Book Review: Arindam Banerjee,Management Essentials: A Recipe for Business Success

Formal management education has a long history with the Harvard Business School (where MBA degree was offered for the first time), which completed its 100 years in 2008. In India the two oldest IIMs also celebrated their golden jubilee a couple of years back. Currently, there are over 1500 business schools offering MBA or equivalent degrees in India. These schools have helped the industry over past 50 years by imparting the essential managerial skills to their students. However, there are questions being raised both by insiders (academicians) and outsiders (industry) as to the relevance of the teaching and training being imparted in these schools. There is a growing debate as to what should be the focus of business education and research. Should we focus more on the practice part and try to build theory based upon the practice or focus more on developing and teaching theory that has application across contexts? The book titled Management Essentials: A Recipe for Business Success by Professor Banerjee is an attempt by an ‘insider’ (professor at IIM) to make management education more realistic, practical and contextual without compromising the sound management principles embedded in the theory.

This small book (141 pages) has been divided into eight chapters. In the first chapter author introduces a framework of anticipation–transformation–money (ATM) for a value-creating organization. In the next three chapters, these three pillars of the suggested framework are described in detail. The subsequent chapters discuss the role of management analysis in decision making, importance of branding and few other management concepts that the author feels are critical for building a successful organization.

Chapter 1 introduces the ‘Effective Management Philosophy’ for sustainable value creation. Organizations need to continuously innovate to deliver superior value to the customers at comparatively lower prices. For that to happen on a sustainable basis, organizations need to innovate—innovations that are relevant to the customers and somewhat difficult for the competitors to copy almost instantaneously. To achieve this goal the author suggests the ATM framework. Accurate Anticipation, Timely Transformation and Money Matters are the three dimensions of the suggested framework. How well an organization is able to predict the future, adapt its strategy in line with the changing environment and deploy its scarce resources to achieve its goals would determine its sustainability. In Chapter 2, the first pillar of the framework ‘Power of Anticipation’ has been explained in detail. The author emphasizes the need to have disciplined approach towards futuristic planning. For improved anticipation, organization may use multiple tools, for example, historical data analysis, market experiments and expert advice to name a few. It would require cross-functional teams with ability to gather data from multiple sources. This function cannot be left to the foresight of a few in the organization. In Chapter 3, Professor Banerjee highlights the importance of effective and timely reaction. As it is not possible to anticipate everything, the managers need to have the ability to react on time. It would need multi-faceted workforce and flexibility in deployment of assets. Outsourcing could also be used to build versatility in organizations.

After discussing the essentials of anticipation and timely response, Chapter 4 focuses on ‘Some Crucial Inputs for Running the Organization’. As resources are scarce, for sustainable value creation they need to be deployed judiciously. The author here highlights three critical resources—financial, human and information. The author shares some conventional wisdom—do not borrow in a risky and volatile environment but some level of borrowing may be inevitable for improving the rate of return for the owner. The performance of an organization is largely driven by dedicated and competent workforce. Hiring, developing and retaining people are identified as key variables for sustaining performance. To tap the potential of its workforce, leaders must have empathy and respect for people. Having a vision, achieving goal congruence and ability to delegate are other essential characteristics of good leaders. To ensure continuity in excellence, strong focus on succession planning is also an area to focus on. The chapter also discusses the importance of right kind of information for arriving at right kind of decisions. In an increasingly complex and competitive environment, decision making should not be left to individual acumen alone rather should be supported by right information. The author suggests that investment in human resources and information resources must be viewed with a long-term perspective rather than for short-term gains.

In Chapter 5, the author describes ‘Analysis, the Groundwork for Good Decision Making’. The first point that the author makes here is that the role of analysis in not really to suggest the ‘best option’ rather the focus is on developing alternatives and reducing them to a smaller set by eliminating inferior ones. Having reached such a stage, managers need to use their judgement to take an appropriate decision. However, when to stop analyzing further is a call that the managers take using their experience and also based upon the urgency of the decision involved. Analysis is not a substitute to experience rather is a complement. Organizations must develop processes for data collection and analysis rather than relying primarily on specific individuals. Use of externally generated information would lead to more transparent and objective decision making. For an impactful analysis, conceptual clarity and understanding of the context in which decision is being taken are critical elements.

