An entrepreneur, from any industry or sector, has three specific functions that we will define as: “The Routine, The Circumstance, and The Structure.”
“The Routine” involves doing the essential tasks to achieve short-term operational results. Our CREA movement has contributed significantly, with its work methodology, to professionalize and improve routines. Planting, protecting crops, harvesting, implementing a health plan, buying and selling are some examples of routines. If these tasks are not performed and improved, there are no businesses, and if there are no businesses in the medium term, there are no companies. In this context, “The Routines” contribute to the value return for the risk taken in business.
“The Structure” comprises a set of actions aimed at transforming the company in some aspect. These actions, properly planned, are commonly known as strategic lines. A company that successfully implements strategic lines will be more competitive and increase its likelihood of being interesting and transcendent. Formalizing corporate governance, defining management policies, educating and informing the business family, among others, are actions that do not generate more operational results in the short term, but have the potential to transform a company’s future. In this context, working on “The Structure” contributes to increasing the ability to create value.
Finally, we come to “The Circumstance,” a group of factors that in certain situations consume much of an entrepreneur’s time, and as a consequence, usually, structural actions are postponed first, followed by routines. If an entrepreneur is unable to manage the circumstance, not only will they not perform the essentials well, but they also won’t generate structural transformations in their company.
Operational results or value return for conducting business will be a consequence of a company’s ability to efficiently implement routines and manage circumstances correctly. The creation of value and the transcendence of a company will depend on the ability of an entrepreneur and/or their management team to implement strategic lines and also to manage circumstances by seizing opportunities and mitigating threats.
A few years ago, in the CREA movement, we set ourselves the challenge of turning agricultural producers into entrepreneurs. An agricultural producer is simply a good routine implementer, but as explained earlier, this is not enough. An entrepreneur, in addition to efficiently implementing routines, manages circumstances and, above all, works on the structure.
For an entrepreneur to be able to work on these three aforementioned functions, it is necessary to ensure that the company reaches a minimum scale. If companies lose scale due to patrimonial divisions, the first consequence will be not working on structural aspects, and the second will be the inability to efficiently implement routines. If the latter occurs, we would move from producers to farmers, where the implementation of obsolete routines only allows for family subsistence.
It’s time to go further; it’s no longer enough to move from producers to entrepreneurs; the new challenge is for companies to be interesting and transcend entrepreneurs. It’s time to change the question: “What’s best for the entrepreneur?” to “What’s best for the company?”
By: Alberto Galdeano – Managing Partner of Simpleza SA. www.simplezasa.com – Leader of the business area of CREA.
