I have been dealing with several Mid-Sized / Small Sized Companies (Not Micro) as part of my work earlier as a fulltime employee and now as a Business Coach for the past 7 years. I have been dealing with the Head of the Company in all the cases. I have seen the Head of the Company dealing with his Company / his top team in different ways. Some had been very effective some not so effective and some more have very confused way of dealing.
These are the Companies who would have crossed about Rs 50-75 Crores when the Owner is feeling the need for Professionals to come into his Company and help him grow the Company. The type of companies that I am talking about have a Topline from Rs 50 Crores right up to about Rs 2,000 Crores. The Companies that I have seen have similar issues in all these sizes. This had been my experience.
Let us look at the role that the Managing Director can play in these companies. How can he/she lead the company firmly while not becoming the one and only Power in the Company.
I see that the Managing Directors are playing some of the following roles in these companies:
01. The Do All: In many Companies the MD is firmly in charge and is controlling / trying to control just about everything in the Company. He would know how many visitors reported at Security yesterday! The Top team look to the MD for Direction in everything. You would hear the MD say that his Top team is absolutely ineffective! Some of these companies would have put together the Organization structure that is needed for a nice Delegation. But Delegation just does not happen due to various reasons.
02. Semi-organized chaos: There are some companies where the control is given to the layer next to the Managing Director. But the Company is not directed firmly by anyone. The responsibilities seem to be slipping into the cracks between various people in the senior team. Critical slip ups are avoided as the Senior team is attentive but not taking full control. These companies do grow. But they do not achieve their potential and if Business conditions get tougher, we don’t know whether they can face up the situation.
03. Family team in control: In some of these companies the Family is omni present. They occupy all the critical roles. A Family works in very different way compared to the Professional team. There can be lot of shooting from hip as they all have a lot of authority without the capability(sometimes). The Managing Director is loosely controlling the Family members. There is no structure for this control. This Type of Company would typically take sudden turns and changes in direction in the way Business is run!
04. Delegated but not able to scale: There are some companies where the MD recruited a good senior team, is able to delegate well to them. The Professionals are more or less running the Company. The MD is busy in several other things and the Company is not achieving its’ potential for top line and Bottom line.
As you can see in the above description, the Companies have different Organization structures.
Managing Director and CEO
In some companies the MD recruited a CEO who is supposed to take care of the Business. The CEO would have a team of Functional Leaders reporting to him/her. But several of the Functional Leaders may also be in touch with the MD directly. I can see the MD struggling to give up his control and strengthen the CEO. This is not very easy. In this structure, the MD showing his intention to give up control. It depends on the CEO and the MD whether this can become a success.
Managing Director and Top Team
Some Companies who have an active Managing Director who is controlling on a daily basis and he has a top team of Functional Leaders. The MD may want his team to take control. It is more difficult for this to happen in a structure like this. The Managing Director is wired to control everything in this type of structure. He is too close to action to give up control. Someone is needed to coordinate with all the Functions. If there is no administrative head, the MD becomes the default head.
Managing Director and Family members as Functional Heads
There are some companies where one Family member is the Head of each function. These companies would be having more structural problems. A Family member as a Functional head may not be very ideal as he/she would have lot of power and they would keep taking decisions that would have far reaching consequences. When this happens without much control at the center, an organization can suffer.
What is an ideal role for a Managing Director in these Companies?
An MD should put a good Organization structure in place where there is a team of Professionals for each Function. It would be best for the MD to appoint a CEO who would control the Business. This gives the MD an Investor’s perspective. If he manages the Business himself, there is no one who can look at the Investor’s perspective.
From my experience I identify 5 things that a Managing Director should do and One thing that he/she should not do.
Let us talk about what he/she should not do.
Don’t get involved in the Routine
It is ideal for the MD to leave the Routine to the Professional Team. The regular Sales / Operational Targets should be left to the Professional Team. Achieving the Annual Business Plan should be the domain of the Professional Team. MD should learn to be away from this Routine. Sometimes the Team may fail. But that is part of the game. The Performance Management System in the Company should ensure that the success / failure is squarely placed with the Professional team. I have seen some very structured way of doing this and some unstructured ways that still achieve this result as the MD simply keeps away from this temptation.
If an MD is hands on and controlling the Routine, then he/she can become the Obstacle for the Company’s growth. He would be acting couple of levels below his level and no one would play his role in the Company.
What the MD should Do?
01. Strategic Business Plan focus: The MD should definitely be in control of where the Company heading to. He should coordinate the work for getting the Vision, Mission and the Medium-term goals done. He should play a big role in working out the Strategy of the Company and the Strategic Initiatives to put the Strategy in place. This does not mean he should not take the role of top team into this activity. He should encourage the forming of the Strategic Business Plan by the top team. But he is responsible to get this done. He should ensure that the Top team is not lost on the routine and they keep focus on the Strategic initiatives.
02. Set up Business Systems: The MD should play a good role in setting up the Business Systems in the Company. Business Systems is the process with which a Company would achieve its’ Medium term / Annual Goals. The MD should not get swayed with everything that he/she comes across in the Industry. I have seen MDs who get interested in all the latest buzz words and want to implement in their Companies without an overall understanding. They have to take up the role of setting Business Systems more seriously. They need to learn the systems that are running well in other Companies across the world. They need to develop a larger vision for the Business systems in their companies.
They should not look at this responsibility as a one time one. They need to set up the Business Systems and keep improving them forever. It is not a one-time responsibility.
