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

True Dialogue (Part 1 : a proposal)

In 2011 February we did a public program named “Mind your Business – Mend your Business” in Indore with support of Shri Yogesh Jain of Niche Quality Solutions. Around 15 participants from various business concerns were there and Mr. Akshayakumar Mankad , former head of operations of TATA Motors was there as an observer. The idea behind the program was to highlight that the leaders in the organizations need to be Business focused than organization / product focused and to show that Business acumen is an elusive issue. Fairly the point has been driven into the minds of the participants.



As a sequel to the program we had to visit one of the participants’ Shri Sameer Golwalekar, a multidimensional personality having interests in multitude of subjects. Our discussions wandered into many topics such as world history, Indian culture, Current business scenario, European psychology, J Krishnamurthi etc. At the end of the discussion he presented us with a book titled “On Dialogue” written by David Bohm, Professor of Theoretical physics. The specific choice of the gift was not random, it was after understanding the methodology, intention and service that we provide to the Business fraternity, that he suggested that we must go through this tome.

The book had about forty pages but each sentence was rich with meanings and insights that are unusual to find. I finished reading the book on the flight back to Kochi. The amazement was a Phycisist writing a book on tackling the social issues and an instigation of pride that we hold similar lines of thought. The book definitely enriched our Business Strategy workshops and (We both Yogeshji and me ) thank profusely Shri Sameer for this invaluable gift.

The summary and highlights of the book as I understand is provided in this series of blog. His own words are provided in most of the occasions and I have tried my best not to give my own interpretations. Wish you all an enjoyable read.

David Bohm, while researching the lives of Einstein, Heisenberg, Pauli and Bohr, made a remarkable observation. He noticed that their incredible breakthroughs took place through simple, open and honest conversations. He observed, for instance, that Einstein and his colleagues spent years freely meeting and conversing with each other. During these interactions, they exchanged and dialogued about ideas which later became the foundations of modern physics. They exchanged ideas without trying to change the other's mind and without bitter argument. They felt free to propose whatever was on their mind. They always paid attention to each other's views and established an extraordinary professional fellowship. This freedom to discuss without risk of interpersonal damage led to the breakthroughs that leaders of all sort today take for granted.

Dialogue - A proposal

For David Bohm the word "dialogue” gives an image of a river of meaning flowing around and through the participants. Any number of people can engage in Dialogue - one can even have a Dialogue with oneself - but the sort of Dialogue that Bohm is suggesting involves a group between twenty and forty people seated in a circle talking together.

According to Bohm , Dialogue is a way of exploring the roots of the many crises that face humanity today. It enables inquiry into, and understanding of, the sorts of processes that fragment and interfere with real communication between individuals, nations and even different parts of the same organization. In our modern culture people are not able to talk together about subjects that matter deeply to them. Solution to the fragmented communication, Dialogue is what Bohm proposes.

In Dialogue, a group of people can explore the individual and collective presuppositions, ideas, beliefs, and feelings that subtly control their interactions. It provides an opportunity to participate in a process that displays communication successes and failures. It can reveal the often puzzling patterns of incoherence that lead the group to avoid certain issues or, on the other hand, to insist, against all reason, on standing and defending opinions about particular issues.

Dialogue is also a way of observing, collectively, how hidden values and intentions can control our behavior, and how unnoticed cultural differences can clash without our realizing what is occurring. It can therefore be seen as an arena in which collective learning takes place and out of which a sense of increased harmony, fellowship and creativity can arise.

Because the nature of Dialogue is exploratory, its meaning and its methods continue to unfold. No firm rules can be laid down for conducting a Dialogue because its essence is learning - not as the result of consuming a body of information or doctrine imparted by an authority, nor as a means of examining or criticizing a particular theory or program, but rather as part of an unfolding process of creative participation between peers.

A Dialogue is not concerned with deliberately trying neither to alter nor change behavior or to get the participants to move toward a predetermined goal. Any such attempt would distort and obscure the processes that the Dialogue has set out to explore. Nevertheless, changes do occur because observed thought behaves differently from unobserved thought. Dialogue can thus become an opportunity for thought and feeling to play freely in a continuously of deeper or more general meaning. Any subject can be included and no content is excluded. According to Bohm Such an activity is very rare in our society.