In the history of the towns, their economies, their markets and their people, they appear with a cyclical regularity that does not stop being intimidating, very difficult situations to face and resolve; periods of recession and general contraction of economic and social dynamics that even disturb solid premises on the capacity and solvency of people and organizations.
The current one is one of those periods, for a good part of the peoples of Latin America, and curiously, I am convinced that its treatment at the business level does not necessarily respond to the effort to find new formulas or to the type of effort that an alchemist would print; Rather, I feel that the answer is found in the renewed understanding of millennial precepts that by their very essence arrive clothed with enormous wisdom.
In the world of business, the first thing that is forgotten today is the understanding of the precise meaning of what business is.
The word Business comes from the Latin word "Negotium" which etymologically means "any activity that generates some kind of utility, interest or benefit for those who practice it."
In its literal sense, the word can be applied to practically everything, even to the simple and natural process of men in the task of feeding themselves, but for Business logic it establishes a profoundly revealing difference.
The Company as an Organization is made up of two types of activities: Those of the Business and those of the structure (or Bureaucracy) that are formed to support the former. In terms of the evolutionary process, the Business activities are the ones that appear first and if it is developed properly, at some point in the process the need to establish a set of support activities arises. Between the two: the activities of the Business and the activities of the Bureaucracy, the existence of the Company must be understood.
This conceptualization first establishes a substantive difference between the words Business and Company: the first may be registered in the second, but the second DOES NOT EXIST without the first, since it can be argued without fear that there is no company that does not incorporate activities that generate some kind of interest or profit. Second, this conceptualization forces us to classify both types of activities in the company.
Normally it should be understood that the only functions that generate profit, interest or profit in the Company are those of Production and Sales. From them, by them and from them the Company obtains utility, interest or profit; all the others that we normally know: accounting, financial, logistics, human resources, systems activities, etc., are activities necessary to support, optimize and maximize the performance of the former. By themselves, all the support or bureaucratic activities do not represent any kind of utility, benefit or benefit to the company.
The essential functions of the Business are therefore Production and Sales (beware! In the latter case, we are not referring to Marketing or Marketing). And if we understand that today it must be assumed that nothing is produced that is presumed not to be sold, Sales activities prevail over Production activities.
It is usual that in situations of certain normality (because Normal is never a parameter of business development), business organizations have difficulties in orienting themselves properly towards the functions of the Business. Often it is "covered" with a fatty layer that forms the Bureaucracy in its support activities. From there derive problems essentially related to competitive capacity.
As can be deduced, the phenomenon is much more frequent depending on the size of the company. There are some who, due to their inappropriate «gigantism», even ask themselves: What is our business? or what business are we in? And far from feeling scandalized by such nonsense, many thinkers in the business world (we will not say about the business world and we will assume that they do so precisely because they are still in many cases only "thinkers"), suggest complex processes for these misfits of the business world. business universe, discover! your own business. The case that best suits me is that of the famous Strategic Planning that begins its process by suggesting that companies define their Mission, asking what business are we in?
I firmly believe that if the company has reached the point of deeply wondering this, it will surely need much more than these famous recipes to find its north.
The Business will always be made up of the Production and Sales activities and the Mission of every company, in the understanding of its Final Purpose, must always be the Business itself. I do not understand, in practice, any other type of final purpose that represents utility, interest or benefit.
If in certain normal situations, ignorance of the Business or its inappropriate treatment represents a detriment to the Companies, it is easy to deduce that this is exacerbated when the situations that must be faced are markedly adverse or difficult. To successfully face these situations, the only thing that is advisable is to gravitate all the company's activities around those of the Business. Now, this is easier said than done because "bureaucratic interests" take deep roots in business, govern numerous media and balances of power, generate culture (which is the saddest thing).
The recipe applied by a company in unfavorable cycles or in periods of crisis, based on its "bureaucratic interests" and far from the essence of its own Business, is not unknown: structured pressure to meet goals, obsessive planning, meticulous control, staff turnover, the pseudo-fascist "get it or die" stimulus, and the famous and repeated cost and expense adjustments.
And in unfavorable cycles none of this works well: structured pressure usually ends up being pressure from "bureaucratic interests" on Business activities, in many cases without the necessary proportion or support of means; obsessive planning ends up showing that in unfavorable cycles the least reliable is the plan given the power of changing and unknown environmental conditions; the meticulous control ends up mutilating the necessary dynamics of the business functions; staff turnover ends up proving to the Bureaucracy that "magicians" don't exist; the encouragement to "get it or die" ends up getting the second more than the first and the repeated and successive adjustments of expenses and costs initiate the vicious circle in which the ends become disproportionate to the means.
In critical situations, companies must Focus on the Business and its two essential functions: Production and Sales. The structured pressure must start from these two functions towards the rest of the company, the goals that must be met first are those of production and sales, not essentially those of growth, costs, financial, logistics, etc., ALL They produce and ALL sell because only in these two functions are income, profits, profit and profit generated.
