Paul Mracek is the CEO of Kotan Australia. He is a 7th degree Black belt holder in Martial arts. He has 25 years of experience in Asia, Europe, USA and Australia in leading multimillion dollar companies and building successful businesses. He is also an author of several books on success and business, balance and how to apply ‘success mindset’ to any part of life. Paul is a Master coach and practitioner of NLP, TLT and Hypnosis. He is a Chartered Professional Engineer, Fellow of Australian Institute of Management, Graduate of Australian institute of Directors. Paul works with a few companies in India. Theindianmanufacturing.com caught up with him during one of his trips to India to get his views about ‘Managing Costs in the new normal environment where the growth is not very high’. With experience in business environments on different continents, Paulis the right choice to talk about this subject.
Managing costs in the new normal environment where the growth is not very high.
There had been a big change in India in the last 2 years. Most of the Companies have experienced either ‘no growth’ or ‘low growth’. This is quite different from the previous 7-8 years when the Indian Manufacturing experienced healthy growth. Companies are struggling to readjust to the new normal.
The Indian Manufacturing.com (TIM) :What are your observations about the Indian Manufacturing companies in the last two years when the economy had not been doing very well?
Paul Mracek (Paul) :Indian manufacturing companies are suffering from similar pains as those companies in other countries when the normal growth rates they are used to are no longer happening. They are seeing their profitability and sales go down quicker than they can adjust to the market conditions. Customers are being cautious and not holding as much stock as they have in the past due to the tough financial conditions that all countries are struggling with. The lack of money in the market is affecting both private and Government spending and creating uncertainty in people’s minds, so they are delaying spending money where ever they can.
All the companies are looking to try and take cost out of their businesses, look for new or different markets and products, which of course takes money, time and resources. While at the same time competition has become harder and prices falling that impacts further profitability.
TIM :How do you think they are coping with the cost of operation?
Paul :They have not been used to managing their cost base as efficiently as they could and in proportion to the demand or volumes to match. They have not been used to managing their cost base as efficiently as they could and in proportion to the demand or volumes to match. Labour has always been seen as a small cost and not that well managed, by this I mean they tend to have 20% more people than really needed if the operations where set up to match the demand properly. The challenge with constant growth is that the additional operations, machines and people are just squeezed into the existing space (footprint) as best can be done, rather than necessarily being re-planned from the start again to get the best efficiency and cost base. When the volumes drop this then becomes a bigger cost burden or anchor to the business.
TIM :How to become cost competitive to face the global environment?
Paul:Lean manufacturing to take out waste and Six Sigma for quality to take out variability become even more important in these cases. Quality and Cost are not just differentiators for business anymore they are pre-requisites for staying in business and keeping customers, especially in a more competitive market. Delivery and Service are the deciding factors in my opinion what will make your business standout from others in the market place. Customers don’t want to hold stock, because it costs them money and profit…so they are looking for suppliers to be able be more flexible and make and deliver products quickly as demand changes. Service is your ability to be able to be exceed your customers’ expectations and be one step in front of them in providing product and services that they can trust and give them no extended or ongoing issues. This is looking at the whole of life cost for them to supply the products to the end customer or user.
TIM :Can you give some good examples of Companies who are managing their costs very effectively?
Paul:The companies that manage these factors effectively and are flexible enough to adapt quickly are certainly the ones that are going to survive and grow into the future. They are also looking to continue to invest into the knowledge base within their companies, i.e. to train their people and to find ways to effectively use technology to support. This doesn’t always mean automation, rather ways that they can cost effectively find the right balance with their existing workforce. Rather than talk about specific companies I would indicate that it is more to do with specific market segments, for example Automotive, Petro-Chemical and pharmaceutical are usually operating with this mindset.
TIM :Raw materials are the biggest cost in the P&L of most of the companies. Can you give some insights about managing these costs?
Paul:Yes raw materials are normally a large part of the cost of product and doing business. As many companies in the past have found, constantly pushing prices down with suppliers can back fire and your business ends up suffering. Certainly you need to get the best price, however if you are both not making profit then there is only one thing that will happen, you will both go out of business. The best approach from my experience is to be open and get your suppliers to be active in your cost reduction programs and help them so they can help you in providing new ideas on different designs, materials, supply options, stock levels, terms and of course costs. They generally have more ideas than we think which can have substantial impact on your costs and profitability.
TIM :People costs are perhaps the next biggest in most of the Companies. How do you think Companies can manage these costs?
Paul:From my experience most companies don’t do this well, unless they have some training in method time measurement and workplace and tool design. On average as I mentioned before they have around 20% too many people. In addition the participation or engagement levels by employees is far from ideal with at least 1 in 3 doing enough just to survive; meaning that they are not actively looking to improve their performance or that of the business. Establishing standard processes and training people to use and stick to them is a great first start, this allow companies to easily calculate the number of people they need based on the changing demand levels. The next par to look at engaging their people better so that they are more productive…through training and coaching of the key supervisors and managers.
