Military Principles Of Business – Actions And Enablers

While the process of business should not be compared to warfare, there are some analogies with military action which are similar and relate to the principles that underpin the conduct of successful business.

Successful military action derives from the application of a number of specific principles, amongst which Selection and Maintenance of Aim , Maintenance of Morale, Offensive Action, Surprise and Economy of Effort , are perhaps the most notable. While “the Selection and Maintenance of the Aim” is considered fundamental to successful military action to support a political objective, its achievement is dependent on a combination of the other principles. Although most of these principles are specific to military action, there are some that apply equally to business activity.

In business, the principle of “Selection and Maintenance of the Aim,” is reflected in the task of producing and maximizing profitable income to support the objective of the corporate plan. The head of corporate income is responsible for producing and maximizing profitable income for the long term future of a business, which requires the successful management of many activities. However, it would appear that if those activities are to be managed, integrated and organized successfully, then they have to be governed by some underlying business principles.

 

The only purpose of any business is to make money; there is no other reason for its existence. Even “Not for Profit” enterprises have to make a profit for necessary re-investment, even though they do not distribute that profit to shareholders. But businesses whether large or small are created by people for people, regardless of whether the business is consumer or industrially related.

While the “marketing press” tends to suggest that business success is derived from brands, advertising, and customer relationship management, etc, these elements although important, do not in themselves produce income. Businesses make money initially for the benefit of those who set up and invest in the enterprise. However, making money also benefits the employees, without whom the business could not exist. Money is made by business organizations anticipating and satisfying customer demands profitably, which benefits the shareholder and the employee, but also the customer. Customers need businesses to be profitable in order that through re-investment and development, they continue to be a reliable source of supply. For the same reason, businesses have a responsibility and interest in the profitability of their suppliers. Actions which adversely effect the profitability of suppliers, may undermine their long term viability as a reliable source of supply, to the detriment of the business supply chain.

The most important assets of any business are people, be they shareholders, employees or customers, and they all need to benefit from the enterprise. Entrepreneurs   recognise business opportunities, while shareholders produce finance.  Employees quantify a need, produce a solution, and communicate with a market. But above all, it is the employees that sell the product or service, and satisfy customer requirements to produce the profit. People are the primary asset for every business because they retain knowledge and experience that is essential for the organization’s continuance and development. When businesses lose staff they lose the assets of knowledge, expertise and experience which is difficult to replace.

What then are the underlying business principles that should guide the executive responsible for business income?

* Maintain the aim –    Business has one aim only, which is to make a profit. For the head of business income, the aim is   to maximize profitable income.

*  Plan carefully.      Successful business planning requires quantified objectives, scheduled targets, scheduled actions, and a contingency action plan.

* Secure Resources   Ensure there is sufficient finance, materials and qualified staff, to anticipate and satisfy customer requirements profitably.

* Communicate           Ensure that plans and resources are communicated to staff.

* Economy of effort     Constantly evaluate progress to maximize the return and minimize the use of assets and investment.

Underpinning all these is the principle of “Morale and Motivation”.

* Morale and Motivation. – Regardless of business objectives, resources and planning, it is only people who ultimately can turn a business idea into a profit making enterprise. Maintaining their morale and motivation is therefore essential for the success of any business.

While “Maintaining the aim” to make profit remains fundamental for business success, of all underlying business principles, the maintenance of “moral and motivation” is the one enabling principle without which the others cannot function. For managers of business income, motivating staff to be creative, innovative, adaptable, and hard working in order to anticipate and satisfy customer requirements profitably, is a primary key to business success and maximizing profitable income.

© N.C.Watkis, Contract Marketing Service 24 Sep 12

Contract Marketing Service, (Profit Development Specialists)

 

October 4, 2012  Tags: , , , , , , , , , , , , ,   Posted in: business development, business efficiency, Business Marketing, business performance improvement, business performance indicators, business performance management, business performance measurement, marketing management, marketing metrics, marketing performance measurement, performance management, performance measurement indicators

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