An MD should get into the small details in the Company to set up a good System in the Company. This is an opportunity for him/her to know how routine is happening in the Company.
03. Product and Process Technology: MD has to be in control of the Product of the Company and how it would keep developing ahead of Customer requirements and Competition. He should ensure that the Company’s Products are at the top end. He also has to pay attention to the Process with which the Products are being manufactured. If you are doing it in the same way as every other Competitor is doing, then your Competitive edge may soon disappear. He may look for Technology and Technical associations towards this end as required.
04. Using Industry 4.0: In Manufacturing some phenomenal changes are happening world over with the usage of Industry 4.0 elements. It is quite possible to redefine your Business using this technology. A Managing Director should help his Company to rediscover itself with the help of this technology over a period of time. A Company should do it before its’ competitors do it. An MD has to learn towards this.
05. People Development: An MD should focus on developing a good Team and ensuring this team is continuously learning towards the Business Goals. Most of the Indian Companies are not focused on the Skills of the employees. For continuous progress of a Company it is very essential for a Company to have a good Team and a system for developing the Skills of the team. It is possible to develop a good Learning System in the Company using Micro Learning Concepts and E-Learning. An MD should enable this system in the company. The day to day execution may be taken up by the HR function.
It is very important for an MD to play his/her role well. Operating either at a very high level where he/she can’t see anything on the ground or operating in the small daily detail will make this crucial role in the Company ineffective!
How are you operating in your Company?
In the last few Quarters the Economy has become tougher and every Company is struggling to find Growth of Top line and Bottom lines are disappearing or thinning out for many companies. In this situation, the Companies need to operate with good efficiency. Without this they would waste the resources and perform sub-optimally. No Company can tolerate Sub-optimal performance. The Current condition of the Economy adds to this need. Going forward the Competitive situation will become tougher and tougher for companies. World over the Manufacturing Companies are going to go forward aggressively in terms of improving their productivities with the use of Industry 4.0 elements. Indian Companies will have to rise their performance levels. For this there is a need to install a good Performance Management System in a Company.
I am always surprised to see the absence of this in many Companies. The focus on Performance is missing and therefore the Employees keep getting rewarded for Sub-optimal performance. If a Company does not attend to this, this can become the biggest drain on the energy of the Company.
From my experience, I would suggest certain elements in a good Performance Management System.
01. Performance Planning: The Performance of a Company and its’ employees has to be Planned well. Normally this is done with a System of KPIs for all the Employees. A concept of Deploying Goals from Senior level to Junior level has to be used. This will ensure the alignment of Goals from top to Bottom in the Organization. The Company has to ensure:
a. Diagnosing the Performance of the Last year to learn from mistakes.
b. Appropriate KPIs to all employees.
c. Targets for all KPIs in line with the Company Goals.
d. Deploying the Targets and means to achieve the Goals to the team members.
e. Detailed Action Plans to achieve the Targets in the year. This will ensure that the Employees pays attention to the Resources needed and also the ways and means to achieve the Targets.
02. On Going feedback: There should be a System of Regular Formal Business Reviews at all levels in a Company. I have seen that in many Companies the Senior Level reviews regularly and they are involved in all types of Reviews. There is no ownership of middle level for their teams. This is not acceptable. The Review meetings at all levels are one way to push the responsibility to appropriate levels. When they review the performance of their Teams and take responsibility to their performance, the feedback will happen regularly and at all levels.
03. Employee input: The Formal Business Reviews should give a chance for the Employees to put in their point of view in a formal manner. A good process has to be put for this. The Employees should work out their performance with respect to their KPIs. They should bring in their Point of view in the form of structured ‘Corrective Action and Preventive Action’ (CAPA). When an Employee writes the CAPA and presents to the Boss, he/she is putting in their point of view. The Boss can encourage this and help them to improve it from time to time. Many companies take the input from more junior employees with the help of a Town Hall type of meeting once every few months. Having good avenues to take the input from Employees is critical to the effectiveness of a Performance Management System.
04. Performance Appraisal. While throughout the year the Employees voice will be heard and they will be given feedback, formal Performance appraisal is needed. Employees have to be appraised on the basis of the various criteria that are agreed with them. A Good Performance appraisal system will have following elements:
a) What has to be achieved: The Employees will have KPIs and Targets to each of the KPIs. They will have to show the results for these KPIs.
b) How it has to be achieved: Usually a Company would define the process using which the employees have to achieve these targets. This will comprise of:
i) Preparing Detailed action plans,
ii) Monitoring the Performance in a visual manner.
iii) Regular Formal Business Reviews.
iv) Writing effective Corrective action and Preventive Action.
v) Using a Proper Problem-Solving methodology for Problem solving.
And so on.
c) What is required to achieve it: What Skills and Competencies are required for Employees to achieve these Targets. Functional and Behavioral Competencies are identified that the Employees need to learn. There should be a good system of developing these Competencies in the Company.
Usually the Performance appraisal system would give weightage to all the above. Normally the weightage for the section (a) may be 50% and other two sections together will have balance 50% weightage.
Some Companies may introduce more elements in the PAS as follows:
- Cross functional Team working to solve some big problems for the Company.
- Developing their team.
Rating: The Employees are classified into different categories like a) Excellent b) Good c) Satisfactory d) Below Satisfactory. The number of ratings may be 3-5 depending on preference of the Company.