TIM :The White collar productivity or the productivity of Staff is a subject that is not addressed by many of the Indian Manufacturing Companies. What are your views on this subject?
Paul:Absolutely this is a big area of opportunity I have seen in Indian companies. There are many that are operating with what I call the old school method, of just do what I say…and don’t listen enough to what their people are saying. The risk with this approach is that you disengage one of the biggest resources and cost within the business. Like machines you have to do maintenance with your people and this is the role of the white collar staff in the business. Telling people might get you the quickest result, or at least that this the thinking however it doesn’t mean that you get the best and most cost effective outcome.
TIM :I observe that Staff in Australia or USA or Europe tend to be much more productive than those in India. What do you think are the major differences between the Staff in these countries?
Paul:Yes and no, I have seen both more and less productive staff depending on the country and industry that we talk about. I think that one of the different key drivers for overseas companies that certainly drives a different perspective and constant looking to improve the performance of staff is the cost of people. This is a lot higher in Australia, Europe or Europe, for example on average it is around $18-$20 per hour base rate and then with statutory charges this can go up to $35-$40 per hour for the company. So there is certainly an incentive to get the most out of the staff that they have…and not to have too many.
Therefore the companies see the need to have coaching and training of the people as it pays by impacting the company bottom line.
TIM :Profitability of 10-15% is what an Indian Company looks at / aspires for.. Do you think these are reasonable targets and what is the profitability of Manufacturing companies overseas?
Paul:I think that the 10-15% profitability targets are reasonable targets as a minimum, after all the other option for returns on capital are to invest into the share market or with banks and they need to be competitive with them. The better companies overseas are looking for returns of 20-25% to be able to grow the business by generating the cash flow internally and be able to invest in new products, equipment and markets.
TIM :Can you give examples of a few companies where you trained the staff and the level of improvement that you were able to achieve?
Paul:Even though I am now consulting, coaching and training businesses I have found that as a leader in an organisation that there is a constant need to train your people so as to raise the level of knowledge, skill and performance in the business. You might have the title of manager, president, director or managing director the business performance is dependent on your people. It is something that everybody should be doing constantly and consistently all the time. Over the last 10 years I have taken a number of companies through strategic change and training programs that have resulted in improvements is the following key business measures:
- revenue improvements of 65+%
- export improvements of 50%
- quality improvements of 90%
- cash flow improvements of 250%
- productivity improvements of 25+%
- inventory improvements of 30%
- production output improvement of 50%
TIM :What is the importance of I.T and how can this be used to boost the productivity of the people in the organization? Can you give some examples of companies using I.T effectively?
Paul:I have seen too many times in businesses where I.T has not delivered the stated returns and ended up costing the business rather than saving or generating money. For me I.T is an enabler and needs to complement the existing business activities and processes. It needs to be able to provide benefits to both internal and external customers. I.T systems can provide a competitive advantage for the business in identifying key business parameters, for example product costs – planned and unplanned, headcount and capacity planning, inventory planning and levels to match demand, forecasting, support sales & marketing programs and rollout of new products and services, customer service, and of course financial planning. All these things can be done in real time with a good I.T system, providing timely information to management so as to make informed decisions.
Customers’ expectations are that they are kept informed and responded to within 24 hours to whatever questions or enquiries that they have. Unfortunately I have seen more companies getting it wrong with I.T systems than right, mainly because they haven’t documented or understood their own internal processes and procedures..which is often called “legacy systems”. Getting this right first is what will determine how effective any new I.T system will be for the business.
The size of the company is not really an indicator as to how good their system is. A couple of good systems that I have seen by large corporate companies are Robert Bosch (German company, Regal Beloit (USA company) and TVS (Indian company) which both have subsidiaries operating in India. On the other end of the scale I have also seen a small company approximately $10million sales in the training industry set up their own system using standard software who are be best in class and has delivered increased sales due to the improved customer service and regulatory compliance that they were able to achieve.
TIM :What role should a Leader play in preparing the Company towards a much more austere environment with respect to costs?
Paul:This is a good question and the old saying of “A company is a reflection of its leader” really does apply in this situation. All the resources of the business needs to be focused and used effectively in a cost and cash conscious environment. I have found that there are many opportunities for businesses to improve productivity, develop new products and services and reduce costs that get missed because they are not tapping into the existing knowledge base of their staff.
The leaders role is not all about telling others what to do, it is more about getting engagement of their staff, which drives responsibility and accountability. It allows the leaders to be able to delegate with control and be able to focus on working on the business which is what they should be doing. In India where there has been a long time of economic growth, there will be and is a generation of managers and staff who don’t know what or how to do things in a slowing or negative growth market-environment. They need to be taught what to look for and how to do it, and this is the leaders role to ensure that the appropriate knowledge and skill through coaching and training is provided to staff.
TIM :How to avoid the company getting in to too much of Cost control and forgetting the main goal of growing?
