Hopes Alive in Change Management

Through our strategy workshops we try to unite people in action (build social capital).  We are able to do that, but we find it difficult to sustain the initiatives undertaken as part of the program (especially the customer visits and new market identification). People have

a tendency to relapse into their individualistic approach to jobs, and they remain operations focused than business focused.  We are very much aware that a poorly led change initiative can inflict disorder on a business unit or the entire company. Sluggish initiatives can breed sarcasm and damage the top management’s and our credibility, and can jeopardize future change initiatives. We are very concerned in preventing change failures. 

Failed initiatives have happened in some of our facilitation midway. As we are a research based consulting, we delved deep into the issues related to initiatives and improved our delivery systems to overcome the inertia of change. In the process of analyzing the cause for change-initiative failures, we also recognized that the business leader’s courage matters most in making the change successful.  There is no substitute for this ingredient, and we have to depend on the leadership level of the client company. Places where we have strong leadership at the top, our strategy facilitation is smoother.   Resilience, patience and trying out until the goal is reached, are the three attributes we expect or want from the top team to implement changes in business strategy.  We are constantly working on developing and nurturing these characteristics in our client’s team.  Even a small breakthrough in change management can give tremendous outcomes.  . We recognize that  leading initiatives is not easy,  but we have identified a few effective principles, that change initiatives stand to  survive the most common vulnerabilities. That is emerging as our strength. 

Contributed by Sasikanth R Prabhu, Marg Atreya

Focus and Strategy

From visits to various organisations, we have observed that many organisations are like alcoholics..... Alcoholics find it difficult to leave their drinking habits. Similarly, organisations too cannot leave their habits of clinging to operational silos. Daily urgencies and crisis are expected, attended and promoted than the important activities of business. Business connection is lost in many the organisations.  Operations are meant to drive business, but operations, in course of time, engulfs business and the very purpose of business is hijacked. We bring this anomaly to the notice of the key players of business. Even being aware of this predicament , the people in the organisation cannot get out of their habit of fighting daily urgencies and crisis.

Many say we need to form business strategy, but there is no time. they often say ... Let us finish this project and then we shall sit for forming business strategy. Most business owners and key players fail to take action on strategy but keep on continuing their operational routines.

Second factor that hinder the wished growth is the lack of clarity about overall strategy We have lost count of cases in which well-intentioned project managers waste their time and energy on initiatives that senior managers felt, this is not our priority, even when the same senior persons have approved the initiatives.

Still another observation is that ,  lot of good companies waste enormous amounts o resources on too many projects that had too little focus.

Our business facilitation workshops attempts to overcome these problems by establishing shared awareness and focus of the business. 

Disorder in the Questions: asking the ‘How?’ sooner

When we go for marketing calls to sell the service of DNA development for the businesses, I make a single statement to make our point i.e. ‘we help the companies to grow from one level to next level’.  As a response to this, often we get back a question ‘How do you do that? ‘.  Also we get other questions that are closely related to the disorderly question “how do you do that? “. Some of them are ‘How do you get from here to there?’, ‘Where has this worked?’, ‘What would this program cost and what is the return on investment?’. ’ How do we measure it?’ etc. We prefer to call this question disorderly, because it beats all the creative and productive purposes. The question creates a subtle aura of cynicism or contempt. It indicates something such as “ We have been doing it all these years, how can you be better than us” ,  “We know it all , let us see if you can tell us more than we know, which is impossible”,  etc.. It is also a defense against taking action, as it implies that let us know clearly that it will yield what we want then we shall act.

Thus the How? question is a defense for the stubbornness to act for change or even to think differently. It is an indirect expression of doubt, more on to them than on us.  The How? question also seem to be a habit.   Business owners who have strong habits of pursuing what is practical and doable, tend to ignore larger purpose and impacts. We are astonished to watch frequently that when some business owner’s initiatives do not work, they simply try harder. When they are trying to control a business and it is failing, then they doggedly do more of what is not working.

The How? question also promotes an illusion of speed such as the world is moving fast now a days  and there is no time for thinking and emotions; At any cost we must do all things fast. Of course, we need to do things fast what needs to be done. What need to be done: ‘the business’ is often forgotten.  Instead the organization mindlessly pursues to meet the mechanical objectives. This mindset, of going only behind what works, is the biggest hurdle to sustainable business growth. We attempt to break this mindset very early in our interactions and that puts us in the risk of being expelled from the premises. But that is the hazard of business facilitation job. We need to put up with it.

Each time business owners / managers try to get answers to the question How?, they get answers such as .. do Lean management, do six sigma, do 5S, do 360 degree feedback, do balance score card, do leadership training etc etc. All seem to have not yielded what was expected if not failed. Still organizations resort to such programs every now and then with a hope to solve their fundamental issues.  Often How?  question fails because it is not the right question and secondly the answer comes out of someone else’s experience. It is difficult for any business to live on the experiences of others regardless of the meticulousness with which the answer is accepted.

It is not that we propose a blanket ban on the How?, it is only that we persuade the business owners/ managers to save this question for a  latter period and that there are more important questions to be asked before the How?. Getting the questions right at first is the best step. We facilitate to make them ask right questions.

