of New Zealand and I want to consider decentralisation as a way to improve performance and profitability. What advice do you have for me as I consider this?
A: Decentralisation was quite fashionable in the late 70s and has remained on agendas ever since.
I believe the intent with any decentralisation is to separate a business into smaller units capable of becoming profit centres.
A move to this will require some careful analysis. The analysis should consider foresight planning, forward objectives, company strengths and weaknesses, chances and risks along with a full analysis of projected cash flow.
In a 2009 article, The Economist cites decentralisation as “The process of distributing power away from the centre of an organisation”. In doing this, you need to carefully reflect on how much power should be decentralised, how much empowerment to your colleagues you will employ in your decentralised operations.
Tom Peters said in the mid 1990s that, after watching organisations thrive and then shrivel, “Decentralisation is at the top of the list. To loosen the reins, to allow a thousand flowers to bloom and a hundred schools to contend, is the best way to sustain vigour in perilous times.”
Well planned and structured decentralisation will encourage innovation and entrepreneurship within your company and ultimately lead to improved profitability.
Q: Dear Kevin, our company talks a lot about ethics, can you please advise how this relates to business?
A: For me, ethics are how we act to each other; being good, trustworthy, reliable, fair and empathetic.
I don’t know of any sets of rules on business ethics, but I am aware of how important they have become in our life. Ethics are generally subjective and mostly about morality.
In his 2003 book Management—Tasks, Responsibilities and Practices, Peter Drucker said, “The first responsibility of a professional was spelled out clearly, 2,500 years ago, in the Hippocratic oath of the Greek Physician: primum non nocere—‘Above all, not knowingly to do harm’.”
I believe Drucker is saying clearly to us all that we have responsibilities to carefully reflect on our proposed actions, to contemplate our words and how we articulate those words and to ensure we personally uphold appropriate behaviours that set an example to our colleagues and all those we relate to in our work and in our communities.
Ethics in business and social responsibility are often linked as social responsibility and this is a significant aspect of the discipline of operating ethically.
I believe that just as health and safety is a responsibility for all staff members, so must be operating with ethics. It isn’t just the company owners, or the board of directors, or just the manager—it is every single individual who is responsible for our own actions.
For all stakeholders, this means consideration must be given to how we interact with each other and embracing our rich diversity, not accepting credit for what may have been done by others, maintaining confidentiality, and telling only the truth (my recipe for successful selling).
Finally, being ethical at work or in your business is a continuum and must be part of our everyday lives. It is never OK for a business to be unethical.