05. Performance Appraisal Interview: Companies should promote a formal Performance appraisal interview that will have some of the following Best practices:
a. A formal Meeting is needed between the Boss and Subordinate.
b. HR representative must join.
c. Prepare elaborately for the meeting.
d. How to handle a defensive subordinate
e. Recognize that defensive behavior is normal.
f. Never attack a person’s defenses.
g. Postpone action.
h. Recognize your own limitations.
i. Maintain notes throughout the year.
j. How to give tough feedback to a subordinate
i. Do it in a manner that lets the person maintain his or her dignity and sense of worth.
ii. Criticize in private and do it constructively.
iii. Avoid once-a-year “Yearend lectures” by giving feedback on a daily basis, so that the formal review contains no surprises.
iv. Give Plus first and then give Development areas.
v. Criticism should be objective and free of any personal biases on your part.
06. Training and Development: The T&D agenda is worked out right at the beginning of the year. This may happen after the review of the last year’s performance of the employee. Using Technology, you can now totally re-engineer the Training & Development. You can work out the Training agenda for employees on the basis of their agenda in terms of KPIs and Targets. This Training agenda is worked out in terms of Micro Skills that the employees need to achieve the KPI Targets for that year. These Micro Skills are addressed with Micro Training modules using E-Learning technology. The training happens thru out the year and it is done at a Micro level that the employee can use to straight away perform better. Typically, every Employee would spend 2 hours per week for Learning. This makes it 12 Working days per employee which is even better than the World class standard.
07. Rewards: The reward system can address the following:
a. Recognition of employees’ performance. Employees would get increments / incentives based on the rating that they receive.
b. Employees would be recognized as ‘Best Employees’ based on certain transparent criteria.
c. Recognizing every drop. Some companies recognize the small contributions of the employees
d. Kaizen / Suggestion schemes: Many companies encourage the employee participation.
It is important to have different ways of recognizing the performance of an employee. If there is only one way and that is given at the end of the year in terms of increment, then the Employees would build too much expectations from the Appraisal and all of them will never be happy with whatever rewards that you may give.
This way the Performance Management System should be a well-Engineered system in a Company. This System has to be continuously improved to suit the changing Business scenario!
How do you manage Performance of your Team?
Every Company has to manage their Cost in a systematic manner. Ideally there should be no need to cut Costs. But almost every company has this need to drive Cost reduction. The Profits are under pressure continuously and the Competition & Customers always gives you a reason for Cost reduction.
Many a times when the Cost reduction is taken up the Teams take up an approach of ‘Somehow’ reducing the Costs. If you are approaching serious Cost reduction after a few years in your company, then very good chance is that you would do well and achieve a good amount of Cost reduction. Usually the Top Management are happy with that and Serious Cost Reduction is set aside for next few years.
But I feel there is a need for Continuous Cost Reduction in a Company. The Cost should always be looked at and we should continuously find more economical way of doing things. This has to become a continuous focus of every organisation.
To ensure this happens, we need to put a Cost Reduction System in place. The system would have following components.
01. Cost Data: The first step in ensuring a good Cost Focus is to ensure the Cost data is available in the Organisation. I have seen many instances where the data is not available on the Costs and the Management does not get awakened to the need for Cost reduction. The Cost data should have at least two sides. The Internal data giving the various components of the data and second aspect is Benchmarks with external data. It is ideal if we can get Cost Data Benchmarks with the Competition. But we may not get it every time. We can also look at the Cost on Zero basis.
The Cost data should be available in every area. It is worthwhile to have a small team to analyse the data and bring out the important components.
I have seen several companies that do not know the Cost data for their Products. So much so that they do not know whether they are making money on all their products or not. This is not a good situation to be in.
02. Cost Reduction Target: There should be a Target for reducing Cost just in every Function / Department. The Target should be a reasonably tough. The CEO should have a target at the Company level. This is very important as there are some Cost escalations that happen despite our best efforts. Most of the time, we do not have any control on the escalations. We need to have something to fight back with. Only this will ensure that we achieve our Profitability target for each year.
Cost Reduction target has to be taken to every Function / Department.
03. KPIs: Every employee should have a KPI that is about Cost Reduction. This KPI should have a reasonable weightage. This will ensure that the employee gives a good priority for the Cost reduction.
04. Process for Cost Reduction: Every Company needs to have a good Process for Cost Reduction.
a. War room: There should be a War room for Cost reduction in every company. The war room will have the Cut samples of Products, the Products that are broken down to parts, Competition product Samples and so on. It will also have the Target Vs Actual displays of various teams that are working on Cost reduction.
b. Daily Meeting of Teams: If you want your teams to deliver on Cost reduction, they should spend time EVERY DAY on Cost reduction. Every team should meet for at least 45 minutes in this room The War room should have the schedule for the meetings of various teams.
c. Brain Storming Sessions: Cross functional Teams should meet in the War Room for Brain Storming Sessions. There should be a schedule for Brain Storming sessions. The number of Brain Storming sessions will depend on how much progress you have to make in that particular area. If there is a big target and you are very much behind, then you should meet more often.
Every Brain Storming session should be held with a good Procedure. The team should prepare for the Session. The target for the session in terms of a Value for which you should find ideas should be given ahead of the meeting. The specific topics for the Brain storming session should be announced in advance.
d. Invite SMEs: Subject Matter Experts (SMEs) should be invited for the Brain Storming sessions. These SMEs may be in the Company or they may be Suppliers, or they may be Professors at IIT and so on. You can get different thinking into the Company by inviting the SMEs from outside.
e. Full Time team: Every company needs to have a full time team as needed for implementation of the Cost Reduction ideas. Sometimes it would be very beneficial to have a Task force (Full time team) for implementation of the Cost reduction ideas.