Chapter 6 covers the need and importance of ‘Branding’ as an outcome of marketing offer. A successful brand must have a recall value by a large number of consumers who are aware of the brand. Successful brands are built on strong differentiation based upon benefits which are found relevant by the consumers. Last but not the least, the ability of the organization in delivering the benefits as promised lead to sustained brand building. A well-designed communication campaign may be necessary for brand creation but it is not sufficient if the other elements as described are missing. The author suggests that successful brands are not created overnight but result from persistent business acumen over a long period of time.

In Chapter 7, the author presents ‘Some Stray Thoughts on Effective Management Practice’, focusing on six of the management essentials left out hitherto. As the chapter title suggests, it is a compilation of many unrelated but yet critical ideas for building a high-performing organization. The author questions the wisdom of depending upon consultants for decision making. In short-term consultants may be used for providing knowledge and competence not internally available within the organization but may prove to be counterproductive in the long term. The author also reiterates that hiring, developing and retaining capable workforce is one of the most critical roles of the leadership and must be viewed as a long-term investment. Next, the author calls for managers to focus not only on their functional goals but also on the organizational goals. Managers often in pursuit of the functional goals lose sight of the common organizational goals, leading to sub-par decision making. Further, long-term implications of current decisions must also be considered in order to seize opportunities and building long-term relationship with customers. The author then goes on to emphasize the importance of creating and managing demands for long-term value creation. Organizations often focus on cost control for improving profitability, which at best is a short-term solution. For long-term survival and growth market, development is critical. The author suggests a proactive approach to launch such initiatives in prosperous times when there is no pressure for immediate returns. As the next stray thought, the author suggests that managers must understand and appreciate the existence of informal networks within and outside organization. Managing these informal nexus of powers is an essential skill that the managers need to develop. The author moves on to the importance of good presentation and communication skill as an essential tool to convey the outcome of an effective decision-making process. Many good ideas get rejected or fail to get the support of audience due to poor communication by the presenter. A good communication must focus on the main message, have an impactful structure of presentation and meet the expectations of the audience.

In the last chapter ‘Epilogue’, the author concludes by suggesting that before making any assertion, it is better to state your assumption. Management is an imperfect science and therefore same concept may have multiple meanings depending upon the context. Defining the boundaries by clearly stating the assumptions would lead to better classroom discussion. Second, the decision makers need to pre-empt any potential criticism. Such a proactive exercise helps not only in defending the decision but also in improving the due-diligence by identifying the potential weaknesses. The author concludes the chapter by revealing his motivation in writing this book. The author states that to support the expanding economy, India would require large number of skilled managers. To impart the necessary skills, the business schools need to introspect and make the management education relevant, scalable and understandable. This book accordingly is an effort by the author to simplify some of the most common principles of management.

The book touches a number of functional areas and weave them together—strategy, finance, leadership, human relation management, marketing and customer relation management, branding, etc., in a simple day-to-day language. The message is clear that it is possible to convey even difficult managerial concepts without using heavy jargons to better reach the audience. To improve teaching effectiveness it is imperative to remove the disconnect between the ‘theory’ and ‘practice’. In order to meet the expectations of industry, to make the students more industry ready, the class room teaching needs to be more application oriented. However, at the same time it must be realized that the practices without the foundation of strong theory may not have a universal application.

Overall, the book under review, Management Essentials: A Recipe for Business Success, surely has been able to deliver what it promised. However, if you are reading this book with the expectation of finding a new theory or an innovative application of existing body of knowledge, it may not meet your expectations. The author himself admits in the preface that the book is only an attempt to translate existing theory into more realistic parlance. The author using his academic and industry experience has given a recipe which would be relished both by the academicians and the practitioners.