Word of the Year - Word of the Decade

The word "Austerity" has, quite understandably, been voted the word of the year, but with mixed reactions. While we see violent protests in Greece, the Indian reaction was characterised by comical comments about travelling in "Cattle Class" and some symbolic attempts at reigning in the growing wasteful expenditure. As an individual, our reaction to the most important things in our daily lives, is serious in nature. Why, then, is our reaction to most isues affecting the nation, symbolic? 

In your opinion, which word or phrase could qualify as the word/phrase of the decade? I would vote for "Customer Care" - the phrase we see everywhere - on boxes of cereals, jam & pickle bottles, your mobile phone bills, Banks, online stores, Haldiram Bhujia, service centers and websites covering thousands of products & services. The question here is how much of it is just symbolic? 

There was a time when we could expect the best individual attention at a bank (& there is still one bank that I know of where I can always exect the best service at no extra cost!). A decade ago, the worlds' businesses "looked inward" & discovered the large savings that were possible through cost arbitrage. The call centers were born and as of today, more and more services are moving their customer care to call centers.

When organizations choose to move their most important function - that of Customer care - to call centers, then the customer care function is nothing more than mere symbolism. Even if the phrase "Customer care" were actually be voted the phrase of the decade, it would largely remain symbolic.

The Corporate Bermuda Triangle

Continueing from from where I left last........When does an Organination structure become a liability instead of facilitating seamless interaction between various functions? When a structure is decided upon much before the intricacies of activities are understood, it will give rise to what could easily be identified as a corporate equivalent of the notorious "Bermuda Traingle"; unexplained activity (read accountability) dissapperances within loosely defined boundaries. In all such cases, "Bermuda triangles" will give rise to adhoc appointments, that usually end up being permanent, like the ones most of us are already familiar with 

• OSD (Officers on Special Duty) reporting directly to the CMO/CEO/COO
• Expediters at the factory floor with "special powers" to bypass any process
• Favoured lower level employees with substantial funds under thinly veiled expense heads like the "Business Promotion Expense"  to grease the wheels that move things. I have come accross a GM(PR & Logistics) who managed this function with elan. 

While a Functional structure gives rise to functional experts who can offer only futional solutions for business problems, the Bermuda Triangle gives rise to a culture of adhocism and "jugaad"  - creating heroes out of ordinary people.

Where, in your organization, do you see the corporate equivalent of  a "Bermuda Triangle"? A flawed organizational structure could be the one that needs fixing.

What comes first ?

Managers take pride in being a part of a structure that produces results. Every output seems to happen just as planned, with no activity left uncovered. How does this come about?

Some time back, I was a part a discussion that centred around various organizational structures and this discussion seemed to get stuck on what could be regarded as the one that delivered results, consistently.

An organization could decide on any structure or a combination depending upon how each one served its business interests. There are several options to pick from

• A Functional setup with regional reporting for an MNC
• A Project based reporting & setup where the organization specializes in project execution or a R&D arm of an organization.
• A Matrix structure, with business interests taking precedence over functional reporting
• A Regional structure where different products or services may be preferred by its customers. 
• A Business vertical covering Institutional sales, Retail, Governments, Defence sector, Overseas, Special purpose vehicles etc
• Product verticals where the organization approaches its customers with a wide offering of product options for specific customer needs

In all these options, the question is not which is the best one. The question is "what comes first" ?

• What business are we in? (Products, Services, both, R&D organization, Projects....)
• Who are our customers?
• What do they expect from us?
• How do we structure ourselves so that we can deliver what customers expect from us, consistently?
• In a project based organization, this becomes even more critical. Does every large activity in the WBS (Work Breakdown Structure) have ownership in the proposed structure?

Several large organizations are a combination of different "businesses/entities/profit centres" like R&D, Pojects, Operations & maintenance, Post-Sales Services, Manufacturing -(for themselves as well as the industry they are in), but, most inexplicably, have a single structure to support activities with contrasting requirements and approaches.

A Functional structure, while it may work fine for Operations, would fail in an R&D or a project environment. Several organizations have fallen prey to the allure neat looking organizational charts only to get up bruised and rarely chastised.

Such organizations experiment with one structure after another, rarely realizing that it is the nature of their most important activity or work, the markets that they are present in, their customer and their continuously changing preferences, the nature of their products & services or the changed regulatory environment and hence the new customers............. that decide how they need to need to organize.

Coming back to the quation "What comes First" - Is there any doubt?

Power of ordinary measurements

A 5% reduction in manpower, another 5% in inventory, a 10% in travel expenses, productivity improvement (no figures here) and there are many more such arbitrary goals – we have all heard it before and it these are still quite common at most meetings & in Annual Operating Plans.

When faced with such arbitrary (I call these figures arbitrary for a reason) exhortations, how would you react?

1.    Accept and start working to achieve them?

2.    Form focused teams with these goals in mind?

3.    Haggle with the boss for a 7% change and not 10% as demanded?

4.    Grumble how difficult it is to achieve even half of what is demanded?

 Most reactions would be one of the above but none that would demand the basis of such goals.

1.    The methodology used to arrive at these figures

2.    In what way could a 5% reduction in inventory benefit the organization? Would negotiating on supply lead times give us more benefits? Can setting up an offsite inventory achieve benefits several times the one being demanded arbitrarily?

3.    Would a 5% reduction in head count reduce the number of layers from 14 to 6; would the decision making process be speeded up? Would the number of signatures on the approval form be reduced from 8 to 2?

4.    How can a 15% growth in sales be an achievement when the market that we are present in, has grown by 40%?

5.    Any measurement to support such goals?

In one of my previous jobs, an improvement of 10% in OEE (Overall equipment effectiveness) was set, needless to say, without relevant measurements. Our measurements showed that a lot more was possible. A 245% improvement was achieved against a target of 300% that the team had set for itself. To imagine that the organization was actually planning to underperform with an arbitrary target of a 10% improvement!

Any goal that is set without measurements is arbitrary and needs to be treated with the contempt it deserves. Such arbitrary goals have the negative effect of getting the organization to underperform. Managers may channelize entire departments and motivated individuals in pursuit of underperformance.

Keep the measurements relevant, simple and reliable. Measurements will lead to breakthrough achievements. Several such achievements lead to pride; and pride in the jobs that we do, leads to Excellence.