Thanks
to Globalization, Reforms, Technological
Development, New Products innovation,
and changing Customer Preferences
and Buying Behaviour, organizations
are facing newer challenges year
after year. The internal pressures
of efficiency, external pressure
from competition and customers are
driving organizations to look for
ways and means of achieving growth
and profitability. Many organizations,
all over the world, have embraced
many change initiatives that they
thought fit in the past. Clearly,
though some of them are still relevant,
quite a few of them are not.
Gearing
up an organization to meet the challenges
of today’s competitive environment
isn’t going to be easy. It
may not be too difficult for any
one to realize that the Change Initiatives,
organizations imbibed in the past
are insufficient, given the current
environment. Not only are the Change
objectives going to be different,
but also the Change strategies.
It is therefore, obvious that the
transformation process and methodologies
will have to be thoroughly thought
out to suit the new scenario.
What
better inputs could there be, for
the think tanks of the corporate
world than learning from their rich
experiences? It would be a real
tragedy if the leaders or the champions
of Transformation Management do
not learn from their successes and
failures. It is essential that they
leverage their rich experience consciously,
while crafting their Change Strategy
for the future.
For
a greater part of the last decade
“Change is the only constant
and everything will change'”was
the platform on which most organizations
launched their Transformation process.
Although the journey yielded benefits,
it also highlighted the inadequacies
in their approach. In fact, in retrospect,
'reactive' is the only way to describe
the Change Initiative response of
the corporate world to environmental
pressure. If one looks at the performances
of most of the corporates of the
developed and emerging economies
in the past 12 to 15 years, one
can clearly notice that both Top
and Bottom lines have travelled
from the low to high, and back to
low, or the other way around, thus
completing almost one full cycle.
However, one should discount a few
select companies or sectors, which
are in the infant stage for the
purpose of this analysis. However,
wisdom seems to have dawned, with
the business cycle completing a
full circle.
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Historically, the Economy, Market,
Customer and Profit are the four
factors that have determined organization’s
response to challenges. An analysis
of the different ways in which organizations
have handled Change & Transformation
over the past 10 to 15 years provide
a fertile learning ground with lessons
that could impact the way we prepare
for the foreseeable future.
In
this period, the business performance
of various industries as a whole,
with a few exceptions, seemed to
have followed a pattern.
On
the basis of this pattern, one could
divide this period into five distinct
eras –
The
1990’s were easily the most
significant period of the decade,
in more ways than one. The economic
and political crises, many developed
and emerging economies experienced,
eventually led to the beginning
of the inevitable economic liberalization
process. For the first time, captains
of industry really considered globalization
as an opportunity. The industry
perceived a promising future and
the market was booming. The customer
base was expanding and companies'
bottom lines were impressive. Optimism
was in the air.
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CEOs
and owners were fascinated by the
gold mine of opportunities. Suddenly,
the sky was the limit.Captains of
industry were convinced that they
should articulate their long-term
desire. Consequently, the top management
of big, medium and small corporates
all over the country undertook a
host of exercises. They churned
their ideas and collective perspective
to give shape to their desires or
dreams for the future of the company.
We saw Vision & Mission statements
in their receptions lobbies and
their product brochures.
The
positive impact of this was the
inspirational effect, it had on
employees. They started thinking
BIG, perhaps for the first time.
What did not happen, was the follow
up action. The “ vision and
mission” remained on paper.
There seemed to be no attempt to
steer the organization towards translating
the vision to reality. The result:
skepticism..
It
is essential for an organization
to have a clear vision as it drives
people towards achieving higher
goals. It is equally essential that
the Strategic Goals are re-examined
for their relevance to the shared
vision and policies are evaluated
for their fit with the values defined
by the organization.
The
years 1992 - 94 witnessed incomparable
economic buoyancy in most developed
and emerging markets. The market
was full of opportunities, as customers
were eager to buy everything that
came into the market. This showed
in the healthy bottom lines of manufacturers.
The
industry leaders were quick to understand
that the best way to cash-in on
these opportunities was to energize
their employees to perform to their
full potential. This meant changing
their attitudes and building skills
to help them accomplish more. There
was a sudden spurt in training programs
on Total Quality Management, ISO
9000, Quality circles etc. involving
employees at all levels across functions.
The
impact was indeed positive, as the
changed orientation made employees
realize the importance of learning
and skill up-gradation to keep pace
with the industry. However, one
was not sure if the changed mindset
and increased skills were properly
channelled to give significant tangible
benefits commensurate with the invested
effort.
It
is possible to unearth hidden talent
in the organization and to motivate
employees to see the bigger picture.
There is no alternative to the continuous
up-gradation of the knowledge and
skill levels of employees. However,
training should have a purpose and
focus, if the added skills and knowledge
are not to be wasted.
