Management styles – corporate, public sector and non-profits

Where do you find a good manager? Who are the best strategic leaders? What’s provides a solid grounding for running a business?

In the world of commerce, there is a rule of thumb which answers these questions as follows: Go straight to the private sector, where they know how to get the best out of a business. Failing that, look for a successful captain of a large public organisation. However, do avoid the non profits at all cost, because they are grounded in poor management, always seeking the next donation.

Yes, this statement is full of crude generalisations. To expose this myth fully, I want to share and sum up what I learnt from this past week in the world of Israeli commerce.

The Forbes list of 2012’s worst CEOs has gone round the internet and back several times. Israel has its own set of fallen heroes, led most prominently by Nohi Dankner. His holding company has controlling interests in the world of banking, retail, petrol, and more. For all that, his debts are almost equivalent to the size of the hole in Israel’s fiscal accounting. This week’s news of his lack of progress is further testimony to that financial disaster.

What is interesting is that one of the key problems I face as a business coach is the matter of planning cash control in small companies. So few people know about it, and take it seriously and have adequate mechanisms in place. It would appear that what is good enough for the top guys has a direct influence on those at the bottom of the pile.

Switching over to the public sector, I was fascinated by the observations that emerged from a conference organised by the “Calcalist” – Economist in English – debating and discussing predictions for the economy in Israel in 2013. With a general election less than a month away, many of the top politicians were given a platform to blurt out their words of wisdom. Slogans won out over direction, content and clear policy.

There is a feeling of Nero and his fiddle in Rome. What do I mean? Well, while the Minister of Finance, Dr Steinitz believes that taxes will not need to be hiked too much, the international renowned Governor of the Bank of Israel, Professor Fischer, argues that “according to expenditure restrictions we will be about NIS 15 billion (US$4 b) above the real rise of the permitted budget.” In other words, Houston we have a problem. Another example of mismanagemenet? Possibly the largest public sector monopoly, the Israel Electricity Corporation, reported last month that it is short of a billion shekels in cash. This is after announcing that it had repeatedly miscalculated its cash balances, still offers its workers free electricity, and is over staffed by around 2,000 employees who in turn are amongst the highest paid groups in the country. Now, do you blame the directors or the politicians who appointed these wise men?

I ask my readers to balance this quick review against the efforts of Elwyn Israel, a non-for-profit organisation, based in south-west Jerusalem. The charity seeks to place back in to society people with special needs, allowing them to work and live near independently. It operates nationally and across ethnic divides.

I was invited to a meeting earlier this week with the CEO and head of finance. They offered two simple guidelines to their success at Elwyn; a clear vision, combined with a refusal to commence a new project before it had been fully budgeted. So it was no surprise to learn that the work programme for 2013 includes expanding services and continued building.

There are probably many reasons for the successes and failures of each grouping. What maybe makes the Elwyn Israel stand out is a dedication that extends beyond the regular duty of management and leadership. The question is how others can learn to copy that.

 

 

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