Entry Barriers

When I was a MDP consultant at IBS Kochi, I had a chance to visit premises of more than 50 small, medium and large businesses. My job was to develop businesses for the intellectual capital of the faculty at IBS. My experiences during the visits to the prospective customers' premises made me feel that intellectual capital is the least wanted capital by them, but mostly needed. We found two situations in the customer’s premises: one is " business is doing well" and the other " business is not doing well". After visiting a score of prospects we found a pattern in their responses, mostly unfavourable ones.

Places where business is doing well the following behavior is found.....

 They....

·   Do not allow the new service providers to access the business leaders

·   Show ‘we-know-it-all’ attitude

·   are busy Expanding the organisation at a faster pace

·   Revenue growth and profit generation is equated with business growth

·   Give high priority to prestigious certifications and image building activities

·   Focus mostly on customers with high purchase power

·   Engage in creating entry barriers to the new comers / competitors

·   Look for business diversifications

·   Command and demand services from the vendors (supply chain)

 Places where business is not doing well the following behavior is found.....

 They....

·         engage in cost cutting measures

      ·         sell the products at thin margins

·         arrange programs to change the peoples’ behavior. The programs will be conducted by in house experts or by an outside agency that quotes the least.

·         take disconcerted marketing initiatives

·         spend more time in urgent and managerial issues

·         Search for certifications that will give them credibility in the market.

·         are hesitant to discontinue the unprofitable / failed product lines

contributed by Sasikanth Prabhu

Closing the perceptual gap in the organisation

As part of the struggle to communicate, what benefits a company will get if they engage us, we offer a
sample session. The hazard of this session – Business Facilitation- is in the initial phases of our engagement. The people in the organization tend to scrutinize / evaluate us to death. After every sessions of two hours the client has a sub-conscious tendency to look for’ what did we gain today?’ Or ‘did we get what we have paid for?’ ‘Did we get anything new?’ Etc.etc.

What we have observed is that always people crave for new knowledge, new ideas, new paradigms, new models. And the attempts for these cognitive acquisitions actually neither solve the issues at hand nor place the company in a better business position. If the participants do not get something new, they get disappointed and the halo about our services also gets affected. Actually our programs are not meant to teach or enlighten about new knowledge but to bring perceptual changes and shared understanding, which unfortunately is not observable, articulable but have significant effect on the collective efforts of the company.

Different groups within an organization can have sharply contrasting perceptions of organizational aspects. For example, while senior executives are twice as likely as any other group to view their company as “resilient,” nearly 60% of line managers, mid-level managers, and business-unit staff describe the same organization as unhealthy in some respect. And though senior managers tend to feel positive about their involvement in operating decisions, many junior managers in the same company feel that senior managers “micromanage” or “domineer.”

Such perception gaps pose a serious organizational climate. Yes, we all want confident, optimistic organizational citizens. But if people within a company can’t agree on the state of its affairs, they can’t accurately diagnose problems or design and execute solutions for them. In our initial phase of our engagement, we dig out the dirt in the organization and try to close the perception gap.

 We make them acknowledge that different people have different perspectives on the organization’s matters. We allow the participants from different groups / departments to share their views—and the reasoning behind them. Sharing their views with others, backing them up with the data they have used to form those conclusions etc.. Our goal is….to compile a more complete picture of the organization. Also encourage honesty and acceptance in the group. We help them describe what’s actually happening in their organization. This process brings into light the real naked issues of the organization. This makes them realize the wrong ride they are taking. We are sure that mere awareness about the prevalent conditions can help managers and staff form a more objective impression of the organization’s health and help them build readiness for change. This feeling is the most important to bring about changes in strategy and organizational development. But alas! The immediate effortless change in perception is not considered to be a gain and the human mind craves for more knowledge…

Contributed by Sasikanth Prabhu

Killing Business Innovation

Innovation happens in most organisations on daily basis, but most of it is revolving around cost reduction or pricing tactics. Very very rarely do Business Innovation happens.