Contributed by Sasikanth Prabhu

Strategy during stressful times.

Recently we had to stall our Business strategy workshops (DNA Development) in one of the reputed company which serves as vendor to an Automotive OEM. The strategy development process is stopped because the company is undergoing distress in terms of increased costs of production, cut in orders from the customers, lower productivity etc. The company was also preoccupied with negotiations with labor for a renewed contract.  All these put together may take toll on the long term strategy. ‘We need to survive first, to think for future’ that is the principle chosen by our client for the moment.  Logically this mantra seems right but has very limited value.

Impulsive reactions to problems, across the enterprise cost-cutting, failures of leadership, lack of clarity, misunderstanding of risk and ignorance of consequences, are all common strategic failings during stressful times.  Typical actions during such period as we have seen is that, all activities centre around cutting costs and raising cash (by loans, by brisk debt collection or delaying payments to creditors). Other ways are – reducing salaries, renegotiating contracts, selling assets, closing a plant, or even reorganizing the entire plant. Business owners or managers who make these decisions seem to be making a critical error. A majority of companies’ cost-cutting measures fail to deliver the savings expected. In fact, half of all cost-cutting schemes are aimed at delivering incremental savings of less than 10% of costs.

Most ‘reduce - cost’ decisions have limited effectiveness. There is genuine concern that more invasive cost-cutting decisions designed to deliver short-term benefits often harm the long-term competitiveness of the company. The key to effective cost cutting is to know the business and its outcome.  That outcome should be in line with the organizational actions we take. Even if a cost reduction attempt is considered essential to survival, simply looking for percentage cuts across the business is likely to lead to a reduction in a business’ competitiveness.   The Business owners / managers should have strategic outlook on cost savings and it should be available for dialogue.

Applying a cost-cutting mentality within existing strategies (if there is one) can deliver not only sustainable savings but also help advance strategic goals. For example, it’s often assumed that cost-cutting and customer satisfaction – a common strategic objective – are mutually exclusive. But if there is an existing supply chain strategy in place, it makes sense to identify which processes are not directly related to improved customer relationships – then look to cut costs or refocus those activities.

Though we supported our client who suspended the strategy discussions in passive way, our answer to this problem is to address strategy in simple, relevant ways that keep business owner / key players focused on the business of the company (strategy), while delivering clear courses of action to survive in turbulent times and grow at the same time.  This need for maintaining a strategic approach is critical, which means looking clearly at business in clear ways, then analyzing how long-term strategy can be maintained in a depressed situation. Business owners / key players who have a mindset to make reasoned decisions based on the solid strategy will do a better job of securing a winning future of their business, as well as their survival.

At times of economic upheaval and low availability of finance, there’s a real danger that

the strategy can take a back seat to survival. But organisations that abandon strategic thinking not only run the risk of undermining their chances of advancing their business when the economy improves, they also endanger their ability to weather the storm.

The key to ‘strategy under stresses is discipline – business discipline !

Contributed by Sasikanth prabhu

Profit and Profitability

Many incidences we have faced in our strategy workshops, where we have to explain the difference between profit and profitability. Yogesh Jain of Niche Quality Systems Pvt Ltd, who is partnering for the DNA development service in Indore region has witnessed most of the confrontations related to profitability.

The question, what is the aim of doing business? Elicits an immediate and instinctive answer… ‘to make profits’ from most of our workshop participants.  Anything other than profit seems to be unthinkable for both business owners and managers.  This is the point where we struggle most to make the key players of the business think beyond profit.  One aspect that we push them to go beyond profit is ‘profitability’.

When we say that ‘profitability is healthier measure of business than profit’ is not welcome by most of the business owners, partially because they do not understand the difference between these two and due to the sentimental attachment they have towards the term ‘profit’.  

Why this strong sentiment?  We feel …….because everyone in the company pays attention to profits. Most of the key business teams have a revenue / budget / profit plan, each department / functional head owns an important element of that plan and progress is watched closely by them in the review meetings.  All managers work strenuously to meet these targets. Yet, even if each manager meets the budget targets, the company seems to be a lot less profitable.   

I remember sitting in a review meeting of a distribution company several years ago. The business owner of the company sat at the head of the table and looked at the four to five managers sitting on both sides of the table. Each manager, in turns began..’ here are my numbers’……. After presentation, they had discussions on implications of the numbers presented and finally all adjusted their numbers and a consensus was reached. This was the half yearly plan.   

In the following quarter the Sales manager grew the top line and met his quota. An additional sale came from new customers who ordered frequently in small amounts. The gross margin on these orders did not cover the distribution cost. Other customer ordered products that were out of stock locally and had to be couriered from other regions.

Two things were noticed in this situation. First both the Sales manager and the Logistic manager were on target; the sales manager grew revenues and the Logistics manager met his target because his budget was based on an average cost that allowed these inefficiencies with a hope on future business. Even though these managers met their numbers they failed in managing the profitability.

