When It's Not OK...

In an organization, multiple stakeholder teams contribute to the many facets of organizational activity. Modern management principles require that each stakeholder group be responsible for the area it contributes to and controls this contribution through well laid out Key Result Areas (KRAs) and Key Performance Indicators (KPIs).

The key assumption made in this type of framework is that each stakeholder is aware of not only its own, but also the roles, responsibilities and dependencies across other stakeholders. The decision makers have their task cut out to orchestrate the activities of individual stakeholders towards realization of organizational goals, both short term and long term. Implicit here is that along with the activities of each stakeholder, the benefits to each stakeholder also have to be balanced by the decision makers.

Invariably, however, balancing individual activities with organizational goals and stakeholder benefits is seldom a simple task. Rather than walking a straight-line tightrope, we usually find decisions and activities oscillating across the ideal balanced state of operations. The end result is that the organization's operations are rarely on the ideal, optimized path. Lack of appropriate and complete information, and uncontrollable external factors could be driving such situations. But sometimes differing importance assigned to each type stakeholders could be playing a sustained role in influencing the direction of these oscillations.

If we look at principle task of balancing the basic short term organizational survival with the long term stakeholder enrichment and growth, we do observe certain decisions that are sometimes taken to ensure short term continuity, and a long term strategic interest of some stakeholder is either sacrificed or foregone. Situations having short term focus would typically drive such decisions. In situations with longer term visibility, decisions can tend to forego overall short term benefits to ensure long term sustainability.

But in today's world of shortening business process lifecycles and dynamic situations, we do see an increased tendency towards short term rather than long term, with the result that some stakeholder interests are sacrificed over others. The impacted stakeholders need to bring this to the notice of the decision makers and good practices of management require that such imbalance be set right. Most of the times, even the stakeholders are fairly agreeable to such short term variations and its OK with them.

But there are times when there could be a deliberate, sustained sacrifice of some stakeholder benefits over some other stakeholder group benefits. Such situations, not only can strike at the very root of long term sustainability, but also at the immediate survival of the organization...then things are definitely not OK!

Though there is no definite solution to such problems, a willingness to take the raging bull by its horns is very often the best way out.

Abstract Business Problems and BPM

The principles of Business Process Management (BPM) can lend themselves beautifully to solve abstract business problems. The methodical rigor it propounds can help in providing good objectivity and quantification to an abstract and subjective problem, provided. As an example, let us consider a case of a company having very low employee motivation resulting in high employee turnover and poor performance issues without having much clarity on the reasons for the low motivation. The essential method of applying BPM principles is briefly outlined here.

Step 1: Define the problem statement: Objectively address the problem of low employee motivation using the principles of BPM

Step 2: Identify the business processes impacting employee motivation. e.g.

• Training and development (adequate, timely, regular)
• Remuneration (as per industry standards, performance based)
• Career roadmap (clarity)
• Performance appraisal (transparent, interactive, fair)

Step 3: Gather objective responses from the target employees on how good or bad are the processes and actitivies being performed by the designated roles. Analyze each individual impacting process, its activities, evaluation factors and and their current state.

As an example, if we consider the training and development process, its evaluation factors and their current state findings could be on the lines of something like:

• Regularity (irregular, no clarity in training program schedule)
• Appropriateness (lack of appropriate training that is relevant to job)
• Adequacy (Inadequate in both volume and expertise levels)
• Timeliness (Not conducted when required for the job)
• Formal / Informal (Informal trainings that lack professional expertise)
• Mentoring (lack of mentoring and guidance)

Step 4: Carry out appropriate checks against each finding. Some BPM driven analytical questions that could be asked for the training and development area could be:

• Is there a formal updated process laid down for appropriate training and development of employees for each component?
• If no, it implies a high amount of arbitrary decisions being taken in that area. There is a starightforward need to define the organization wide processes
• If yes, then further investigate to what extent the process has been followed at an individual activity level.
• Identify each occurence of deviation versus adherence to the process, its individual activities and the roles and then aggregate the results. This would help in isolating that activity - role combination which is not performing as per the process standards.
• Collate the resulting data for further cause - effect analysis. Graphs, charts may be used for visual analysis as well.
• Applying proper weightages to each area can also help rate a process using a numerical score.