Business Innovation isn’t just a strategy – it’s a mind-set founded on the belief that a win for customers and employees is a win for the company. Unfortunately, most companies are unwilling to make the transformation from being product, geography, or function centric to becoming truly Business centric. With a decade of experience with many businesses, we have found six mind-sets that block business innovation.

1. Spends without focus. Firms pour money into traditional pockets.... training, sales promotions, advertisements, product / service development, but research shows that the market refuses to give them credit for this. Business owners make all kinds of excuses for this state of affairs –“We’re in a tough industry” or “All the Street cares about is short-term results”– but customers just aren’t buying it.

2. Makes budgets an entitlement. Senior managers who negotiate for funding typically make their decisions on the basis of the prior year’s budget or the company’s general cost concerns. At the same time, department staff view the budget funds as an entitlement (we ought to get this... attitude) rather than as a investment focused on the business. The result?  Business as usual, and the same (boring / off the shelf ) customer offerings.

3. Assumes people in the field know nothing. Most firms treat departments as seperate entities /functions run by people with respective special backgrounds. A typical business owner / CEO thinks, “Our technical people are in charge of product development – they have to develop and educate the sales people about the new product. Sales persons will never understand the complexities of engineering.” This mindset almost guarantees that products and services don’t properly connect within the organisation.

4. Puts Marketing, Finance, Administration etc. in different cubicles. These distinctly different functions are more or less autonomous. They rarely communicate, except to consider cutting budgets when overall business performance lags. Such disunity ensures that no one pays attention to business of what the customer needs and wants from the company as a whole.

5. Detaches Marketing from the customers. Marketing people can’t do much for customers beyond feeding them propaganda. For eaxample when premium resort customers often lack a decent meal or even a pillow, the poor folks in Marketing can only report on customer rage.

6. Don’t rock the boat ..attitude. Harmony is given priority than doing more business. Business leaders / top management shy away from organizing their businesses around customers' needs , arguing that doing so is “too complicated” or “too disruptive” for them. But for the organic growth of the business, shaking up is needed. Only then the sustainable benefits will flow to the customers, employees, shareholders and the economy as a whole.

We are exposed this kind of mindsets in our retainer engagements (DNA Crafting) and it frequently challenges us in various forms. With a balance of approaches we have begun to grapple with the situations. But we hold on to our methodology of 'Merciless provocation" though it is interpersonally risky, yet the only known effective method. Changing mindsets emerging to be our specialisation.

contributed by Sasikanth prabhu

Visioning

Now we have facilitated visioning exercise of more than 50 small businesses. Recently we did visioning program for a Automotive parts manufacturing Company in Dewas (Madhya Pradesh). This company was introduced by our friend Yogesh Jain who also became an ardent follower of School of Strategy and he runs his organisation Niche Quality Solutions Pvt Ltd (http://nicheqs.com/), which has long experience in providing Six sigma, Quality solutions to organisations in and around Indore. An year's experience in strategy workshops have given him an opportunity to develop an unconventional perspectives on business growth. He says " I have attended many management programs organised by institutions such as IMA.... but the business strategy workshops are different and they really add value to the organisation. There is a sense of fulfillment in taking part in these sessions". It is wonderful to work with him now... ...

During the meetings with business owners the question that comes up a lot in the work we do is the difference between vision and mission. At times we come across companies which do not bother to distinguish them at all: but...They have a separate Values Statement (thank goodness), but if you ask them to tell their Vision, and then their Mission, they’ll give you the same answer for both questions. So what is . difference? Does it matter? Yes it does! we will see visioning here .

• A strategic vision is usually thought to be solely future oriented. A vision provides an organization a forward looking, idealized image of itself.


• Moves outside the usual assumptions.


• Concentrates on the end goal, not the means to reach the goal.


• Followers gain ownership by developing the means (action plan).