Second, these uncommon sales and orders could have been made much more profitable through some very simple business oriented twists, which would have benefited the customers as well as the company. These twists require only a business acumen and execution - not extra financial capital. Our strategy workshop highlights this point to a large extent.

As a discipline, we need to see Profit and Money as two different things. It is certainly possible for a firm to make a huge profit and have no money. It is equally possible that company is flush with funds but is suffering from losses.  What happens when an organization shows a profit?  There will be a line of people standing in a queue waiting for a share of profit.  Some organizations get into trouble because they don’t make profit. And others get into trouble because they make profit.

But successful businesses stand on two pillars. One: the ability to generate profit. Two: the ability to manage cash flow. Managing cash flow is very much related profitability. But this is missing in most of the companies… profitability is unseen and unmanaged!

 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

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)

Building Social Capital - the collective feeling of 'We'

When we interact with the organisations in the initial phase of our facilitation , it most often becomes evident that people in the organisation build their plans and strategies of business on the assumption that others in their firm are ready and willing to be team players, act collectively to create or achieve something in the future for the organisation.

The observation, however, is that most often the organisation operates in a fragmented way. The technical people are pulling the resources in one direction, the marketing guys demand better attention to their requirements, finance have seemingly lopsided approach to their allocations and HR brings their own issues unconnected to business. The very resources meant for growing the business are pulling it apart.

In spite of these experiences, organisations are in the habit of assuming that once a good strategy is evolved at the top, people in the organisation will readily act, participate and contribute in a focused way according to the new found strategy.

An orchestra that is ready to play the same song does not come into being naturally but have to be worked out. Similarly every organisation has to create a pre-condition of shared understanding and shared commitment as they build the strategy. This is what is building ‘social capital’. This capital is the most prominent for a business organisation in the modern scenario and is even more scarce and important than the financial capital.

It is quirky to identify and create collective feeling of what “we” (i.e., the firm) should do if there is no strong sense of “we” – a mutual commitment and sense of group loyalty and cohesiveness. Similarly, it can be meaningless if the members of the firm are not committed to go on a journey together into the future.

Most organisations are clueless on how to create such feeling of ‘we’ the collective intelligence or the social capital. One attempt by many organisations to build social bonding is to celebrate the birthdays / anniversaries of the employees or having cultural get together etc on occasions of public festivities such as Onam, Christmas, Diwali etc. Secondly, on encountering inter-departmental turmoil, interpersonal conflicts and other employee behavioral issues, mostly companies resort to training programs on team building, leadership, communication skills, interpersonal skills, etc to the employees. Even after several training programs the conditions in the organisations do not improve which leads to cutting training budgets, snipping certain employees (even though they are valuable to the business), restructuring the organisation, abandoning the attempts to improve with ‘we-have-to live – with it’ attitude etc.

Actually there may be nothing wrong with the employees or with strategy or with the intentions of the business owners. The fragmented functioning in the organisation is somehow subtly connected with the view of ‘big picture’, a shared understanding and the commitment of the people in the organisation. These three are essentials for an organisation to work effectively. Training is not the solution, neither impersonal communications aides such as bulletin boards, manuals, sign posts, websites or awareness building programs. Top management fiat also is not effective in this situation.

But it is possible to develop a social architecture suited for each business / organisation. The only way known now is to lubricate the wheels and gears of existing social system. The traditional meetings need to be converted into animated dialogues. A facilitator who has the knowledge and skill of handling the group dynamics may be engaged to bring together the diverse stakeholders and facilitate to bring out the shared understanding and commitment. Engaging a facilitator for organisational planning is quiet unconventional, but it is needed and there is no other way known how to tackle the organisational fragmentation.

contributed by Sasikanth Prabhu

Remembering C K Prahlad

full name : Coimbatore Krishnarao Prahalad

native town : Coimbatore , Tamilnadu, India

Higher education: University of Madras (Physics)

First Work experience: Branch Manager Union Carbide (Battery Division)

Doctorate: Harvard university

Faculty position : University of Michigan's Business School, Ann Arbor

Intellectual Partner: Gary Hamel

Results of partnership: The book 'Competing for the Future (1994)'

other books :

The Future of Competition (2004)

The Fortune at the Bottom of the Pyramid (2004)

His own words: the world's poor (the 'bottom of the pyramid') as a potential untapped market for companies, worth anything up to $13 trillion a year. "The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers. It is the billions of aspiring poor who are joining the market economy for the first time" he explains. A market at the bottom of the pyramid could be co-created by multi-national and domestic industry, non-governmental organisations and, most importantly, the poor themselves. They would then have choice over their lives and the products they use.

His vision for India : India @ 75 http://www.indiaat75.in/about.asp

Awards from india : Lal Bahadur Shastri award for Excellence in Management (2000),

Padma Bhushan (2009)

offering tribute to this great academician, thinker and strategist. three profound concepts come to my mind, contributed by him: Core competence | Bottom of the Pyramid | Co-creation

his vision shall live for decades

you can listen to C K Prahlad here......

http://www.youtube.com/watch?v=03bHlsunYe8&feature=player_embedded

contributed by sasikanth prabhu