I have seen this Process give wonderful results in Companies. Every Company would require some home-grown processes to ensure effectiveness. But the above standard practices work everywhere.
05. Techniques: Every team needs to learn some formal Cost reduction Techniques like VA / VE, Total Cost of Operation and so on. The teams need to be taught the techniques that work best for the Company. Every company should define these Techniques specifically for each Team and teach them these techniques with the help of E-Learning Courses.
06. Learning from the past: Finally, the Company needs to learn from the Cost reduction Projects / ideas to improve their Products / Processes. A Company need to become better and better at Cost Management and their experience in Cost Reduction can help in a big way towards this objective.
07. Cost Council: It would be good to formulate a Cost Council headed by the Finance Head to monitor the Cost reduction efforts. This Council would be responsible to manage the Cost reduction efforts across the Company. The Council should work out ways and means of encouraging the Employees and motivating them towards the Cost reduction Goals.
08. Total Employee participation: Company should encourage participation from Employees as well as Vendor Community. For this it would be useful to have standard Schemes that will help the Company to encourage the employees and Vendors to participate in the Cost reduction actively. The Employees and Vendors would be rewarded suitably for the Cost Reduction efforts.
A continuous focus on Cost Reduction would definitely help the Company in managing their Profitability much better.
As Leaders all of us Professionals and Entrepreneurs interact with several people in the Business. We need to manage several relationships to succeed at the job. One of the most important relationships is that of Boss and Sub-ordinate. I see several Professionals not being able to manage the relationship with the Boss. I feel this happens to many Professionals at some point of Career or the other. Usually when you become more senior Professional.
Let me give an account of my own experience in my career so far with my Bosses!
Totally Aligned: I have experienced a wonderful relationship with a few Bosses with whom I was totally aligned. The relationship was wonderful. The Boss was appreciating my strengths, I was worshipping my Boss’s Qualities and trying to learn. The relationship was just perfect. I was able to have this relationship at a relatively early stage in my career.
Absolutely no fit: There was this type of relationship with one or two people where there was no common ground at all. My methodology and my Boss’s methodology just did not match at all. The relationship just did not click at all. This happened to me when I was early into the Job as well as mid stage.
Trying to align and give up: Then there was this type of Boss where there were some disagreements, you try to manage them respectfully as you have seen some amount of life. But when it is going on beyond a point, you just give up. This happened after good number of years of experience.
Manage a Respectable relationship: Then, I have experienced a few relationships with my Bosses (Both in full time job and in Consultancy) where there are number of disagreements. But we deal with them respectfully and keep going forward. Looking back, I could do this quite early in my career. Of course I do it day in and day out as a Consultant / Coach / Entrepreneur.
When I look back, I am able to appreciate the point of view of every Boss with whom I worked. I am able to look at the relationship that I had with them from a distance and able to appreciate why some of them worked and why some of them did not. I feel it depends on the stage of your career as well as the Compatibility of the People involved.
Fresher and Boss: In many ways this is a very nice relationship. The Boss does not have any axe to grind as the subordinate is a fresher. The Fresher is also starry eyed and looking at his Boss with admiration. Of course, there are again some relationships where the Fresher and the Boss just do not see eye to eye. In this case the Fresher quickly changes the job.
Growing Manager and Boss: There is that stage in your Career when you start growing rapidly. If you and your Boss are aligned, your Boss may be the one who is helping you grow. But in other cases, the Boss may be very uncomfortable with this guy who seems to be growing in stature every day!
Challenger: Then there is this stage where you may be just as senior and competent as your Boss. You are too close to him for his/her comfort. The relationship will be tense. The Boss would be peeping over your shoulder perennially. Boss may feel that you are a Challenger to his position.
Senior Colleague: Then you would gain years of experience and become a Senior Colleague to your Boss. Technically he is your Boss. But as both of you are senior Professionals, the relationship is more like a Senior colleague rather than a reportee.
With my personal experience of Managing / Mis Managing the relationship with my Bosses in my career and with my experience of watching many Senior Professionals as a Consultant / Coach / Entrepreneur, I would recommend some Best Practices in Managing the relationship with the Boss.
You need to Manage the relationship: First of all we should recognize that there is a need to ‘Manage’ the relationship with the Boss. Many a times you may think that just working with all your heart is what is just needed. Everything else will fall in place. It may not. You need to recognize that your Boss is another Human being with his own imperfections as you have imperfections yourself. When I say you have to ‘Manage’ your relationship, I mean the good way. I am not talking about the practice of just trying to please the Boss. Those who are doing it and doing well do not need to read this article. I can’t add much value to them. Recognizing that there is a need to Manage the relationship is the first step.
If you are not able to agree that you need to Manage the Relationship, then spend more time on this. Talk to your friends. You are welcome to talk to me. You need to be convinced about this basic foundation.
Many a times we may take extra efforts with our Team. But we may feel the Boss has to do it with us and we may just not take any effort to manage our Relationship. But I feel this argument is flawed. At a senior level both the people need to put in effort. The Boss may be finding it difficult to ‘Manage’ you. Give him a chance!
Understanding the Priorities and aligning: Usually after you have put a good number of years in the industry, you would develop your own way of working. If you get a Boss who is able to just leave it to you, then it makes the job easy. But many a times you may have a Boss who is as Strong willed and who is having as much experience as you are. Then it is required to understand his /her Priorities and align with him. It is just fine to modify your Goals and methods of reaching them. Either he listens to you or you listen to him. But if the disagreement is strong, don’t just duck it. Try to deal with it. As Marshall Goldsmith says we have to make peace with the fact that it is the Boss who decides many things around you. You need to accept this fact.