Another benefit when done together with the people in the organisation is shared vision, which includes a present component.

• Vision is not a destination, but an intangible structure that surrounds us and guides our daily activities. From this perspective, a shared vision is a form of self-identity.

This definition of vision is a collective belief in what the organization can become. In this way it is similar to a truly desired wish for the future. If the vision is sufficiently broad it is enough for providing a framework for current decisions.

Regularly feedback can be employed for both corrective action and vision revision (interesting combination of words). If the feedback indicates a problem in the implementation and nothing amiss in the expected vision then the strategy and/or tactics can be altered to get back on track toward the vision. And if there is an indication that the vision is no longer realistic there is no problem with a shift in vision to a more workable vision. Normal planning cycles allow for such a step on an annual or half yearly basis.

ImplicationsWhat is unique about the organization's self-concept of itself? Something that would be missed if the organization were not to fulfill this vision.

What issues might arise among different stakeholders as this vision is realized?
Are organizational practices aligned with the vision? Are desired actions reinforced by performance metrics?

Putting an organization’s mission & vision in place requires working at all levels of the organization. Often, the effort is only made at the top of the organization with the expectation that employee commitment will follow. This assumption is far from true. It is recommended that a specific change program be put in place to develop a shared vision and common understanding of the organization’s vision and mission.

Characteristics of Strategy meetings with the key people of an organisation (Part 1)

By now I have facilitated more than 100 sessions on development of Business strategy and I see some common occurings / patterns in most of the sessions. The observations and experiences are given below.......

• The development of suitable / appropriate strategic options often require novel perspective. Catching the novel perspective sometimes is the most difficult and time consuming part in strategy devlopment


• Many in the organisation view strategy and execution are two different and sometimes even go to the extent that they cannot co-exist.


• Real strategy making requires inputs and contributions from various members of the team. But the top management has the tendency to act as an apex body and take a stand point 'do as I/we say ". This disconnects many employees from the business.


• Strategic information is often forgotten amidst new information pertaining to daily operations. This makes people to be fire fighting than doing the important.


• Many times it requires the key people to make difficult decisions, which they postpone thinking better decision can come as time passes by.


• Many important key points need to be taken into account from the business perspective. But many key people think only in specific functions such as finance, production, accounts, sales , HR etc. They think of doing the job well and not winning the business.


• There is gross disagreement exists among key players on basic assumptions regarding the future of their business.


• The strategy need to be communicated to the employees convincingly, but little time and effort is spent on making the strategy simple to communicate.


• Difference of opinion among the key players regarding the strategy escalates into personal conflicts at a later stage.


• The key players fail to help the employees feel that strategy is something worthwhile to pursue, to identify and to feel proud of.

contributed by : Sasikanth Prabhu

Unconventional Learning Program

Today, one positive thing is that the top management has begun to recognize the promise of sustainable growth hinges on the human beings (the key people) and not the technology or finance. Their key people’s knowledge, understanding and learning are the organization’s sacred assets. When it comes to breathing life into strategic initiatives, the key people are the ones who hold the power.

Creating a “learning oriented organization” to fulfill the growth needs has proven to be devilishly difficult.

If we read through the media we find that, the quest for employee-driven business growth is reaching a near-feverish pitch. Many organizations are looking for programs that will guarantee people’s commitment and engagement in the organizations goal. Often, sought after programs are Certifications, Computer based learning, Soft skills training, Offsite simulation programs etc. We have even found that some companies are intoxicated in conducting such programs.
Recently we asked one of the business owner of a Rs.40 crore company owner (our client too), what role does he play in the organization primarily. He said he spends a lot of time in HR development, developing people skills and attitudes. He is of the opinion that only if people’s attitude change he can go for business expansion / growth.