The Plan must be replaced by the strategy because the latter (we will see it later) is essentially the governance dynamics of the Business. The Control must be solely of Results, the process MUST have a professional management that does not have to be supported by the secant control. Personnel Turnover is the most unfavorable for the Business in adverse situations and should be limited to the Rational scope of performance evaluation, with an extraordinarily intense ingredient of Training. The Incentives must be Positive for the staff, conditioning personal income to the fulfillment of goals. Please! NOBODY produces or sells well out of fear, NOBODY recognizes fear, it is endured, controlled, but it does not deserve recognition; and the Business is extremely sensitive to this.
And finally, YES to cost and spending cuts, but those linked to the Bureaucracy, as far as possible. In critical times, the support structures in companies must be completely light, every task must be focused on the Business, every person, every process, every Decision. It is necessary to "remove" from the company the tasks, processes and people that do not represent added value for the Business, here yes, without fear: if the secretary does not sell, a secretary is not needed, if the secretary fulfills orders from her boss who does not they add value to production or sales, then their boss is not needed.
That old premise of no way !, "there are things to do" is not medication that works in crises, because "those things to do" are a reflection that the Business is going well, because it is the only one that generates, and if the business is doing well then this reading could have been saved.
The latter is a bit like the obesity story: they say that obesity is not a problem for the poor. Either it is from prosperity or it is already a health problem. If a company is obese, it probably had a prosperous business that allowed it to transform… or it is a sick company. If it is the former, it will be seen how long she stays like this before the greater competitiveness of her opponents forces her to go back to a regime. If you are sick it is because your Business is sick and here probably not only the regimen will work and it is necessary to diagnose in greater depth.
This sensitive equation of prosperity linked to the Business is under the governance of strategy. The Strategy is essentially the fundamental concept of Business direction. The term Strategy should not be directed at anything that is not of interest to the Business. Unfortunately this is a term that has become too corrupted, to the point that today anyone can make a different interpretation of it and for this reason it is one of the most difficult concepts to grasp.
The term Strategy comes from the Greek word "Strategos" which etymologically means General or Commander. The military lexicon, which must rightly claim paternity over the business lexicon we use now, says of Strategy: «Art of directing military operations. Art of distributing and making the military means act to reach the political means. Dialectic of wills, using force, to settle conflicts ».
Pues bien, yo creo que aquí se dice todo con precisión y con justicia: en primer lugar es un arte y no una ciencia y como tal una Virtud o Disposición para hacer algo. Astucia, maña, habilidad, destreza. En segundo lugar la Estrategia se define con un arte de Dirección, no exclusivamente de Planificación como suele interpretarse habitualmente (hay enorme distancia entre el concepto de planificación y el de dirección). En tercer lugar nos remite a operaciones militares, que por esencia tienen características muy propias: sentido confrontacional, orientación al combate y a vencer a un enemigo, grados de máxima intensidad para quienes participan en ellas, enfoque al cumplimiento de la misión, sentido de orientación común entre los individuos, percepción de corto y no de largo plazo, etc. En cuarto lugar nos aclara que la estrategia es un medio para conseguir fines de política, en este sentido no es el comienzo y el fin en sí misma, se subordina a intereses mayores. En quinto lugar (y tal vez lo más importante) da a entender claramente que involucra una dialéctica de voluntades y en ello incorpora de hecho al Individuo (al Strategos), no se cosifica en sí misma. Y en sexto y último lugar precisa con claridad que está orientada al empleo de la fuerza para dirimir conflictos.
All of the above, transferred to the business world, is adjusted solely and exclusively to the Business. Only in it are all these peculiarities summarized: Conflict (due to market situations), competitiveness, opponent, confrontation, intensity, dialectic of wills, etc.
And among the Business functions, mainly the Sales function, the one that even defines what will be produced. That is why I affirm that the Strategy in its purest sense is solely and exclusively the Sales Strategy. From her, by her and for her, everything else must be established. No more Financial Strategies because the term exceeds the scope of the need posed by the object, no more Human Resource Strategies because they "are part of, they are not objects of", no more Marketing Strategies because Marketing is defined by the need posed by the objectives and the Sales programs, the latter condition the Marketing because it is nothing more than a set of techniques developed to support them, no longer Strategic Planning because the Strategy does not start or end in the Plan,no more Strategic Management because Strategy is a way of managing itself.
If something needs to be simplified, then Strategy is nothing more (and of course nothing less) than the role of the Strategos, the General, the Commander, the Manager. Those who, focused on the Business, must direct their functions, in a dialectic of wills with their opponents, to resolve the conflict in their favor.
If our conclusion establishes that the Strategy is only the function of the Strategos then the emphasis to better understand things should go from the abstraction to define the Strategy to the practice of knowing who the Strategos is and how the Strategos should be.
In this way we arrive at the origin of all our concerns: the Individual and the way to form, prepare and train them.
Strategos and Negotium, two concepts as old as adversity itself. Much still to be understood about the first (because he is an individual in his absolute complexity) and much to do about the second because there are the answers to our current urgent needs.