Communication: Understand the amount of Communication your Boss needs. If in doubt, you can ask. But many Bosses may not be able to articulate well about how much Communication they need. For example, I need a lot of communication from my Team. I am happy with someone who communicates a lot with me and then understands what need to be communicated and how. Understand your Boss’s preference. Please note that it is worth doing this.
Reach out to him as a Human Being: Very often you label your Boss with Positives and Negatives at work. You may not see the Human side of him/her. Try to reach out to your Boss to just do that. I have seen many Bosses who do this very well with their Team members. I had a Boss who would invite the team to his home and play a wonderful Host! I could see a very different sensitive side of him in those interactions. Another Boss was very good in feeding people! You would go back home much heavier if you go to his home for Lunch/Dinner! You need to take the same effort with your Boss! It is needed!
Genuine appreciation: You need to give Genuine Appreciation to your Boss when it is due! This is a smart way of letting him know what you like about what he is doing. You may get more of it in return! Without this, your Boss would not know what you like about him/her. Don’t fake it. He/she would know it.
Formal Feedback: Try a formal feedback session with your Boss at least once an year. Sometimes you may need it twice a year. This will work with some Bosses and does not with some others. Where it is not working, look for subtle signals to understand the feedback. It is tougher. But you need to put in the effort. There is a Danger of misunderstanding him/her. Try your Best to validate your understanding.
Learn from your Team’s feedback: Many a times you can learn from the feedback that you may get from your own Team. If you can reflect, you can pick up many learnings. You can look at gap in reality vs your thinking about various team members opinion about happenings in the team.
Managing a Disagreement: With all your efforts too, you would have disagreements with your Boss. Expect them. The problem is bigger if you are expecting a wonderful stain less relationship!! If you are old enough, you would have understood that it is quite okay to have disagreements with your Children and your Spouse. So why you can’t live with some disagreements with your Boss?
When there is a Disagreement, look for what is the Best solution for the situation. Don’t get hooked to your position beyond a point. Take the opinion of various Colleagues. Do not go only to like-minded Colleagues. It is comforting to gang up with similar thinking colleagues. It is important to go to Colleagues who think dissimilar to you in these situations. You need to put effort to understand the other point of view. We need to have belief that the other person is having the Best intentions when he/she is suggesting something. This may be your opportunity to Learn something different.
My own experience of such situations is that when I managed such situations, my learning was wonderful. It took me to the next level as a Professional and as a Human being. When I ducked those situations, I missed out on the Learnings!
We need some Humility!
My experience is that those with some Humility can manage the Relationships much better! Those of us who are still having rough edges find it more difficult to manage relationships. Rough edges (in terms of our behavior) would hurt others and they hurt us more!
One good practice to learn Humility is to have Gratitude.
You need to write down what all you are grateful about in your life. Thank those who helped you to gain in them in your life. Do this every morning. This teaches you Humility! This would totally rewire you if you are sincere to the cause.
With more Humility we would manage our relationships much better. We would understand that taking everyone along with you (including your Boss) is more important than having some Bright ideas in your head and a feeling that your thoughts are superior to everyone else’s. You would become more tolerant to others’ ideas.
Wish you more Harmony in your Relationships! It is needed to reach your Goals!
There are many Leaders in the Manufacturing Industry. I have had the Privilege to meet Hundreds of Leaders as part of my Career and Business/Executive Coaching. No two Leaders are the same. Each Leader is interesting in his/her own way. Each Leader has his/her own way of guiding the team and getting results. We can look at results and say who is effective and who is less effective. But, it is also important to look at the Process that each of these Leaders follow.
Let me discuss a few examples of Leadership that I have seen.
01. Patient Leader: I have met a Leader who does not follow up hard with his team. This Leader may / may not fix any targets. If a Sub-ordinate is proactive, he may bring a target for approval by the Leader which the Leader loyally does approve! Otherwise, he is not running after the Team members for Targets. This Leader also does not review his team closely. He does not put any pressure on his team. None whatsoever. In fact, he is trying to make them absolutely comfortable in their jobs.
While this is the style of the Leader, the Subordinates who are quite conscientious are building their own methods and achieving the results that they can. Those who are not firmly in control of their problems may not be delivering very good results. This Leader is not putting any extra ordinary pressure on this person. Sometimes he may get involved in this area a bit more.
The results in this company are reasonably good. They keep growing very well. It is not a very small company. It is above Rs 1000 Crore turnover and they are growing.
When you look at the Business Systems in this Company, they may not be very strong. Whether the Company can withstand strong competition and survive in a tougher environment also? It remains to be seen.
But, fundamentals related to People seem strong.
This type of Leader is a big exception and I have not seen this type of Leader coupled with good results in short and long term. There are leaders where the Business Results are there. But not Process results.
02. Lost Leader:There are many Leaders of Companies who are expecting a lot from themselves and their teams. But, they have no idea of how to achieve it. They keep taking up BIG targets and keep failing regularly.
They keep pushing their teams hard. The teams do not have a way of going after the Targets. The guidance from the Leader is not Clear.
Results are always well short of expectations. Very often I found these companies more or less stagnated at the same level for years on!
This type of Leaders are many. I am not referring to Entrepreneurs only here. There are many Professional Business Leaders who fall in this category.