Sure, such programs are sexy and create a surge in the enthusiasm of the participants. But they are, after all, merely tools that offer no magic on their own. In factual terms, they do not seem to generate knowledge, commitment or enthusiasm in a sustainable way. For getting employees’ commitment and application of their skills the top management needs to begin the process elsewhere.

The challenge, here, is not “how do we get employees to learn.” Rather, it is “how do we create a situation in which they can use their own powerful and innate abilities to apply.” Notice the important difference between the two orientations. Organizational training ceases to be something we “do to” employees.

Instead, facilitators become triggers of a latent, collective power that may be harnessed and directed towards our organization’s shared goals and aspirations. The equation is simple. To unlock the power of widespread transformation, simply embrace some new assumptions. Immerse learners in experience. Welcome mistakes. Discover what works. Apply it to reality.

Though this later method of promoting learning in the organization is effective and invaluable, but the challenge is…. this service of learning facilitation is difficult to sell and it doesn’t have the boundaries and content structure of the other learning tools. The decision maker himself needs to be a learner and go beyond his/ her own thresholds of fear to subscribe for this method.

It is worth taking the risk…. The outcomes are unpredictable but valuable sustainably.

contributed by Sasikanth Prabhu

Possible causes of productivity problems in India (More of Kerala)

Macro Issues

Micro Issues

Economical · Inflation / recession · Excessive defense spending · High Energy prices · Subsidies to inefficiency · Imbalanced wealth distribution · Government too high a percentage of GNP · Unhealthy ratio of export to import · High technology cost · Unaffordable cost of living Agriculture & Industry · Insufficient /ineffective research and development · Exploitation of farmers · Lack of developments in product quality Governmental · Inappropriate and impractical legislations · Bureaucratic delays · Enormous paper work · Governmental waste · Low government productivity Societal · Discrimination based on caste, religion and language · Wasteful habits · Dishonesty and corruption · Frequent family conflicts · Transition from joint family to nuclear family · Increasing crime rates · Unhealthy public habits · Rioting tendency · Lack of constructive politics, resorting to mud slinging Education · Irrelevant curriculum · Not appropriately linked to career and occupation · Lack of commitment and efforts from tutors · Lack of facility and amenities · Excessive thrust on criticisms and analysis · Lacking creativeness, construction and synthesis Health · Undernourished / unhealthy diet · Stress Frequent incidence of epidemics Labour force characteristics · Low education standards · Adversarial relations with private sector · Poor work ethics · Pilferage · Tendency for strike and Unionism · Insensitivity and indifference to the management · Lack of loyalty to the organisation, business and occupation Psychological · Lack of motivation to achieve · Low self esteem · Improper communication styles Irrational cognitions

Organisational · Insufficient / Obsolete machines & plants · Misfit staff · Faulty structure · Discouraging and oppressive culture Business · Ventures without mission, vision, strategy and resources · Lack of understanding about market needs and market segment · Unfair pricing · Too much dependence on foreign technology & know how · Short term focus · Inappropriate risk taking Management · Inattention to operations · Inattention to quality · Excessive analytical management · Resource wastages · Inattention to human factors · Excessive executive pay · Lack of synergistic relation with vendors, suppliers and customers · Attempt to dominate other management functions · Adversarial attitude towards unions · Excessive attention to legal issues and paperwork · Resistance to change Unions · Insensitively asserting union rights · Featherbedding (getting paid for services not performed) · Rigid job classification · Adversarial attitude towards management · Pay greater than productivity · Keeping output low deliberately Employees · Preference for leisure time · Resistance to change · No pride in workmanship · Poor work ethics · Focus on pay and wages than on work · Improper utilization of wages earned · Self centeredness and tendency to take bribe · Unhealthy habits · Attitudinal problems with work · Laziness, negligence, indifference, arrogance

Productivity

Classical definition: Productivity is the ratio of output to input. Productivity means that more is produced with the same expenditure of resources.

According to Bernadine, H.J and Kane, J.S (1993) Performance appraisal: A contingency approach to system development and evaluation.

