Entrepreneurship — A Functional Controlling Perspective
First, a disclaimer: All propitiatory terms and technologies spoken of in this article are owned, marketed and operated by their respective owners. I own no rights to their content whatsoever.
Let me first lay forth an approach to aspects related to a company (any company in general) and how I visualize them as far as “function” is concerned. As with my usual posts, this one too builds on one idea after another until eventually we have a holistic picture. And then, we can try to see how what is applicable where. We begin by establishing a basis for “social sense” within the scope of what it means to be an entrepreneur, followed by a discussion on current IT integration technologies and finally on predictive analytics. In conclusion, I discuss the most important element (i.e. people) which I believe we are missing in our efforts towards our advancements.
After working on three continents, I have understood that there are only about two ways companies can go making profits — either they concentrate on “profits to be had” and give much less consideration to everything else that is required for us to reach those goals. Or, the company can organically approach the goals, keeping everyone connected with the journey on-board and will eventually make profits by their sheer combined hard work, strength, discipline and courage.
I like to believe that markets in general are highly competitive, albeit to varying degrees, depending on the product in question. What we often overlook, however, is that they are also highly connected. Competition and connection are good things, in my opinion. Competition breeds talent and those with true talent win. However, that is not entirely the whole story. We all know of at least some companies where they don’t simply win by talent and hard work alone. This is where connectivity becomes important. I tend to think this is essential, especially to keep the entire system in balance and checked. My focus — as far as this article is concerned — is on those firms, organizations and companies that compete fairly, win fairly and those wins generally result in the good of everyone involved with the company. And no, this is not Utopian perspective. There are such companies in existence.
In my decade old history of working, I have been fortunate enough to learn from/with entrepreneurs in India, the US and Germany. These have been the independent business owners who ran with their own ideas and try — even to this day — the true spirit of entrepreneurship. Isn’t that the desire to do what you know you can do and do it to the best of your abilities? You want to help people move, sure, create a company for that. You want to help people package, sure, create a company for that. No matter which business endeavor these wonderful men and women have chosen to undertake, there have been some characteristics I found common through all of them:
1. They all really cared deeply about their customers — some in fact going as far as their “customer’s customer.” In my understanding this is superbly important because they internalized the idea throughout the company that customers exist, therefore we exist. This is a highly important logical chain to complete and also, at the same time, the simplest conclusion to arrive at. I mean, there are no markets without consumers/customers. No economy without those who will also consume the resources it distributes. This is also important to establish what I generally have tended to call “scoping of a company’s influence” in that if say, for example, someone concentrates on their direct customer’s customer, then they are more than likely to also take upon a heightened sense of self-responsibility in their efforts and will be very careful candid planners.
2. They are genuinely organic Leaders — in that they really do handle each situation within its context and with their fair assessment they arrive at a middle-ground for each party involved.
3. They tend to think of profits not just in terms of money. (This was quite hard for me to grasp at first because throughout all of our accounting/finance/controlling classes, sadly there’s just a number which represents profits. But is that all there is to it?)
In 2008 when I was working with an entrepreneur in the US, we were going through that almost-forgotten era of economic meltdown. I am not pointing fingers here (as far as the financial crisis is concerned) because my aim is to present one very particular approach I learnt when all was in shambles. And we were in the transport business (if you recall, these were the hardest hit industries) so I could personally feel the pain the economy was feeling because it was showing up in my books in the numbers. And no matter how much business we tried to capture, the struggles continued. My then-Boss’s approach was — have faith and keep calm. He literally told me everyday that profit isn’t just the money but also the service and comfort we are providing to our customers. I admire him for his grit, really. Despite all the losses we suffered, whenever we gained a new customer, his demeanor was childlike and wonder-some.
I learnt later that in his worldview, profit included not just company’s profit but also customer’s profit as well, even though we did not “record/account” it. And that, I think, is an extremely ingenious way to look at it. Sure, our accounting standards may not allow space to really measure them because we are balancing Balance Sheet with a different perspective. But to an entrepreneur, their customer’s profits matter just as much. Profits are also the overall value we are permeating through the interconnected system of markets. Whether or not these are measurable (and to what extent and how) are highly independent definitions and they more than likely will vary as soon as our context and setting of firms change. However, I believe that in an aggregate picture, it should be possible to establish their fair-share.
Therefore, in general, I admire companies whose vision includes the holistic view and an organic development. Of course they too want to make profits but they also understand, change and adapt according to the needs of their customers. This applies to both B2B as well as B2C. In one of my essays for a course, I remember looking through some huge corporate companies (while researching) which extended their credit lines to their customers so that they had the room to breathe when navigating through the tougher times of the economy in general.
