The master key of success: professional management



As with everything in the modern world, the key to success is relentlessly changing shape. In addition to setting up target oriented goals and making strategic investments in key markets, corporations must now satisfy the demanding working expectations of bright young employees born and bred in social media. The clear shift toward transparency at every level of a corporation further increases the burden of accountability of corporations as well as their employees to a much greater degree than in previous generations.

In essence, achieving success requires corporations to set the right targets, make the right decisions at the right times, and employ the right individuals with the sole purpose of realising such targets. This involves a great deal of thinking, planning and contemplating. The calculations must be solidified into corporate plans and the plans must be converted into corporation actions. If the actions deliver the targeted results, success is achieved.

So, how do corporations make the right calculations to deliver the most sought after success, i.e., profit? It is called strategic management of resources, which balances many variables, and inputs toward a particular vision of success. The inputs are mostly provided by human factors (directors, employees and shareholder expectations), material factors (corporate assets, interpretation of market) and legal/tax concerns such as those arising under antitrust regulations, minority shareholding protections and financial reporting obligations.

There is one basic difference in the management of corporations in emerging markets and developed markets. As is commonly found in many emerging market countries, Turkish shareholders tend to be the ultimate decision makers over the management of their companies. In practice, board members are under the direct command of the shareholders. In most cases – since the change in commercial codifications permitting legal entities to be appointed as board members – the shareholders were also appointed as the board members of companies established in Turkey. In the developed markets, however, it is common to see a professional management team on the board of the corporation acting – to a great extent – independent from the shareholders. Such practice in developed markets would evidence that boardroom intelligence is indeed in close connection with the successful strategic management of resources, which in return converts into profit.

Placement of professional management teams on the board of corporations is not a mere coincidence. To carry out their operations, corporations need funding. The need for funding grows in parallel to the growth of scale of operations. As the need for funds exceeds the limits of a single group of shareholders, the concept of co-investors takes precedence over family corporations. Once there are multiple shareholders in a corporation, their expected rate of return on their investment and their risk aversion preferences start to differ. Such differences in the preferences of the investors result in conflicting management positions. Such conflicts, unless resolved expediently and efficiently, will decapitate the corporation, reducing it to deadlock. As the markets develop businesses that operate via corporations holding multiple groups of shareholders such as those in the US and UK, the concept of professional management takes the lead and steers corporations to success in the form of increasing profits satisfying all groups of investors.

The gradual inclination to appoint independent management teams on the boards of corporations opted in the US and UK inspired other investors in smaller markets to seek help without completely vacating their management seats. This sought after help has taken the form of ‘management consultancy.’ Management consultants are outside players who provide intelligence to the actual managers of corporations. The intelligence provided focuses on strategic management of resources and setting realistic development goals.

Specifically in Turkey, management consultants provide valuable services that guide traditionally structured management boards toward efficient cost cutting, and realising their growth targets. This is generally regarded as a median way for a family company to relinquish its dominance over the management of their corporation.

As per the study conducted by the General Efficiency Department working in tandem with the Ministry of Science, Commerce and Technology, corporations in Turkey that hire management consultants benefit from such services in the following areas (in descending frequency): (i) management of human resources (hiring, remuneration policies, performance reviews, etc.); (ii) strategic management planning (strategic development and planning, etc.); (iii) certification services (ISO 9001, ISO14001, etc.); (iv) quality management (quality control, process management, customer satisfaction, etc.); (v) management skills training; and (vi) corporate governance and organisational restructuring guidance (corporate identity development, preparation of family constitution, etc.).

The same study also pointed out an important trend in the management consultancy business: most management consultancy service providers began operating after 2007. The increase or, in a more apt comparison, the hunger for professional management services in the Turkish economy coincides with the growth and stability in its financial market. It is heartening to note that the managers are in fact aware of their shortcomings and are not too stingy to pay for outside supplement of intelligence in their boardrooms.

The participation of world renowned management consultants in the Turkish market also signifies that Turkish corporations are following up on international developments and have a vision to become as professionally managed as international corporations that survived more than a couple of generations.

While congratulating the efforts of local players for adapting to professional management norms, from a legal perspective, the question of accountability still is a concern for most Turkish directors holding a seat in Turkish corporations.

The checks and balances system created over time in developed markets between investors and professional management teams permits almost 100 percent accountability for the decisions adopted by such professional directors. On the other hand, management consultancy providers are outsourced as contractors and do not provide results-guaranteed services. Investors – acting through their directors – have to take a chance and live with the consequences of any consultancy provided.

Even if we still have a way to go before adopting similar checks and balances in Turkey, compared to those seen in developed markets, the Capital Markets Authority of Turkey has already taken steps and mandated publicly traded corporations to appoint at least two independent board directors. As in most cases in Turkey, legislative institutions spearhead innovations in markets for more transparent, efficient and professional management.

Globalisation and the ever accelerating speed of technologic innovations create endless opportunities for corporations. While providing opportunities, both globalisation and technologic innovations in return demand strategic planning and efficient structuring. Critical utilisation of knowledge in the form of wisdom no longer resides purely in age and experience. With the coming of Generation Z, and changing forces of Silicon Valley and internet based corporations, traditional investors must make room for boardroom intelligence to ensure sustainable development, success and profit.


Deniz Peynircioğlu is an associate at Hergüner Bilgen Özeke. She can be contacted on +90 212 310 18 00 or by email:

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Deniz Peynircioğlu

Hergüner Bilgen Özeke

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