Business — Banking — Management — Marketing & Sales

Management qualifications / succession

Category: Corporate Banking

1. Qualifications of the management

The qualifications of a companies management team are of paramount importance to the survival and long-term success of any business. Surveys among those German small and medium-sized companies, which have failed to survive, have shown that in most cases management failure was one of the key reasons for their collapse. The assessment of the management team entrusted with the responsibility of operating the business is one of the key judgments to be made.

The management team must have the professional and personal qualifications that are required to lead a company. The bank should know about the managers training, experience and professional background. The managers should periodically update their knowledge, e.g. by attending seminars (it is even better if they lecture at seminars). Technical and commercial expertise should be well balanced within the management team.

As has been shown in the paragraphs which discussed the product life cycle and portfolio planning, the different stages and challenges in the life of a company require different types of management Developing a new product calls for the creative engineer. Surviving as a low cost producer in a mass market may demand a more accountant-like type of manager or marketing specialists.

2. Organizational structure of the company

Account managers should always ask for their corporate clients organizational chart. If there is none, one has reason to wonder if the management team has ever thought about the hierarchies, structures, work flows, and business processes of its company.

If there is an organizational chart, one should examine what happens when a customer places an order. How is this order processed within the organization? Which ways does it travel inside the organizational chart? How many different levels of hierarchy are involved in fulfilling this customers requirements? Does every single one of them add significant value, or do they waste time and money? How long does it take until the customer gets what he wants? What is the best practice in the industry?

Some information can be obtained by a single glance at the organizational chart. How many layers of hierarchy does a company have? There are firms with flat hierarchies and others with bloated bureaucracies. The chart displays if there are departments that are responsible for strategic and financial planning, or for quality management. It could be a warning sign if such departments are not found on the organizational chart.

3. Succession Planning

Many small and medium-sized companies are fully dependent on their managing director, who often is the owner (or one of the owners) of the company. These firms would get into deep trouble if their managing director could no longer work for them, e.g. because he was injured or killed in a traffic accident. Would the company survive without his product development skills or his personal contacts? Arrangements should have been made for a well-planned qualified succession — just in case something happens.

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