Paul:This is a constant challenge for many businesses around the world over the last few years, and I have to say that it is not as difficult as people seem to think. I have found from my experience it is reasonably simple, however the challenge here is that “Simple, doesn’t mean easy!” It requires focus, action and most of all discipline to stick to what needs to be done even if it is uncomfortable.
The constant theme that I have seen that is missing is to have within the business documented processes and procedures for all the key requirements in the business. This means production, quality, sales, marketing, accounting, purchasing and human resources processes as an example. Too many times I have found that this is not clear for staff and they do the best they can based on their experience level and this is where things start to go off track and cost more money, time and resources than expected. Staff need to keep strictly to the processes which have known outcomes and timeframes. Every time I have seen blowouts in projects it has been more than 90% of the time due to people going away from standard processes and procedures. As I said simple and not necessarily easy.
TIM : How to balance long term benefit and short term cost control ? Can you give an example of some companies who do this best?
Paul: This is an interesting question and makes the assumption that there is a difference between long term and short term in the way the business should operate. I don’t see this as being the case, the two should be in alignment and all activities need to be directed to what is driving growth and profitability for the business. The companies that do well in time of slower economic growth are the ones who stick to what they have been doing and works. Investing in your people through training and coaching is going to pay dividends all the time, and usually even more so when people are worried about their jobs. Unfortunately the first thing that businesses do in a slowdown is to cut this area which gives the organisation the wrong message and productivity, quality and in the end sales-profitability suffer. After all what is making your business different to everybody else out there.
The companies that I mentioned earlier Bosch, Regal Beloit and TVS provide an example of what can be done in a positive way…and of course we can all improve and need to make sure that we don’t get complacent thinking that nothing more can be done.
In the last article, I shared a framework for the mind-set of leaders that I developed from my observations of leaders over 35 years of my career across the globe. This article, the second in the series, explores the first three aspects of the element,Compete to Win in some detail. Here is a brief re-cap of the framework of leadership from the last article:
Compete to Win.
“… if I had to single out one element in my life that has made a difference to me, it would be a passion to compete.”Sam Walton, founder of Wal-Mart.
Competing is the key to a leader’s mind. Leaders are competitive beings. They love to find arenas where they can compete against themselves or the records of others. In the minds of most leaders, it is a necessary condition to have a standard or a record against which to push to motivate them to action.This is almost like necessity of pushing against the wind to gain lift in order to fly. They have a paramount need to play, compete, take risk, grow themselves, discover themselves – this is their idea of having fun…
“I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.”– Jeff Bezos of Amazon.com
“Does making money excite me? No, but I have to make money for my shareholders. What excites me is achievement, doing something difficult.” – Dhirubhai Ambani, Founder of Reliance Group
Their motivation to achieve seems to come from competing with standards of excellence in order to better them and establish new records.They are obsessed with betterment that comes through competing against established standards and norms. For example,
“Paying the highest wages, while having the lowest wage costs.” - Jack Welch, former CEO, General Electric
It is very important to understand that their competition is with records or standards that are mostly measurable– market share, profits, margins, sales growth, costs, winning a contract and so on. It is not competing against people. Often, the standard that the leader chooses to compete with is carefully defined in a way that makes action possible.
See the motivation for Dhirubhai Ambani to move from trading into manufacturing: “I was constantly thinking of going into manufacturing. My desire was motivated by the fact that we were not able to produce and supply a quality fabric to the export market.”
Most successful leaders consider it a necessity to have strong and thriving competition for the betterment of industry as a whole and to spur innovation.
“Whether it's Google or Apple or free software, we've got some fantastic competitors and it keeps us on our toes.” – Bill Gates
It is nice to have valid competition; it pushes you to do better.– Gianni Versace, Designer and founder of Versace fashion house.
Look at the attitude of Sam Walton, founder of Wal-Mart, “Of course, Wal-Mart wouldn’t be what it is today without a host of fine competitors, most especially Harry Cunningham of Kmart, who really designed and built the first discount store as we know it today, and who, in my opinion, should be remembered as one of the leading retailers of all time”.
Another characteristic that I have observed in leaders is that they compete to WIN. They don’t enter into plays that they have no hope of winning.
“If you have don’t have competitive advantage, don’t compete” – Jack Welch.
The outcome is far from certain, but they go in with hope and feel they have a right to win. This idea of having a right is another key factor in a leader’s playbook – they build capability, seek advantages they have, make them stronger in order to feel in their minds that it is their game to win or lose. This doesn’t mean they are always successful. They take risk – albeit calculated, moderate risk; a level of risk that makes them stretch and grow in their capabilities. This combination of trust in their right to win and the knowledge that they are taking a calculated risk gives them the attitude of- “Hope of Success” versus “Fear of Failure”. It is a fine form of calibration – how much risk versus the degree of advantage they have to manage risk – each leader arrives at the right balance through much trial and error; through many failures and successes. Learning from such performance feedback is another hallmark of leaders. In fact, such leaders actively seek and solicit such feedback in order to grow their capabilities.