Step 5: Repeat the actions for all processes, activities and evaluation factors and then identify the process - activity - role shortfalls.

Step 6: Study and synthesize the findings from each process area and take corrective action. Corrective action may also include designing improved / new processes.

The data collection can be easily done by asking the target employees to respond anonymously to a comprehensive questionaire and obtaining objective feedback on how well were the process and its activities followed for each of the evaluation factor. Modern IT tools are readily available to do the analytical number crunching part.

Thus, the focus on and use of business processes and activities helps to build objectivity in an otherwise subective area. The method may seem to be tedious, but can work very effectively in generating objective data. What remains upto the business manager is the initiative to conduct such an analysis and take appropriate corrective actions. :)

Invention, Innovation and Entrepreneurship

Recently, I saw Pranav Mistry's talk and demo on the Sixth Sense technology on TED Talks. Absolutely mind blowing stuff! It set a lot of mental gears in motion, especially with what he has done so far and his intent to make his knowhow available to others to further develop products for the masses at large. Those 10 minutes triggered a small thought process on who would be an Inventor, Innovator and an Entrepreneur with respect to the technology he has developed. Using a working outline of each role, a highly probable scenario would be as follows.

Inventor: An inventor typically uses available technlogy components and creates a new technology that can be further adopted in creating technologically advanced products and services. Pranav Mistry, no doubt, is a genius inventor. What he has done is so simply beautiful! I am sure many would have thought "Why did I not think of it before?". But does Pranav Mistry go beyond being an Inventor?

Innovator: An innovator would use available technology and inventions and create a product or service that does not exist before and those that can be used by regular people in their day to day lives. The technoogy outlined by Pranav Mistry would now need to be accessible to products and services designers to incorporate into usable products and services. E.g. Mobile phone or laptop designers may be one such group that may use the technology in designing innovative products. In all probability, the role of the innovator could very well be taken up by the product development teams in product designing companies. A person like Pranav Mistri could very well be a part of such innovating teams. The key factor in Innovation would be to apply the invented technology to usable products.

The Entrepreneur: But just designing an innovative product or service is not the end of the story. The entrepreneur would be the next entity in line to carry the story ahead. The entrepreneur would need to look at making appropriate business decisions regarding the business of making and selling the innovative products. These business decisions need to be made in the face of uncertainty and rewards for risks taken. These decisions need to be in areas like:

• Markets to enter
• Target customers
• Production capacity and volume
• Input factors
• Product costing
• And other business management areas.

The flag of entrepreneurship in this case could very well be taken ahead by the operations teams of the companies selling such products. So, the entrrepreneur entity would be the one who can take up the innovative products and build a successfull business out of it by undertaking the risk in making business decisions in the face of uncertainty.

To summarize, I believe the story started by Pranav Mistry has an exciting life ahead and should be full of twists and turns as the innovators and entrepreneurs adopt it and add their bits to it to cater to the masses at large, the dream shared by Pranav Mistry.

Recession, Cost Cutting and Employee Motivation

, mThe recession prevalent for the last almost two years has reportedly been the prime reason where companies across all sectors have resorted to a slew of cost-cutting measures which include sales of assets, travel freeze, employee layoffs, freeze on salary increments, and many others.

No doubt most of these measures are crucial to the well being and indeed the survival of some companies. Companies have gone ahead and updated their corporate policies and implemented the same to safeguard the interests of the shareholders. Unfortunately, the employee as a principal stakeholder is sometimes ignored. There are some peculiar instances where employee related austerity measures fail to withstand the the test of common sense and logic.

As a suitable backdrop for this discussion, let's look at an imaginary representative software services company that has say a annual revenue base of around Rs. 1000 cr with an employee strength of 6500 persons. Lets assume, the salary expense come to about Rs. 550 cr and the PBDIT is about Rs. 250 cr. Lets further assume that this company does not reduce some of its manpower (500 persons) due to performance issues and a reduction in business opportunities. It also announces a freeze on any increments for the two years and a sizable cut in the variable pay of the employees as well.