Effective performance (productivity related) at the individual or aggregated level can be defined according to six criteria.

The most effective employees or work units are those providing the highest possible quantity and quality of work at the lowest cost and in the most timely fashion, with a minimum of supervision and with a maximum of positive impact on co-workers, organisational units and the client/customer population.

Another conceptualization posits simply effectiveness and efficiency, with effectiveness defined as meeting or exceeding customer requirements and efficiency defined as meeting those requirements at the lowest cost possible.

Contributed by

Sasikanth R Prabhu (November,2002)

Possible causes of productivity problems in India (More of Kerala)

Macro Issues

Micro Issues

Economical · Inflation / recession · Excessive defense spending · High Energy prices · Subsidies to inefficiency · Imbalanced wealth distribution · Government too high a percentage of GNP · Unhealthy ratio of export to import · High technology cost · Unaffordable cost of living Agriculture & Industry · Insufficient /ineffective research and development · Exploitation of farmers · Lack of developments in product quality Governmental · Inappropriate and impractical legislations · Bureaucratic delays · Enormous paper work · Governmental waste · Low government productivity Societal · Discrimination based on caste, religion and language · Wasteful habits · Dishonesty and corruption · Frequent family conflicts · Transition from joint family to nuclear family · Increasing crime rates · Unhealthy public habits · Rioting tendency · Lack of constructive politics, resorting to mud slinging Education · Irrelevant curriculum · Not appropriately linked to career and occupation · Lack of commitment and efforts from tutors · Lack of facility and amenities · Excessive thrust on criticisms and analysis · Lacking creativeness, construction and synthesis Health · Undernourished / unhealthy diet · Stress Frequent incidence of epidemics Labour force characteristics · Low education standards · Adversarial relations with private sector · Poor work ethics · Pilferage · Tendency for strike and Unionism · Insensitivity and indifference to the management · Lack of loyalty to the organisation, business and occupation Psychological · Lack of motivation to achieve · Low self esteem · Improper communication styles Irrational cognitions

Organisational · Insufficient / Obsolete machines & plants · Misfit staff · Faulty structure · Discouraging and oppressive culture Business · Ventures without mission, vision, strategy and resources · Lack of understanding about market needs and market segment · Unfair pricing · Too much dependence on foreign technology & know how · Short term focus · Inappropriate risk taking Management · Inattention to operations · Inattention to quality · Excessive analytical management · Resource wastages · Inattention to human factors · Excessive executive pay · Lack of synergistic relation with vendors, suppliers and customers · Attempt to dominate other management functions · Adversarial attitude towards unions · Excessive attention to legal issues and paperwork · Resistance to change Unions · Insensitively asserting union rights · Featherbedding (getting paid for services not performed) · Rigid job classification · Adversarial attitude towards management · Pay greater than productivity · Keeping output low deliberately Employees · Preference for leisure time · Resistance to change · No pride in workmanship · Poor work ethics · Focus on pay and wages than on work · Improper utilization of wages earned · Self centeredness and tendency to take bribe · Unhealthy habits · Attitudinal problems with work · Laziness, negligence, indifference, arrogance

Productivity

• Classical definition: Productivity is the ratio of output to input. Productivity means that more is produced with the same expenditure of resources.

• According to Bernadine, H.J and Kane, J.S (1993) Performance appraisal: A contingency approach to system development and evaluation.

Effective performance (productivity related) at the individual or aggregated level can be defined according to six criteria.

The most effective employees or work units are those providing the highest possible quantity and quality of work at the lowest cost and in the most timely fashion, with a minimum of supervision and with a maximum of positive impact on co-workers, organisational units and the client/customer population.

• Another conceptualization posits simply effectiveness and efficiency, with effectiveness defined as meeting or exceeding customer requirements and efficiency defined as meeting those requirements at the lowest cost possible.

Contributed by

Sasikanth R Prabhu (November,2002)