This drive for competition, this tendency to see work and world as an arena full of opportunities for competing and winning manifests itself in the types of goals they set for themselves and their businesses. There are broadly three types of betterment/ competitive goals that leaders set for themselves and their followers.
Competing with existing standards of excellence
Leaders often set goals that seek to better the existing records; be the best of the pack; be the first in a field of endeavor. Such goals provide the motivation they seek to drive their own as well as their followers’ performance.
“We want to give the best customer service of any company in the world.” (Thomas J. Watson Jr. of IBMin 1963).
“Walk into a Chase branch and we can give you so much quicker, better and faster. Like in Wal-Mart”. (Jamie Dimon, CEO J.P.Morgan-Chase)
Almost always, these standards have been established by others and it is often easy to mistake the competition as personal. However, it is important to note that this is their “External Focus” and not personal animosity toward other leaders. Many times though, competition does degenerate into personal animosity and such tales of corporate battles on the basis of interpersonal competition are many in business. However, when focused on competition with standards, this type of goals – those that have external focus most typically find expression in being better than others in various aspects of a business and in the end, take an entire industry to another level through the competition, and he innovation it takes to win.
“If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience, and that really does matter, I think, in any business. It certainly matters online, where word of mouth is so very, very powerful.” Jeff Bezos of Amazon.com
Often, most externally focused goals are about customers – acquiring customers, serving customers and earning customer loyalty in a fashion superior to competition. Another leader who set some memorable such goals is AG Lafley, CEO of Procter & Gamble. He directed his company to win two moments of truth with consumers – the first moment of truth occurs in the retail store where the consumer shops. If the consumer chooses a P&G product over competing products, it is a win for P&G. The second moment of truth occurs when the shopper uses the product and is so delighted as to become a loyal consumer. That is the second win. Such type of goals direct the energies of the organization into coming up with better ways to serve customers and as a result win against competitors. And, in general they are more motivating to employees and generate better action than goals such as, “highest share of the market”, “Largest selling brand”. Such goals are aspirational but it is difficult for employees and managers to figure out intuitive action plans to achieve them.
Competing with own record of excellence
“I loved the feeling of freedom in running, the fresh air, the feeling that the only person I'm competing with is me.” - Wilma Rudolph, US Olympic Athlete, winner of 3 Gold Medals
“I am never fully satisfied with any Microsoft product.” – Bill Gates
“Meeting deadlines in not good enough; beating deadlines is my expectation.” – Dhirubhai Ambani
Another manner in which leaders set up goals to compete and motivate themselves is to beat their own records; do better than last quarter; find ways of improving results that are already records in the history of their business – sales, profits, margins, inventories, costs; nearly any aspect of a business that has evolved over the years provides tremendous opportunities for improvement goals.
Such goals have two advantages – firstly, they move the envelope forward one step at a time; they keep up the forward momentum of the business. They have the added advantage in that the past record is easily understandable to managers and it is easier for them to find ways of doing better – they know the work and they produced the previous results.
This type of goal is one of the primary drivers of continuous improvement that so many companies strive for in every aspect of their operations. While it sounds almost intuitive to have numerous such goals in a business, the trick always lies in setting up a realistic, achievable and measurable goal for the company to strive toward. Too high or too low an improvement goal is not motivating for the leader or for the employees.
Most successful leaders that I have observed set up these goals on the basis of a longer term objective or vision of where they want to see their company. Once they develop a long term objective for the company’s position within their industry, they develop a “glide path” of progress toward that objective that is defined in a series of measurable goals that are spelled out by year and by quarter. When Jack Welch declared that GE would be #1 or #2 in every business they competed in, he established a time line for that strategy and set up goals that were stretching, yet achievable for his managers and employees.
Such glidepaths and phased approach to improvement makes performance feedback, celebrations of success and investment in gradual building up of capability possible. Without such an approach, many leaders invested heavily in capabilities (e.g. technological up-grades, particularly in manufacturing; hiring of top talent without challenging projects, etc.) that were not necessary and led to drain of resources. Lack of detail behind the long term goals and the lofty speeches to employees only led to disbelief and distrust within the organization.
Create Unique Accomplishments
“An iPod, a phone, an internet mobile communicator... these are NOT three separate devices! And we are calling it iPhone! Today Apple is going to reinvent the phone. And here it is.” – Steve Jobs
Apple created a unique interface between machines and people that so many companies try to copy. They integrated into one machine the functionality of multiple products. They made products that were not “open architecture” like PC and other platforms were, but met or exceeded user needs in such machines by a great degree compared to other platforms. Jobs’ genius was to marry every aspect of the looks of design of Apple products with what they did – there wasn’t any design for design’s sake which was unique in his industry.