03. Aggressive Leader: Then there are Leaders who are out to achieve everything and, in some way, or the other. They want results ‘somehow’.
The Targets are usually set to be quite aggressive. But, these Leaders are okay even if their team achieve 75% of these Targets. They have fixed ‘high’ targets in a ‘smart’ manner!!
These Leaders usually tell the team what to do, how to do and of course when to do. They just seem to know everything and have answers for everything.
These leaders ‘deliver’. Their Bosses are very careful with them.
These are the Organisations that are stuck in the wrong place. They seem to be getting ‘Good’ results and they don’t want to even blink while this is happening for the fear of losing everything.
But, they would be damaging the organisation quite badly. When this extraordinary Leader leaves, the Company will come back to Zero.
This is perhaps the most dangerous of all the situations.
How to build your way of Leadership in a conscious manner?
I would say that the type of Leadership that you adapt should develop the People in the System continuously. It should be a very strongly Process oriented approach.
I have heard from some accomplished Leaders that Process is not required when a Company is Small, and it is required only when your Company is beyond a certain size. I would invite these Leaders should look at their definition of ‘Process’. Are we straight jacketing our definition of ‘Process’ meaning something that will deliver results only in the medium / long term? A small company / unit requires to deliver results quickly. A Baby who is trying to walk for the first time needs to develop the muscles in the legs. He can’t be worried about preparing for University examination. But, the Process that he adapts should aim at delivering the Short term results only. A Baby that has to learn walking will be helped by her Parents to practice this walking in a controlled environment where the Parents remove all obstacles in the Baby’s path and one Parent releases the Baby while the other goads the Baby to move and come to him. There is a process happening here!
I would say Process focus is a must whatever the size of the Organization. If you don’t have a method of doing your work, then the results happen only by chance.
I would lay down Three Components of ‘Your way’ of Leadership:
01. Your Expectations: A Team develops to meet the expectations of its’ Leader. If your Expectations are set in miserly manner, you are short circuiting the development of your Team. At the Same time if you have too high and unreal expectations from your team, it won’t work.
Please note that it is your Team who will decide whether a Target is unreasonable or not. If they feel it is ‘unreasonable’ and you feel It is ‘reasonable’, the onus is on you to prove it can be attained. Not on them !
If you don’t agree on a Target, please note there is no communication happening !! You need to STOP here and fix this.
You need to have a good Vision of what you can expect from your Team. You need to stretch the Team so that the BEST comes out of them. I would say that this ability of Leader to set the Right expectations is an art. He/She has to look at their team and know how to set expectations and rise the expectations slowly. The speed of raising should be slow enough not to leave too many people behind and fast enough not to disappoint the team members with good capabilities.
The Leader should be very clear about the Targets for this year broken up in to Monthly / Weekly / Daily Targets. Leader has to guide the Team to break up the Targets and ensure they know what to do today to achieve their Weekly / Monthly / Quarterly/ Annual Targets.
01. Your Follow-up: A Leader has to work out his own way of Follow-up with his team. The Follow-up tools will include the following:
a) Business Reviews: Regular Business Reviews and Fixed agenda for these Reviews is very important. If you ask ‘x’ number of Questions every week and you are asking the same questions, the whole organisation designs itself to answer your Questions. Definite paths develop in the organisation along the questions that you are asking. A good Daily Work Management (DWM) (You can get certified as a DWM Specialist with the help of an E-Learning Course from IMA) with good KPIs helps this situation. What is important is to ensure Business Reviews are happening at ALL levels. Not just your Reviews at the Top.
b) Motivation system: The Motivational methods in the Organisation should be continuously tweaked to push the Objectives of this year. Many companies who have some motivational systems have FIXED systems. This does not help. Your Award and Recognition systems should be evolving continuously.
c) Organizational Initiatives: When you are pursuing a set of targets in the Company, you may see a need for taking a bigger action in one area. Example : If too many accidents are happening in your Shop floor, you may feel the need for a major improvement in the area of Safety. You may appoint a Subject Matter Expert either as a Consultant or a full time employee to push for a revamp of Safety systems. These Initiatives are important to help your Company to make some bigger improvements.
d) Deep Dives: In some situations, just reviews are not enough. You may want to get down to the Shop floor / Market to lead some Activities. Eg. In a tough Market environment, You may want to go out and meet the Dealers across the Country to find their views about Market status. Look at what is working and what is not working so that you can motivate the team to get results where they can. These Deep Dives are very much needed to know the Status on the ground and to understand the Problems on the ground.
e) Bench mark visits: It is very important to take the Team to look at other Companies that are doing well. Nothing teaches your team better than a working model. Many companies are quite open to receive teams and share their experiences provided you know the Questions to ask. Companies are available across the world in different economies. Bench Mark Visits have to be timed well. You need to take the team to these companies when they are ready for that. A wrongly timed visit will have no impact.
Many a times the Leader adapts only the Business Reviews for Follow up. Even these Business Reviews will end up in lot of questions rather than answers. This will demotivate the team rather than motivate them! Be careful about this aspect !
Try and put yourself in the environment that you are giving your team and see whether that environment motivates you. You can ask for feedback from your team too!
3. Your Guidance: We spoke about Your Expectations and Your Follow-up. I am talking about another aspect of Leadership. How do you guide your team to put the pieces of the puzzle together and find their way around?
A Sales & Marketing Manager has to build the Process of Selling and Marketing. If he has a wonderful process, he should be delivering consistent results in line with your targets. If he is delivering, it is time to raise the bar. But, the continuous development in the process is a must. Being static is being dead! How do you guide your Colleague to improve his methods?