The
years 1995 –97 were the years
of realities. Available opportunities
attracted more national and multinational
players into the markets, making
them truly competitive. For the
first time, customers really had
a choice in most markets. Producers
finally realized that they didn't
just have to sell goods but market
them as well. Most organizations
understood that market success depended
on providing solutions to customer
needs / problems rather than merely
selling the product. Stagnating
bottom lines were a clear indication
of what the future had in store
for the industry.
The
organization witnessed, perhaps
for the first time, the marketing
team becoming the true custodian
of the customers. One could see
the effect of their vociferous voice
for improved Quality, Reduced Cost,
Increased flexibility etc. There
was a rush to get customer surveys
done to drive their point home.
Service Quality was the newfound
topic of discussion in all management
forums.
Customer
expectations became an overriding
priority for the organization. People
learnt to respect the customers’
views; understood how easy it was
to lose a customer. New product
introduction and continuous improvement
in product features became organizational
strategies. However, not many organizations
could pull their acts together,
and convert their intentions into
action.
It
is clear that customer satisfaction
is a dynamic phenomenon; its periodic
measurement should be an institutionalized
process. It is also essential to
revisit systems and procedures frequently;
more importantly, decision-making
authorities should align with customer
demand instead of following their
own agenda.
1997
– 99 saw the clear sign of
an economic slow down. The expanded
capacities created by existing and
new entrants, expecting growth in
demand, resulted in a heated market
place. Customers seized the opportunity
and became very demanding. This
resulted in shrinking bottom lines.
Having
been caught on the wrong foot and
seeing their calculations going
haywire, the role of corporate planners
became unenviable. Questions from
all quarters about their assumptions,
predictions, their relative strengths
and weaknesses forced most organizations
to rethink their Strategy decisions.
Consultants were called in to help
organizations with Strategic Analysis.
Predictably, organizations introspected
and tried to understand the key
success factors in the industry,
their own core competencies and
then the gap or mismatch. Demoralizing
and difficult decisions such as
right sizing and restructuring became
the order of the day.
The
biggest gain for the corporates
was that they finally understood
the usefulness of Strategic Planning.
The top leadership realized the
inadequacy of their decision making
process; learnt that their role
is actually to assess uncertainties
and take calculated risks to be
winners in the industry. Almost
every organization realized the
need for a constant review of their
Strategic Decision making process
and taking timely decisions, however
uncomfortable they might be emotionally.
They also realized that deployment
of Strategy is as important, if
not more, as crafting a right strategy.
Strategic
planning and analysis is no longer
a luxury or an intellectual exercise
but a business compulsion. It is
critical to deploy the Strategic
decision. The process of deployment
decides the success or failure of
the decision.
The
era of desperation saw economic
indicators touching a new low. There
was chaos in the market place, with
customers preferring to delay their
purchases. The result: organizations
grappled with shattered bottom lines.
Every
organization did what it thought
was under its control. There was
a clear message to everyone to follow
austerity measures and predictably,
employee related costs were the
first on the casualty list. One
saw a host of mergers and acquisitions,
down sizing through Voluntary Retirement
Schemes and Business Process Reengineering
exercises to boost efficiency as
ways to keep costs under control.
There
was widespread agreement on the
need to significantly improve efficiency
levels and though they rose, they
were not to the level desired. On
the flip side, there was an air
of resigning to fate even at the
top management levels.
It
is better to keep calibrating the
efficiency parameter at all times
and not only during down turn. Managing
the cost cutting exercise without
affecting morale is an art and vital
for preparing the organization for
better times.
An
uncertain economy and non-committal
customers would lead one to believe
that economic indicators can only
rise after bottoming out. With only
the fittest players surviving, products
can be sold at reasonable prices
and still make a profit. In short,
there is hope that things will improve.
Many bold and perhaps reform decisions
by Governments helped in reviving
the market and sentiments of most
economies.
It
is certain that organizations will
attempt transformation led by measurements
so that they do not repeat their
earlier mistakes. People are already
doing or talking about E RP, Balance
Score card, Hoshin Planning, Six
Sigma etc, all of which stress the
importance of measurement and course
correction.
It
is difficult to say what organizations
will learn from these methods of
transformation. However, one thing
is certain and that is: measurements
will have to be holistic, taking
into consideration all stakeholders’
expectations. In fact, measurements
should address the efficiency and
effectiveness of the process parameter
to achieve better Top and Bottom
lines rather than measuring just
the Top or Bottom line.
Tough
times lie ahead for Change managers
as they try to change the mindset
of people who can relate only with
Top and Bottom lines. However, if
they leverage the learning from
the last decade it will be difficult,
but not impossible, for them to
achieve their task. The new age
organization, with significant experience
and insights gathered from the past,
will then look forward to new vistas,
with renewed hope.