“What we want to be is something completely new. There is no physical analogy for what Amazon.com is becoming.” – Jeff Bezos
Amazon’s story is amazing. The novelty and uniqueness of their market place, their business model, the new approaches to warehousing and delivery, including potential future use of drones must stand as a unique accomplishment in e-Commerce that has so many trend setters. Jeff Bezos’ motivation is clearly spelt out in the above quote – he wants Amazon to be something completely new!
“Actually, as an entrepreneur, I think nobody has money problems, only a lack of ideas. People keep lamenting about a lack of money, but in most cases it is money-making ideas that they need to mobilize funds.” – C K Ranganathan, Chairman, CavinKare
It is easy to think that technology industry has more opportunities for such uniqueness versus others. Here is an example from consumer products industry - in 1983, C K Ranganathan of CavinKare created something unique in the Indian market by starting to manufacture and market shampoos in small sachets that opened up beauty products to a large portion of Indian consumers, many of whom could not afford to pay the cost of full bottles of shampoos marketed by multi-nationals. He was not the first in the field – Godrej was already selling Velvette shampoo in sachets. He was not the inventor – his father built the machine that made their sachets. Ranganathan’s unique accomplishment was to create an activity system of marketing, distribution, etc., that made the product accessible to hundreds of millions of Indian consumers at an affordable price point. Today, nearly every FMCG company operating in India has sachet business. This format was taken to dozens of other countries as a way of making such products accessible and affordable.
This is the third way leaders motivate themselves and their followers – setting goals for creating unique accomplishments in their industry. Often, the accomplishment lies in the way the leader brings together their capabilities, the competitive situation, the consumer and customer to craft a unique approach for betterment of their business.
In a non-business arena, India’s Aadhaar – the biometric ID project is a unique endeavor in the way it brings together available technologies and ideas for a truly unique individual identity that exists on the cloud – no other country has such a system.
In summary, leaders are competitive beings. They love competition for the energy, the lift, the motivation it gives them. Their competition is with standards of excellence (= setting new records) and not with people. Their competition manifests in goals that they set up for the betterment of their business. They do it in three ways – competing with external standards; competing with own record of excellence and striving to create unique accomplishments. They choose their arenas carefully – they compete where they have an advantage; they take only moderate, calculated risk. They go into the battle to win – they play to win; not to avoid losing.
In the next piece we will examine the way successful leaders think about Creating Winning Conditions in their businesses. Often many people call it the Winning Culture.
I would like to start this second article in the series of ‘Spiritual Business Leader’ by revisiting the definition of the word ‘Spiritual’. Web dictionary defines Spiritual as “relating to or affecting the human spirit or soul as opposed to material or physical things”. To put it simply, it is relating to the higher purpose of Business than just the profits. It does not mean we should forego the profit motive in the Business. We can aim at a higher goal by which we definitely achieve our short term goal which is the Profitability. But, go on to achieve something higher beyond.
I would like to continue our exploration of this higher purpose in business. There are several Business men/ women who are focused on the higher purpose in business and are highly successful. I would like to borrow couple of examples from the public knowledge-base of the “Spiritual Based Leadership Research Programme” © 2006 by the Global Dharma Center (GDC). GDC retains the copy right to all excerpts from this knowledge-base.
Ricardo Levy, Co-founder and CEO of CatalyticaInc, USA
Ricardo was born in Ecuador and migrated to USA to study at Stanford University. He studied Chemical Engineering. He worked at Exxon and worked in their Corporate research laboratory. He established CatalyticaInc in 1974 along with a partner. Catalytica specialises in research and development for chemical, pharmaceutical and energy industries. They formed two subsidiary companies in Pharma and Energy sectors to whom they were providing their services. By late 90’s the Pharma company became major outsourcing supplier to the drug industry. They had three manufacturing plants and 1600 employees throughout USA. They had revenues of about 500 million $. The pharma business was later sold off to another company. They had the energy company with them. This company was based on a catalyst which they invented in the late 80’s that allowed fuel to be burned without pollution.
Ricardo defines spirituality as :the deep inner search for a fuller personal integration with a transcendent greater than our narrow self. He looks at it as a deep connection with a force greater than himself.
According to Ricardo the purpose of Catalytica (the company he co-founded) is to create value for society. Ricardo says :Unless we have a clear sense that what we are doing has a positive societal purpose and our actions will make the world a better place, it is very difficult to achieve wholeness.
While expressing his views about financial goals of a company, Ricardo says: Financial goals to me are an outcome, not a goal. Yes, they are certainly important and if you do run out of money, then your company can not survive.
Ricardo created a Pharma company which had a sales of about $ 500 Million. So, here is a man who did not work for financial goals alone. But, achieved excellent financial results!!
Ricardo speaks about his experience of using spirituality to address a big and complex problem that he faced in the business.
When we sold the pharmaceutical company it involved the dismemberment of the business that we had built over 27 years… there were many areas to think through. It helped me throughout this period to be able to live in the unknown: to let the problem be with me and just rest there. I also followed the Jesuit practice of discernment, which is learning to quiet my mind and get in to deeper inner self. And from that place to listen to the voice of god and allow my inner spirit connected to god to give me the signals of my path.
