Sabah Al Binali: Why good managers are more like Toyota and less like Apple

Steve Jobs was the exception, not the rule. John Mabanglo / EPA

Many finance authors, including this one, will usually talk about the big steps that a company has taken to become successful. Sony’s Walkman portable tape player in the 1970s, Microsoft’s Dos operating system in the 1980s and Apple’s iPhone today. But this is not managing a business so much as it is innovation; innovation can only take you so far, and it is not strictly necessary.

What is management at its core? It is constant maintenance and making small, continuous improvements, which the Japanese call Kaizen and is one of Toyota’s core values. A good metaphor is tending a garden. A garden, like a company, cannot usually just come into existence. Sure, you could buy plants and grass turf and have a garden overnight, but that is no different than buying a company. I’m talking about planting seeds and nurturing the garden.

So what does this entail? A whole book would not be able to cover it, but we can get a flavour by examining a few aspects, especially those relevant to the GCC. The first and foremost issue is actually taking action. This action can be speaking up, making a decision or just moving a project forward.

First we have maintenance action. Without maintenance, weeds begin to grow. At first this does not seem to be a big problem. But as the weeds grow taller and thicker, they end up choking all the grass and plants. Worse, for the uninitiated weeds seem like normal plants.

What does this mean in the real world? One facet is weeding out corporate politics and the employees who play them. Because corporate politics are like weeds they seem harmless enough taken individually and early on, but unchecked they grow and start choking off the productive parts of the company. Corporate politics can rarely be destroyed after it has reached a certain size. Just like weeds, it has to be yanked out as soon as it becomes visible.

Another area is morale, and in some sense it is the opposite of corporate politics in that morale is a good thing. Morale needs to be tended on a continuous basis. Just like you cannot expect a sapling to grow into a tree overnight, morale needs a long period of time of being tended to grow. On the flip side, destroying morale is no different than chopping down the tree – you are not going to rebuild it overnight, if ever.

A third area is misunderstanding the point of whether lack of decision-making creates problems for the company. As I have discussed in previous articles, our culture is one of respect, but sometimes this can be taken too far in the context of business.

Not speaking up is like not watering the plants. Sooner or later that silence will end in the equivalent of plants dying – departments will become obsolete and there is little that can be done to save them. Decision-makers need to speak up in a timely manner, even if it is a little at a time, to ensure the continued health of the business.

The flip side of this is patience. Take your time. Don’t push. You can rarely force something to grow, be it a plant or a company. But there is a fine line between patience and cowardice. At some point you need to accept that the withering plant cannot be saved. In the same way there will be personnel who are deadweight, business lines that are withering or business models that are fatally diseased, in all three cases silence is not patience, but a death sentence for the company.

Not all core management tasks lend themselves to a horticultural analogy. For example, management is not focused solely inward. There are external stakeholders and resources that need to be managed, such as clients, suppliers and potentially regulators. For such cases the lessons learnt from managing inward apply just as well.

A final note. There seems to be a culture of “no harm, no foul” in some companies. This could mean someone taking an unsanctioned risk who gets lucky in the outcome and therefore does not face repercussions. This culture is thriving because of a lack of speaking up or not wanting to rock the boat. This is dangerous and if not reversed can easily lead to the kind of systemic failure that destroyed the global financial services sector in 2008.

Sabah Al Binali is an active investor and entrepreneurial leader with a track record of growing companies in the Mena region. You can read more of his thoughts at al-binali.com.

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