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Optimizing operations | It’s time to turn flab into muscle

Optimizing operations | It’s time to turn flab into muscle
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First Published: Tue, Jun 23 2009. 12 30 AM IST

Deepak Malkani
Deepak Malkani
Updated: Mon, Jul 20 2009. 03 07 PM IST
Deepak Malkani
The last year of economic upheaval has taken organizations on a roller-coaster ride of fast- moving crises and opportunities. Struck numb by the speed of the crises, many organizations worldwide and in India responded with workforce reductions. Arguably, through hasty and indiscriminate action, many of these organizations would have lost high-potential talent, critical capabilities, knowledge and relationships, resulting in a diminished ability to compete successfully in future.
This is not to suggest that organizations should always live with oversized workforces acquired over years of economic growth and excess. Indeed, a large majority of Indian organizations are in need of a critical re-examination of their workforce productivity, that is, how much economic output they produce per person. However, workforce actions need to be taken with a deep understanding of that magic ingredient that powers growth and innovation—human capital.
Some forward-thinking organizations have used the economic downturn as an opportunity for serious introspection. They have turned the lens of inquiry inwards to examine their own organizational structure, how their business processes are executed, how talent is developed and their operating model, that is, how they deliver value to customers. Exercising these fundamental levers of workforce productivity can turn the untapped potential in an organization (flab) into productive talent (muscle).
Jayachandran / Mint
Organizations today have the ideal opportunity to develop leaner structures to optimize their operations. Over years of expansion and exclusive top-line focus, many Indian organizations have grown like amoeba, without adequate thought to the identity and role of their centre. “Entrepreneurial growth” has resulted in a replication of processes and skills in different geographies, business units and locations.
The shared services concept, well developed in many global multinational firms, is a powerful golden mean. It entails a careful identification of processes which can derive scale and skill synergy through consolidation in a central organization, while enabling high-quality response and service to business units and locations through robust IT systems and service-level agreements.
A recent example: A large Indian pharmaceutical organization had created two distinct supply chain organizations, one for its Indian business, another for its global operations. Undoubtedly, these two supply chain organizations served different market needs, but required common skills in sourcing, logistics and planning, managing common production facilities and often buying from the same vendor base.
Detailed analysis and introspection showed the opportunity to create a unified supply chain organization with distinct responsibilities for managing the front-end customer interface, but with an integrated back end. The company saved 15% on its cost base in the short term.
As organizations grow, process inefficiencies of many forms naturally creep in. Duplication of effort at multiple levels or in multiple departments is a common malaise. For instance, a large consumer products organization was conducting a 100% check of expense claims submitted by its sales force in the central sales organization and its finance team. The dual 100% checking was 100% redundant.
Equally common is the issue of transactional activities being done at senior/strategic roles in the organization. For example, the brand management team in another pharmaceutical organization spent 50% of its time on admin tasks—MIS (management information system) compilation, gift-vendor selection and coordinating logistics for field force inputs.
A company whose managers actually do transactional work will suffer from higher costs and lower efficiency of transaction completion and accuracy. In addition, recruiting and retaining top managerial talent is difficult. Recognizing these real issues, the company redeployed these activities to a differently skilled transaction support team—thus enabling a refocus on strategic brand management activities and higher sales.
Over years of expansion and exclusive top-line focus, many Indian organizations have grown like amoeba, without adequate thought to the identity and role of their centre. Ahmed Raza Khan / Mint
The role of learning and development, or L&D, is often underestimated and under-invested in organizations. An effective L&D strategy and function can significantly enhance workforce productivity by accelerating time-to-competence and time-to-proficiency of new employees, improving output of the proficient workforce and reducing employee turnover.
New ways of learning and sharing knowledge through collaborative technologies can have a huge impact on how people connect and learn at lower delivery costs. A large consumer organization reviewed its learning and development strategy for its sales force—hitherto focused on traditional centralized classroom models of delivery.
An analysis of the training days spent by the sales force —across induction, boosters and product launch training—showed potential to change the days spent in the classroom from 26 to 18 per year. Select aspects of induction and product technical training were channelized into more effective e-learning and self-learning job aids, delivered at point of use and need.
An important lever of productivity is an organization’s operating model. These are fundamental questions that every organization faces—what part of the value chain should I operate in and how? How do we deliver value to customers and differentiate ourselves from competitors? What do we do uniquely well to add this value? What should we get done from other service providers?
A leading Indian electrical products organization with a nationwide presence undertook this soul-searching into its sales and marketing function. Factors considered included internal productivity, existing skill base, ability to retain skills and cost-to-serve.
As a result of this introspection, the organization appointed a single, national, after-sales service provider to provide dealer training and central repair services, and outsourced its customer contact centre. Precious management bandwidth was refocused on design, branding and sales.
Many organizations wish they had a crystal ball to know what the future holds. When will the economy revive? How sharp will the recovery be? However, it is more critical today than ever to examine the fundamental aspects of how we organize ourselves, how we execute our business processes, how we develop and motivate our talent and, most importantly, how we deliver value to customers.
For in answers to these questions lies the path to enhancing workforce productivity, the true engines of our growth and prosperity.
—feedback@livemint.com
Deepak Malkani is a partner with Accenture India and leads the talent and organization performance practice in India. He is based in the company’s Mumbai office.
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First Published: Tue, Jun 23 2009. 12 30 AM IST