I wrestled for weeks with this sale decision. I finally reached the point where I really felt that selling the pharma subsidiary was the right thing to do. The practical result is that once I got to the point where I had reached this internal compass marker, the ability to harness the forces around me to get all of this done was enhanced ten fold. This is actually hard to describe, but the energy of my conviction and deep sense of rightness allowed me to gather these forces and go forward, Mahatma Gandhi is such a beautiful example of this spiritual multiplier effect.
Ricardo’s spiritual values and his conviction carried the day for his company.
Nilofer Merchant, Innovation expert, USA (The Jane bond of Innovation.. as her linked in profile claims)
Her linked in profile says: 18 billion dollars. Nilofer Merchant has launched more than 100 products that netted this astounding amount. It’s this kind of collaborative leadership and business models – the type that results in innovation, and growth - that she now shares.
She has gone from being an administrative assistant, to division leader, to CEO to board member of a NASDAQ-traded company along her 25-year career, gathering monikers such as the "Jane Bond of Innovation" along the way for her ability to guide organizations through impossible odds.
Specifically, she’s worked for major Fortune 500 companies like Apple and Autodesk, and startups in the early days of the Web (Golive/ later bought by Adobe). Logitech, Symantec, HP, Yahoo, VMWare, and many others have turned to her guidance on new product strategies, enter new markets, defend against competitors, and optimize revenues. And, Merchant is one of the few people who can say they’ve fought a competitive battle against Microsoft and won, for Symantec’s Anti-Virus $2.1B annual business.
According to Nilofer, spirituality is : Living fully the glory of god is being fully alive. To me this means using your gifts to the fullest, working in a position that is using all of you.
Nilofer believes in helping people to manifest the gifts within. She explains as follows:
When I was managing people while leading in my corporate positions, I always wanted to find a way to use their gifts well… I would ask them what they felt their natural gifts were, such as organising or working with teams. I tried to help discover what their base strengths were. I would then tailor their jobs so that they could use these skills and strengths optimally. … I feel that the greatest thing a leader can do is to help people manifest their gifts fully…I never wanted to spend any energy trying to get a person to do something that they did not want to do.
This has been an important part of my own spiritual development, and I have tried to pass that on as a leader.
Niloferstates the purpose of Business as: Contributing productively to the greater community, which includes the local, state, national and international sphere, serving others, using the skills and gifts god has given us all and learning and growing in to a more conscious person so that we might fully be alive.
Quite a different way to look at business compared to the narrow ways in which many business men may look at.
Nilofer says the following words regarding the creation of right type of organizational culture: What I do want for all people, whether they work specifically in my organisation or not, is to empower them to be fully engaged, fully alive and use all of the gifts they have. For me, this means having fun, laughing, being creative, having lots of great ideas and framing them in a way to share with others. This to me is experiencing a vibrant life. What I most aspire to is to help others feel passionately about their life.
Nilofer led the way in terms of walking the talk. She gives the example of a person in her company who was different: One time, we were working on a large project, and one person spent all of his time during the entire project telling everyone why it was going to fail. He was the biggest nay-sayer I had ever met in my life. But I loved him dearly and recognised that this was his way of expressing his fears and that he genuinely wanted to be helpful. I feel that fears are gifts and that they can be helpful if used properly. Because I knew he could not be productive until he felt he had really been heard. I would typically spend the first minutes of any meeting and let him share his fears. So the group really learned a lot during this process and learned better how to accept him.
The path that these two leaders are following is not the same as everyone does. In today’s Quarter to Quarter business existence where everyone is worried only about the quarterly results, the spiritual approach can be beneficial to the people involved and also deliver the quarterly results that we all seek. Ricardo Levy and NiloferMerchant two of the successful people in business are being spiritual and reaping the benefit of that approach. It is time that more people try out this approach.
How to contribute to the wellness of employees and therefore to the performance of the Company?
Wellness of employees is believed to contribute to the wellness of the Company. The Indian Manufacturing.com spoke to Ms.Mahalakshmi, Director of Ru Education Private Limited who is an experienced trainer and is pioneering the wellness concept in many Indian and foreign companies. Following is the transcript of the interview.
TIM (The Indian Manufacturing.com) :How do you define wellness of an employee or rather that of a human being?
Mahalakshmi:Wellness is holistic wellbeing which includes, good health of the body, mind and soul.
TIM:How can wellness of an Employee contribute to the progress of a Company?
Mahalakshmi:A healthy employee is a happy employee and a happy employee is a productive employee. He is much more anchored in the self and starts contributing with passion. And when people’s actions are backed-up with passion it takes the organisation to the next level effortlessly.
TIM: What are the Indian ways in which we can contribute to the wellness of employees?