And this sort of a “social sense” matters. Economy isn’t of the Robots, for the Robots, by the Robots. These are trading systems for the people, by the people.
Thus we establish — for the purposes of this article — first element: Shared Space.
Each company, therefore, also has a business model. And what is a “model” if not a generalized but accurate idea representation which answers two questions: (a) What the company does and (b) How does it do it. Ikea sells furniture but does not make them. Uber provides taxi service but does not own the cars (well, not yet anyway). Airbnb provides places to live for short-term adventures but does not own the houses. What these dramatic changes bring forward is that the central “value” which industries like hospitality, Auto or Banking used to provide is becoming more decentralized. Companies are empowering themselves simply by empowering their customers.
However we see it, these are societal changes no one can “control” because these are the results of organic developments in different sectors of economy and as a result of Information Technology, these have helped create economies-of-scale previously not thought of.
I did not know until three days ago that I can now buy a flight ticket and pay for it in installments (or “Equated Monthly Installments” (EMI) as they love to call it in India). It’s a flight ticket. Generally a lot of us are used to paying for it as one lump sum amount. And this is just one example. If I start going down the list of things that can now be converted to EMIs then we would never get to the end of this article. Suffice it to say, whatever future we expect or imagine, we must first be ready NOW to accept that previously unimaginable levels of economies of scale IS and ARE now being made possible.
This upends the entire worldview.
In my life thus far, I have performed multiple types of controlling, depending on the country, regulations and culture of the firm I was associated with. The reason I love Functional Controlling so much is because I see it first as a highly advanced and agile form of financial appropriation. And given today’s requirements — what with everyone going through “change management” and all — I think that these are perhaps the best of times to experiment with creating IT structures we did not imagine possible earlier. Fine tune everything to the function it performs so that when the function changes, so does the fine tuning. And with that one simple logic, mega architectures can be created which can operate simultaneously and seamlessly in as many dimensions as possible. And this is our immediate future, in my opinion.
This is also the second element (within the scoping of this article) — Integrated IT technologies.
When first time in my life I was using SAP ERP, I had no idea what I was dealing with. To me it just looked like pushing some buttons on some keyboard and that was it. It took some years before I put together what a person does when they are performing a specific business function and how a business can be thought of as an interconnected series of activities, all performed in sync to add to one overreaching goal. This is when I was in awe of the technology that SAP (the company) created. Finally, I thought, all those MS Office platforms I was learning throughout my life actually had a meaning and sense and purpose.
Arranged information is much more useful, especially when trying to decipher what occurred, than scattered innuendos spread throughout spreadsheet. This is — in essence — what most (if not all) of technological companies are trying to achieve and deliver when making a business value proposition. But at that time, I had my own ideas to ponder which were mostly related to Physics (the science I cannot live without) so I paid not much attention to it. It wasn’t until I came across the double-slit experiment during my studies in that I finally had something awesome to occupy my mind with. The Wave-Particle duality, tested. And this helped solve one of my childhood mysteries as well. In our hostel life in Navodaya, to stop the summer heat from entering into our rooms unscathed, I would often put up bed-sheets against the windows as I went about taking afternoon naps. What was curious to observe during those times were the upside down images of people moving about on the roads and how their reflections functioned on my walls. There was color to those images and it was — in short — motion picture technology’s primitive and very raw representation.
I have earlier written about how we as humans managed to finally solve this mystery and the way I saw nature function like this helped form the idea as to how data-architecture could work. And I was so happy to find that some of the most imaginative minds had already thought this through, hence creating the foundations for Lambda Architecture. This is the newest dawn or, rather, evolution of what can be done with IT systems we have available to us.
This is also the third and final element for this article — Predictive Analytics.
So yes, all is well and good. But here is the missing link. We need to take people in consideration. As in, yes, I acknowledge that modern world technologies help create a lot of ease for both businesses and systems. I also acknowledge, at the same time, that we need to upskill ourselves in these areas. I obviously know very little about how its all put together. I only know that technologies that have best helped us are the ones that go hand-in-hand with the people that are using it and that requires knowledge transfer both ways.
Because for me, at the center of all of the trading systems and whatnot are people. We cannot productively move forward if we do not help each other (and “us” in general) understand what we are dealing with and how best can the advancements be utilized in shaping the future of entrepreneurship and humankind in general and our integrated lives in particular.
And therefore, here’s to hoping for a peaceful and hopeful future :)