Effects of reactive management
Reactive management is best described as the process of managing where issues are only addressed once they are present, and occasionally only when they become critical. For example, in a supply chain, if a shipment is late, a reactive manager would begin focusing on an issue once they realize there is a standstill in production. By the time the issue is identified, it is usually too late to effectively correct the mistake.
There are several reasons that an organization may operate as reactive.
- An unknown crisis
- Lack of planning
- Poor risk identification
- Management preference
It may not always be in the organization’s hands. For example, there is no way a company could have predicted the pandemic. As a result, many businesses had to home in on the issues that unfolded before they were able to address any preventative measures. It becomes a challenge of risk assessment. A company must value their current liabilities and compare it to the potential of other future risks.
Reactive management can be extremely stressful for all parties involved. Since every problem seems to come out of the blue, there is a lack of time to be innovative or creative. As challenges inevitably pop up, it is not uncommon to make costly mistakes arising from decisions made on a whim. The largest downfall of reactive management is the inability to build and make improvements due to the lack of focus on long term goals. Reverting to proactive management can restore some balance to the organization.
How to manage proactively
In contrast to reactive management, proactive management focuses on identifying potential issues and minimizing them before they happen. An example of proactive management would be a manager identifying an issue with a supplier ahead of time, and then making alterations to make up for a potential loss. The key element in managing proactively is identifying and expecting conflict to occur.
There are 4 major steps to achieving proactive management.
- Time management
- Understand processes
- Managing risk
- Innovation
First is time management, which is arguably the most valuable tool when attempting to be proactive. It can be helpful to create a list and organize tasks by importance. Time that is allotted in the schedule beforehand can be used to prepare for future problems.
Second is to understand the processes involved in managing a company. Ideally, each person should be able to communicate quickly and smoothly with one another. When a process is not universal, there can be delays and miscommunications which can exacerbate prior management issues. One of the best ways to ensure universal processes is with software such as an ERP system. An ERP system can standardize how information is recorded and allow accessibility to the information from a centralized database.
Third, is being able to manage risk. Without software, it can be challenging to spot risks. An ERP can collect information and make it much easier to see where the issues lie in the supply chain, and when potential issues could arise.
Lastly is innovation. Being proactive, a manager can facilitate innovation and insight into the future. Instead of focusing on current issues nonstop, a proactive manager can look to see how they can improve business functions overall. Being proactive allows for freedom and can serve as an essential part of any company.
Interested in improving the proactivity of you team’s management? An ERP system can help get you there. Get to know Kissinger Associates, for decades, we’ve helped growing companies in manufacturing and distribution by providing them with systems that benefit their unique business. Get to know more about our team and contact us for a free consultation.
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