Mahalakshmi:India always has had a holistic approach to wellness. For example take the Panchashudhhi model. It talks about purification of the body (Sharirashudhhi), Purification of the speech (Vaakshudhhi), Purification of the emotions (BhaavaShudhhi), Purification of the thoughts (VichaaraShudhhi) and Purification of the self (AathmaShudhhi). Even the Ashtaanga Yoga model talks of the holistic approach to wellness which leads to enlightenment.
TIM:What role can the leader of the organization play in promoting the wellness of employees?
Mahalakshmi: The leader of an organisation should have a far-sighted approach towards the wellness of the employees. I am reminded of the old tamil poem which says “When the ridge to contain the water in the fields goes up the water level goes up; when the water level goes up the paddy crop produce goes up; when the produce goes up the citizens’ well-being is heightened & when the citizens’ well-being is heightened, the king becomes supreme”.
The leader’s role is to provide a conducive environment in the systems, hierarchical practices and organisational procedures of the organisation to promote wellness of the constituents. Alongside awareness training should be conducted by competent facilitators to raise the awareness levels.
TIM:Can you give some examples of companies where this concept is championed and how they would have got benefited ?
Mahalakshmi: ELGI Equipments ltd is a pioneer in this region. They have conducted a series of training programs to bring-in overall awareness of well-being at the body, mind & soul level. Various initiatives like yogasanas, deep-breathing techniques, meditation, etc are taught to them and also 15 minutes time is given to all where-in a daily energiser routine is followed by them. In this 15 minutes, 5 minutes is allocated for physical exercise (physical well-being), 5 minutes for deep-breathing exercises (for high energy levels) and 5 minutes for meditation (mental well-being). They have also spent over 50 lakhs in a wellness centre, where series of initiatives like lectures and programs are organised with the help of competent faculty to raise the awareness levels.
ITC, Thekkampatti is also one more organisation who has instilled this awareness by including yoga as a part of their training. Also Pricol has taken special interest in this aspect.
I have just mentioned a few Coimbatore-based companies here.
The result is a generation of employees who have heightened awareness towards wellness. This results in better industrial relations and general value-addition to quality of life all around. This will also go a long way in fulfilling the Corporate Social Responsibility..
TIM: Is this concept only for big companies ? Is it expensive to really focus on wellness of employees?
Mahalakshmi:Not at all. It should be and can be followed by all irrespective the size of the company. Its not expensive and all it needs is “Value for wellness”.
The ROI in terms of the effectiveness and efficiency of the employees is so high that the amount spent is just a fraction of the benefits derived.
TIM:If the relationship between Management and Workmen is not good right now, is it a good time to start focus on wellness?
Mahalakshmi: In such cases, this in fact is the best time to focus on wellness. When the employees see the selfless contribution of the employer towards his wellness the environment becomes much more conducive for a better relationship.
As thegenuineness of this effort is seen by the employees, it results into immediate diffusion of animosity and hostility and results into better IR.
TIM:How do you energize the employees on a daily basis using some simple concepts?
Mahalakshmi:A minimum 15 minutes focus should be given for this aspect. Simple exercises, pranayams and meditation should be the routine.
TIM: How can Yoga help in improving the Business of a Company?
Mahalakshmi:The root word of yoga in Sanskrit is “Yuj”, which means “to join”. When you have a work-force who are joined or anchored in the self, who are much more centred& emotionally balanced, time is not wasted in negative activities. The energy can be positively channelized towards growing of the business.
TIM:How can your organization help in improving the Wellness of employees in a company?
Mahalakshmi:Ru Education has developed unique training programs under the name “The complete Secret of Personal Effectiveness Programs”. These programs focus on training and equipping the employees to handle all the levels of their existence which includes their body, communication, Emotions, mind and spiritual. Also Asanas, Pranaayams& Meditation are taught as a part of our programs as we believe in self-management leading to external work-place management. We have taken the best of Spiritual techniques from the eastern world and the management techniques from the western world. When transformation happens at the core level, attitudes will change and there will be a longer-lasting behavioural change. We have a very strong expertise in this field, with proven track-record of having conducted over 800 programs for leading companies in India and overseas.
More details can be had by clicking on this link www.thecompletesecret.org
SELF MANAGED WORK TEAM (SMWT) - Introduction
“Not finance. Not technology. Not strategy. It is team work that remains the ultimate competitive advantage, both because it is so powerful and so rare”(p. vii) This is the way Patrick Lencioni opened his best- selling book The Five Dysfunctions of a Team (2002)
The increase in global competition has created situation for firms to become more innovative and incorporate ideas that increase employee motivation and productivity while decreasing costs. One method that has had great success is the use of Self-Managed Work Team (SMWT). William Passmore reports in his article, "Developing Self-Managing Work Teams: An Approach to Successful Integration.", that Self-Managed Work Teams (SMWTs) are increasing in their popularity and many U.S. firms are using different forms of these teams to help increase production, streamline the organizational process, and maintain a higher level of commitment and motivation among employees.