Now that the economy is looking up, and the stock markets have risen consistently for about 7-8 months, the company is upbeat about the future. The company also maintains and thanks the employees for standing by it in trying times. It also announces employee oriented qualitative measures. But, at the same time, the company maintains the need for continual of the austerity measures in view of a possible economic downturn. The employees are, however, not so upbeat due to rising inflation, the continued freeze in salary increments and cuts in the variable pay. And obviously the employee motivation levels turn dangerously negative due to a seeming lack of congruence in the words spoken and the deeds performed.

Assuming the company's reading about the uncertain future is valid, is there anything that can be done at all to boost employee motivation and confidence? Let's evaluate one possible measure and its impacts, both financial and motivational.

Let's assume the company announces a one time cash reward of say an average Rs 15000 per employee. What is the impact?

1. Financial Impact:
Increase in salary cost = Rs. 15000 x 6000 employees = Rs. 9 cr
Therefore, percentage increase in salary cost = (Rs. 9 cr / Rs. 550 cr) x 100 = 1.6%
Percentage decrease in PBDIT = (Rs. 9 cr / Rs 250 cr) x 100 = 3.6 %
Considering the hardships faced by the employees in terms of rising inflation and other factors, this one time extra cost is quite manageable and even negligible to some extent.

2. Motivational Impact:
The motivational impact obviously is difficult to gauge in numbers, but such a step would build up a substantial positivity in the employee. First and foremost, it bridges the credibility gap between what is said and done. It also sends a correct message regarding the future uncertainty, business austerity and the concern it has for its employees. A cash reward of Rs. 15000 though not comparable to the expected salary increment, is substantial enough to gain the lost employee confidence and morale. With the potential increase in employee positivity and motivation, the corresponding impact on overall business operations and objectives would definitely be far reaching.

To put it concisely, it is well upto the company management to think of such bold innovative steps that augur well both for the organization and for the employees as well.

Providing Business Solutions - Learning From A Doctor

Providing customer centric solutions is a tricky business requiring the solution provider to juggle multiple factors in a unique fashion. Though there are many such factors, a few of the important ones are discussed here, using a a doctor as a very good analogy to explain the good practices of solution providing business.

1. Customer Uniqueness: Each customer is unique, has a unique set or combination of problems, and expects a unique solution from the solution provider. Say, a patient with an ailment of Diabetes fractures his limb and needs to be operated upon. A second patient may walk in with Diabetes and a viral infection. All the three individual ailments and their cures are known. However, in each patient's case, the treatment has to be a combination of the individual treatments in such a way that the patient's ailment is cured. It is difficult to imagine the treatment being meted out for the fracture and the infection without considering the prevalent Diabetes. Hence it is necessary for the business solutions providers to provide a solution not limited to one or a few problems and but consider the overall health status of the customer organization and provide a holistic solution.

2. Expertise: It comes in essentially as two sides of the same coin viz. what has been learnt till now based on past work and what is the capability to apply that knowledge to unique customer problems and solve them. We go to a doctor because we have heard that he or she has been able to cure similar ailments in other patients. But we choose to stay and get treated by that doctor because the doctor treats our ailment in unique fashion.

3. Diagnosis - Separating the Cause from the Effect: A good doctor always listens to the patient's ailment, asks the right questions and conducts the required medical examination to arrive at the root cause of the ailment The good doctor does not treat every patient with a headache the same way. Since the headache could be due to deprivation of sleep, work related stress, unaccustomed exposure to afternoon sun, and so on, each merits a different treatment. In business too, there would be a common symptom like demand - supply mismatch with varying causes like lack of proper IT tools, friction between the sales and production teams, employee morale, high capacity with low demand or low capacity with high demand and so on. Each requires a different treatment.

4. Follow Through: During and after the treatment is provided, the good doctor follows through and checks the health of the patient to confirm the success of the treatment. He or she does not hesitate to change the treatment if necessary.Similarly, a good solution provider should ideally follow through and seek regular feedback regarding the success of the solution provided, and change course if required.

These points do tell us what the good solution provider would do. But it comes with a caveat. The customer needs to be a good patient as well. As a good patient selects the good doctor and entrusts his or her health to the doctor, the customer organization would perhaps do well to do its groudwork in selecting the right solution provider and then trust it to deliver the solution agreed upon!