A HR Manager has to keep measuring their effectiveness in developing people. There is so much modern technology today for People Development is that he should evolve a better process every day. How do you guide him to develop better and better methods fo improve Human efficiency and Human Learning methods?
A Finance Manager has to look at better and better methods to monitor all the costs and understand the activities that are causing the cost. He should make the activities so transparent that anyone can monitor them and control the Costs. How do you guide him in this?
A Leader has to guide her team members to develop these processes in every interaction that she is having with them. This is the higher purpose of Business Reviews! We are not reviewing them to just push them hard!!
To give this guidance, the Leader need not be expert in everything. All that he needs is a systematic thinking and patience to guide. I would say each Leader has to spend at least 2 hours per month with each of their team members to look at the processes and guide them to improve the processes. In some cases they may spend more time and in some cases they may spend less time.
Using the above aspects of Leadership and other aspects that you may feel necessary, it is required for you to build YOUR WAY of Leadership that continuously evolves and that delivers Consistently!
If your team is getting consistently better results, this is one indication that you found your way!
When you look at a typical Manufacturing Company in India, the usage of IT is very limited. A small percentage of Big companies use IT in an effective manner. While a great majority do not use the Quality, Manufacturing and other Modules in ERPs like SAP even though they would have paid for it and they lie unutilized in their servers.
Resultantly, most of the Important work in Manufacturing happens off line. We don’t try to control the Manufacturing process as it is happening. Most of the controls are off line. We seem to be letting defects / problems happen and then we are reacting.
Can we go more online?
I think we should go much more online than what we are right now. I would recommend using some Apps for specific purposes. I would recommend using IT in two areas to begin with:
a) How Employees Learn
b) How Employees pursue Routine
Let us examine how we can use I.T effectively in these two areas.
How Employees Learn
Objective of this exercise can be to reduce losses on the shop floor and improve efficiency by bringing a focus on to the Skills and Knowledge of every employee in the Shop floor.
Today in most of the Companies there is some focus on the Skills of the Workmen. In most of the Companies this focus is very weak. There is no effort to continuously improve their skills. Focus on the Skills and Knowledge of Staff is much lesser. Only a very small percentage of the Companies the Staff are getting trained in a systematic manner.
We can’t afford this anymore. We need to become very efficient if we want to grow our top and bottom lines. Let us act on this !
I would suggest defining the Competencies that all the employees need. These competencies may cover:
a) Product Knowledge:The employees need to have good knowledge of the Products that they produce.
b) Process Knowledge: The Manufacturing Process and the process in every function can be another focus area.
c) Systems Knowledge: The Systems that the company may be following can be another focus area as this will ensure employees know the way of working in the company. Eg. Manufacturing system, Daily Work Management System , Policy Deployment system etc.
d) Functional Knowledge: This covers the knowledge that each Staff member needs to have respective to her function. Eg. APQP / MSA / Problem solving knowledge for Quality Engineer.
Bring the Training online
You can bring the Training on these topics online by doing the following:
- Define the Training agenda for each employee covering topics from the above 4 fields.
- The topics defined should have close link with the requirement of Knowledge and Skills to achieve the goals for that year / Quarter.
- Divide each of the Competencies in to several Micro Competencies / Skills as applicable. We should go really micro so that the topics become small enough for easy consumption.
- Have Learning hours every week. I would recommend at least 2 hours every week.
- Make the Learning content available on line on the cloud.
- Define Certification Standards for every Micro Competency / Skill in terms of Knowledge, Implementation and Results.
- Certify the employees continuously for the Micro Competencies.
This will ensure that the Employees will have continuous focus on Skills, Knowledge. This will ensure the efficiency on the shop floor improves.
The Training and Development has to be owned by the Functional Leaders. They will be the Sponsors of the Training as they will have to show the ROI.
By bringing focus on Skills and Knowledge, the Functional Leaders can make huge progress on the efficiencies in the shop floor and that will more than pay back their investment on the Training.
How Employees pursue Routine
Routine is something that is not very exciting in a Manufacturing facility. But, without a strong and consistent routine, the heart beat of the facility can not be consistent. Most of the problems that Manufacturing Companies face is usually related to a violation of Routine.
Defects happen as the SOP is not followed, High Break downs of machines happen as the Preventive Maintenance does not happen, New Products do not perform better as the New Product Development process is not followed well. The list can be very long.
Strengthening the Routine in a Manufacturing Company can give very high returns.
If you look at how the routine is being followed now, it is mostly offline.
- Quality System is verified off line.
- Machines Preventive maintenance happens offline.
- The Production Routine of a Supervisor happens offline.
- Safety checks happen online if they happen.
How do we bring the Routine of the Shop floor online? I have some suggestions.
01. Online Quality Checks: Develop a Software that will work on hand held devices (may be smart phones) that can do the following:
a. Trigger Quality checks on the basis of the Product that is running on the line.
b. The triggers may go for People across the hierarchy to take care of the ‘Layered audit’ principles making Quality the Collective responsibility of Employees at all levels and not just the responsibility of that Junior Inspector of Quality on the Shop floor.
c. The Data will be accepted in various ways by the Software:
i. Physical data entry by the person to whom the check is triggered.
ii. A Photographic input for Visual Checks.
iii. An electric pulse from an Instrument having capability to give output.
iv. There can be more ways in which we can collect actual data on Quality.
This will ensure that the Quality System becomes online and the checks that are happening and not happening will be clear. Quality can be controlled online.