Self-Managed Work Team (SMWT)is “a group of employees who are accountable for their deliverables as a team and managing end to end process by themselves with no / minimum supervision”
In traditional setting, for every 10-15 shop floor employees there is a supervisor who ensures that day to day activities are carried out by them. For every 3-4 supervisors there is a manager who manages supervisors directly and shop floor employees indirectly. These managers are in turn managed by Department Head. Probably assumption is that all the shop floor employees have no brain to use towards contributing to the organization, will have to be supervised very closely to make them work, will not take responsibility, will not contribute to improvements, will not learn new skills etc. Often shop floor employees will not disappoint them and will reflect these assumptions in their behavior.Result is wastage of human resources.
‘Self-Managed Work Teams’ (SMWTs’) way of working assumes that every shop floor employee can contribute not only by their hands but also by their brains to implement improvements, can learn new skills, does not require supervision to carry out their routine activities, can take higher responsibility of Production, Quality, Cost, Delivery, Safety and Morale.Good news is that ‘it WORKS’. Though initially it started in Western world as a concept and developed outside India successfully, it works in India too. For example in Dr. Reddy’s Laboratories Limited, an Indian multi-national pharmaceutical company implemented Self-Managed Work Teams concepts almost a decade ago. It was the first pharmaceutical company to implement it in the world. These team members have grown to the status of Managers!
In 2008 I started implementing the same in the name of Self-Managed Team (SELF MANAGED WORK TEAM (SMWT)) in ELGI Equipments Ltd, an Indian multinational manufacturing Compressors. I have seen operators sitting and chatting during their shift time. When enquired, they said that materials for production had not come and their supervisor was following with different departments to get it at the earliest. The same employees after implementing Self-Managed Team (SELF MANAGED WORK TEAM (SMWT)) philosophy, would ensure availability of materials the previous day. If material is not available at the line, they would follow it up with stores through their ‘Thaeni( Meaning ‘Honey bee’ in Tamil. Material Coordinator from their team) STAR’ and if material was not available in stores, sometimes the ‘Thaeni’ used to follow it up with Purchase department and in some instances, their follow up trail went up to Supplier himself. Whether they need to follow up it with Stores, Purchase and Suppliers is debatable, but the point is that they had taken the responsibility for the on-time production and took pride in achieving it.
Self-Managed Work Team (SMWT) implementation mainly focuses on shop floor employees. However, the changes affect every function that interacts directly with the shop floor and at every level. At a broad level, it brings changes in every function.
Implementation of Self-Managed Work Team (SMWT) is not EASY, especially in our culture. It has its own challenges and risks. The biggest challenge is about its’ sustenance. These points will be discussed in forth-coming articles.
Name of the Book: The Power of Full Engagement – Managing Energy, Not Time, Is the Key to High Performance and Personal Renewal
Name of the Authors: Jim Loehr and Tony Schwartz
My Quality Rating: Very good
The central theme of the book is ‘Performance, Health and Happiness is grounded in the skillful management of energy’.
To be fully engaged, one must be physically energized, emotionally connected, mentally focused and spiritually aligned with a purpose beyond our immediate self-interest.
Principles for Full engagement are: Drawing on four separate but related sources of energy( physical, emotional, mental and spiritual); because energy capacity diminishes both with overuse and with underuse, we must balance energy expenditure with intermittent energy renewal; to build capacity, we must push beyond our normal limits; and positive energy rituals-highly specific routines for managing energy-arethe key to full engagement and sustained high performance.
A three-step, Purpose-Truth-Action, change process is presented with case studies and tools.
With a lot of Scientific research data presented how to manage Physical, Emotional, Mental and Spiritual energies to become fully engaged.
Social / Historical context:
This book is written at the right time and in the right context. Everybody is running behind money to live a luxurious life, to seek more pleasures, to gain name and fame but most of us get depleted on the way and not all those who get what they wanted live happily, after all.
Jim who has coached hundreds of athletes in different sports including Jim Courier, Monica Seles in Tennis, gives the balancing act in managing all energies, which is not only applicable for athletes but for all those who want to live fully engaged life.
The intention of writing this book was to provide a life-changing road map to become more fully engaged on and off the job, i.e. physically energized, emotionally connected, mentally focused, and spiritually aligned.
The demand for this book will continue as pressures in life bound to increase.
Language is simple and direct. Case studies that are presented are not only interesting but also easy to connect with the situation.The writing style is really powerful in influencing individuals to change.
Developing a model that would fit anyone to live fully engaged life is praise worthy!
The basic content of ‘Energy management’ is a familiar ground for Indian philosophy. Every Yoga master would teach probably all these. By presenting a methodical and practical way to improve oneself,this books stands out!!
Today there is no dearth of information, thanks to google. Every individual wants to improve from where he is, thanks to human nature. But ‘How-to-do-it’ is not clear. This book presents that methodology.
Since these principles and methodology are developed from coaching athletes, sometimes I felt some terminologies are over-used like Emotional muscle, Spiritual muscle etc. But it may help some to associate better.
I would strongly recommend this book to all those who want to improveand make their life more meaningful.