“The pandemic was a perfect test for agile business management”

Let’s cut to the chase: what do exceptionally well managed companies do better than others?

Andreas Bodenmann: One of their distinguishing features is what’s known as agile management. They have set themselves up internally in such a way that they can spot signs of impending change early on and react quickly to them if necessary.

The COVID-19 pandemic brought a great many changes. Did that mean it presented an interesting test as well?

Indeed. As the saying goes, failing to plan is planning to fail. Nearly every company was forced to act in the face of the restrictions imposed by the pandemic. It was a perfect test for agile business management.

Can you provide an example of agile business management?

We consciously refrain from emphasising individual aspects that characterise a company as agile. This is because, depending on how a particular company is set up, the same thing could be a sign of either strong or contradictory business management. However, one example that did impress me a great deal involves a food business that had to switch from bricks-and-mortar sales in its own shops to trading online within a matter of days when the pandemic hit.

How did the management respond to this need?

It was astonishing. They immediately gave the staff a warehouse to use, where they assembled racks and set up packing lines in virtually no time at all. This allowed them to put the logistics in place for a full-blown e-commerce operation in just a few days. At the same time, the company also gave its online shop a more professional look. Thanks to this swift action, the business survived the pandemic without having to make swathes of redundancies.

You’re responsible for the ‘Best Managed Companies’ (BMC) programme in Switzerland, which involves an independent panel recognising the best privately owned companies. What is the significance of this accolade?

It is a mark of excellence for exceptional business management geared towards sustainable corporate growth. The programme was launched 30 years ago in Canada. Today, the title of ‘Best Managed Company’ is awarded in almost 50 countries. Getting the award also helps the receiving companies to raise their profile in the public eye. This is worth a great deal, and not just in terms of marketing and communications: many privately owned companies still lack an ‘outsider’s view’, and the detailed assessment they undergo during their BMC audit holds a mirror up to them, so to speak. It enables them to reflect on their internal processes and business practices from an external perspective.

Why is this outside scrutiny important?

The best-managed companies consciously seek out and take on board a range of opinions and viewpoints. For privately held companies, this can mean that the board of directors or management team not only includes family members but also people from outside, such as someone who works in a similar industry or at a much bigger or smaller business. Or someone with skills that the company doesn’t have.

Women tend to think more independently, that they value sustainability and inclusion, that they are less easily swayed and that they often handle risks differently to their male counterparts.

Andreas Bodenmann is a partner at Deloitte Switzerland and leads its ‘Best Managed Companies’ programme.

You say ‘someone’ – I take it you deliberately chose not to say ‘a man’ or ‘a woman’.

Yes. The impression I’ve had for many years – which is also borne out in numerous studies – is that women tend to think more independently, that they value sustainability and inclusion, that they are less easily swayed and that they often handle risks differently to their male counterparts. These are all good reasons to get women into decision-making bodies.

What other strengths are characteristic of the best-managed companies?

They involve employees from various levels of the hierarchy in the company management and delegate responsibility to them. Firstly, these employees tend to be closer to the customers and have a clearer idea of what they need. This knowledge is worth its weight in gold. Secondly, these colleagues are the company’s most important ambassadors. If they play an active part in developing the strategy, they are more motivated to implement it.

Isn’t there a contradiction between a company’s desire to be agile but also pursue a long-term strategy?

How does a well-managed company balance the two?Companies that are exceptionally well managed need to set themselves up in such a way that they can adapt quickly to changes in their environment. That is key. The strategy is the first of four core elements. The second is company-specific innovations and skills. The third relates to corporate culture and the emotional bond that staff feel towards their employer.

And the fourth element?

On the one hand, it encompasses the structures, policies and processes used to manage and monitor a company. On the other hand, it relates to its financial health and performance. To be successful long-term, a company needs to have these four elements in alignment – but it must also be structured in a way that enables it to draw momentum from all four elements to give it agility. There is no contradiction in that.

How do companies with an agile management setup maintain their entrepreneurial focus?

It is true that the best-managed companies also tend to be the most focused companies, because they have a clear idea of what they want to do. Here is another example, without mentioning any names: one business that won a ‘Best Managed Company’ award makes products that everyone recognises thanks to their brand-driven packaging. However, the company identified a major need for improvement in relation to the materials that are used in its packaging. Now, it simply uses recyclable raw materials for this purpose – a big step towards sustainability. This prompted the management to also ask itself whether the company should diversify, such as by offering its packaging expertise to other companies. But due to limited resources, the management eventually decided not to.

What role does luck play in the life of a business owner?

Luck definitely plays a significant role in the lives of companies, but it really depends on how proactively you ‘seek it out’. Entrepreneurially minded managers who are open to new things are better able to seize opportunities, and companies that embrace agile management are particularly well placed to spot and exploit these opportunities. When it comes to business management, agility means being able to respond quickly to change and put decisions into practice efficiently. In other words, luck can turbocharge success if it is combined with intelligent business management.

Every company should know where their greatest risks lie. To minimise these risks, it must incorporate risk monitoring tools.

Andreas Bodenmann

As the CEO or owner of a company, how should you handle potential risks facing your business?

Every company should know where their greatest risks lie. To minimise these risks, it must incorporate risk monitoring tools. Let’s take the example of a company that develops high-tech products for the aviation industry. It is a good idea to first of all define scenarios with probabilities of occurrence for certain risks, and to then determine what would need to be done if problems actually arise. It is standard practice to report quarterly to the board of directors on the status of the company’s product portfolio and on how the individual risks are developing. Of course, not every business would need a risk management approach as nuanced as that.

I would like to bring our conversation to a close with three quotes from exceptional entrepreneurs. Could I ask you for some brief thoughts on them?

Let’s start with this quote from Steve Jobs: “Innovation distinguishes between a leader and a follower.” What do you think?There is no reason at all why the leader has to be more innovative than the follower. Neither is it a given that a leader will automatically have better opportunities for growth and be more profitable than a follower. What is important is that you consciously decide which approach to take and you consistently stick to it in the management of the company.

According to the entrepreneur Richard Branson, “Success in business hinges on motivating your staff. There’s nothing more important than that.” Would you agree?

Managing staff in the right way is crucial. But structures are just as important. A lack of structures risks employees not being deployed in a focused way. This will cause motivation to drain away fast. Jack Welch, CEO of General Electric in the 1980s and 1990s, once said: “Before you are a leader, success is all about growing yourself.

When you become a leader, success is all about growing others.” What’s your view on this statement?

I would say that ‘growing others’ applies to all management levels – hopefully it doesn’t stop with the CEO.

Andreas Bodenmann is a partner at Deloitte and leads its ‘Best Managed Companies’ programme, which recognises private companies with outstanding management practices.