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A piece of the action

Like many management gurus, Eddie Obeng is somewhat larger than life. Given to snappy clothes and effusive language, he has been described as the Max Headroom of the business world and “as energetic as Tom Peters – but not as long”.

Unlike most management gurus, though, he is not a great one for strategy. Indeed, in one of his books he says ‘strategic’ is sometimes used as another word for ‘loss-making’.

Instead, he concentrates on getting to the basics of what make businesses work – and it is this realism and groundedness that has brought clients as varied as supermarket group Tesco, kitchen and bathroom company Magnet, and electronics company Sony to his Pentacle Virtual Business School.

Pentacle is, in essence, Obeng – based in Beaconsfield because of its proximity to major transport routes, London and his home. He calls in reinforcements when required for courses and other programmes, and also works with organisations and individuals via the internet. The flexible style of the business school, which Obeng has now been operating for 10 years, is a deliberate response to the fast-paced and increasingly complex world in which we live. Moreover, the style of the premises – a modern interior behind an old world facade – is also designed to unsettle those seeking his help.

A former executive director of Ashridge Management College, Obeng first made his name in the field of project management. Formerly the preserve of engineers and other specialists with particular tasks to perform, projects became more widespread as various consultants convinced managements they were essential tools for doing business in the modern world. The problem was that many of these initiatives ceased to live up to the project name and just went on and on, failed, or were simply abandoned when something else came along.

Obeng’s solution is ‘chunking down’ such challenges into manageable parts. This then enables managers to choose the best approaches, team members, tools and techniques for turning the objectives into reality.

“There are too many initiatives and there’s not enough focus on objectives,” he says.

The concept is developed in a succession of books, including Perfect Projects, Putting Strategy to Work – The Blueprint for Transforming Ideas into Action, and All Change! – The Project Leader’s Secret Handbook. While they all tend to be written in short chapters and in Obeng’s accessible style, Eddie Obeng’s Soundbytes carries the notion even further – it is simply a collection of aphorisms, exhortations to action and illustrations spread over 150-odd pages.

While Obeng’s approach – both in the books where the lessons are often tied up in stories, and in person – is quirky and memorable; it works because it makes sense. When Obeng holds up a diagram of lots of interconnected bubbles to show how work goes around an organisation, individuals recognise it as illustrating why they always feel overworked.

Nowhere is this more obvious than in the increasingly complex ways in which supposedly flatter businesses organise themselves. As even professional firms expand around the world, the matrix – whereby businesses organise themselves along both geographical lines and by types of business – is becoming increasingly common. According to Obeng, such a development just increases the complexity through increasing the number of relationships between managers to the point where nothing gets done. Worse, even though each element is supposed to be equal, certain ones will become dominant, either because they are based in the country in which the business started or because they are the most profitable. At the same time, the matrix assumes that the organisation can be managed through two dimensions when there are, in fact, many.

The answer is to get away from concentrating on systems and develop a business model whereby genuine virtual teams can come together to deal with particular issues or deliver what customers want, and then disband and come together in a slightly different configuration for another situation.

But if such organisational problems get in the way of the work being done, it is not always clear that managers know what has to be done. In his 2002 book, Eddie Obeng’s Money Making Machine, a spokesperson says: “Most managers and executives are more ignorant than month-old babies on how a business actually makes money.”

Obeng uses the example of a waitress dropping a plate of cakes to challenge the concept that businesses make money by adding value. Under this approach, it is assumed that each stage in the production of the cakes adds value.

As a result, the dropping of the cakes (and making them unsaleable) destroys the value. The logical extension of this is that it would be better to keep the cakes in the kitchen because that would reduce the risk of the value being destroyed. But that would be absurd, so there must be some other explanation for what is going on in the production of the cakes.

Obeng’s view is that in any process such as this costs are invariably incurred – through buying ingredients, mixing them, cooking the cakes etc – in the hope that at some stage they will be met by somebody else – the customer. The old view of each stage adding value to the final product is a holdover from traders acquiring more valuable things through a series of transactions, he says. That was the Old World of business; we are now in a New World. In this world, he adds, there are five facts about money:

1. Money is hard to get hold of. It is closely interwoven with time and someone else has the final decision over whether or not we make money.

2. Making money is the effect of actions and decisions. Money is transient, changes its value constantly and is hard to hold on to.

3. There is always something which stops us making more money.

4. It’s most useful as a set of stored promises only when we ask for the promises to be met.

5. It is an illusion which can distract you from what is really important.

This all looks a little theoretical. But the root of Obeng’s argument is that the key to success is breaking the business “into chunks of activity that bring in money faster” and combining that with a long-term vision.

As such, it is indicative of a change in the way business is conducted.

In the Old World, business was really a zero-sum game in that, at the end of a given transaction, one person had the goods and the other had the money. It was a straightforward exchange. Now, though, if somebody, say, develops a software package, he or she can sell it to another person by transferring it over the internet in return for a payment. However, not only will they still have the original, they potentially have information about the customer as well, which they can use to market the product to other customers. With each transaction, this extra ingredient becomes more valuable.

Obeng believes the collapse of so many dotcoms has distracted attention from the New World by convincing many that the old rules of business still apply. But there is an overlap in that some of the successes of the New Economy are applying New World-type principles. In the Old World, the approach was to build something first and then sell it. In the New World, the focus is on making money first.

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