02. Online Safety system: Similar to the above Software, one can use the concept for Safety checks too. The input can be similarly taken. In addition to the inputs mentioned above, the CC TVs that are available in Shop floors can be used to identify unsafe acts and alert the concerned employees.
03. Online Maintenance Checks: Again, the approach is same as explained in s.no 1. The Supervisor / Operator will check the Maintenance points on line. The machines that have Breakdowns and Machines that already have Zero Break downs can be treated differently in terms of the checks that you do.
04. Online Assembly line: The Assembly Lines can connected to Internet and following actions can be brought online:
a. Start up procedure. Many of the Start up procedures can be automated where the Software will sense the presence / absence of certain parts / resources. The Pressure in the airline can be sensed by a Transducer and recorded.
b. Running Status recording. The Line may stop for various reasons. The losses may be entered by the operators to ensure we capture the losses. The Software can ensure this.
c. Who is working at the Station. This is quite easily captured by the Software for traceability purposes.
d. No Fault forward. The Defects that can happen at each station can be defined, Quality checks to capture these defects can be available at every station and using a RFID / Barcode system we can prevent a defect going to the next stage.
e. Line Work Management. The Line can display the data on Production / Losses and escalate the information in case of Line stoppages and other inefficiencies.
There can be several more ways in which the work on a Shop floor can be brought online. When we do it, we have tons of data coming up from the shop floor.
Analytics: We need to have our Engineers trained to analyze this Data and take learnings from the data. The learnings may include:
- The Quality checks that are getting missed out and address some practical issues that may be there in carrying out these Quality checks.
- The Engineers who may be missing Quality checks at a certain time of the day and this data can help us to understand the way of working of the Production Engineers and help them to arrange their work much better.
- The Safety points that are getting violated frequently and what needs to be done to avoid these violations.
- The Breakdowns that have relation to running a specific product and specific operation.
- Relating the defects to the people / conditions / time will become easier.
There should be a small team who does these Analytics, takes the learning and does something about it.
When you go online, the Team has to become more Disciplined and more knowledgeable about everything around. The training discussed earlier will ensure this. The Online working will also highlight the absence of Knowledge and Skill of People much more.
Indian Companies have to shift to working Online earlier than what we think.
Are you getting ready?
We have been discussing about preparing for the advent of Industry 4.0 and how Indian Manufacturing Companies can prepare for the inevitable. We discussed how various Functions in a company can get ready for Ind 4.0 situation.
In this article, let us discuss about the Leader of the ‘Future Factory’. What are the Capabilities that a Leader of Future Factory needs to display?
A Future Factory will be characterized by the following:
- Definitely a Less Manpower environment.
- Highly Automated set up.
- Much higher Manufacturing Technology.
- Much higher Capacity in each Factory due to the automated set up.
What are the Competencies required for a Leader of this type of Factory?
I would say, he requires the following Six Competencies:
01. Analytical Capability: The Leader of Future Factory will have to be very comfortable with Data. He should be able to make sense of the Data and should be ready to use Data Analytics to make sense of the happenings around him/her and take actions. The typical situations that require him to show this capability can be as follows:
a. The Online Quality System in the Factory is throwing up a lot of Data about the Process status. The Analytics Software is showing a number of Patterns of Data. The Software is continuously learning (AI) and showing new meanings from the old Data. The Data analysis of last Six months just showed a Pattern that can be a Solution to the Biggest Customer Complaint that the company is having. The Quality Team has to be supported in understanding this data as it is the first time a new sense is being made from the old data.
b. The Zero Break down record in the Factory has to be maintained by managing the various Sub-systems in each of the Machines in the Factory. The Data from monitoring the Temperature, Vibration of various parts of the Machine has to be made sense of and Predictive Maintenance has to be improved.
c. The Software that the New Product Development team is using is throwing up lot of Analytics that can be used to Learn from the Development and apply learnings to the future products.
d. The Problem-Solving Software that is helping the Engineers to solve the Problems is capturing lot of interesting Data. This data has to be used to draw lessons for New Products.
e. Finally, SAP is being used more effectively. The Cost Data is getting generated as per each Activity. This data has to be analyzed to identify Wastes and eliminate them.
There can be myriad more ways in which the Data will be generated and will have to be interpreted.
The Factory Leader does not have to do all this job herself. But, She should be able to give Leadership to her Team to adapt this point of view.
02. System Builder: The Leader of the Future Factory has to be a great System Builder. Wherever he sees a Problem, he has to look at a System solution for it. If he Looks at solving the Problem for today, then the whole System can be short circuited by this problem and the Desired result will not be forthcoming.
Eg. In a Highly Automated Factory, the output from Dust Collector is Designed to be collected by a Pneumatic System and taken to a Dust Storage system. Now, when the Pneumatic System Breaks down due to Dust contaminating all the Seals / O rings in the system, the Factory has to look to alternative System that can withstand the Dust. If temporary solutions are looked at or if the Pneumatic system is kept idle and the factory goes back to manual collection of Dust, then very soon the Manpower will creep in and the inefficiencies will go up.
The Leader has to look at building a System around everything. He should be looking at Killing problems once and for all.
Eg. An Automated System is giving a problem handling some specific parts of the Company. While it is suitable to 75% of the parts of the Company, it is giving trouble handling 25% of the parts of the Company. The efficiency of the system is pulled down. Immediate Solution is needed for this problem. The Company set up a team to solve this problem while not reducing the efficiency of the whole System. Along with this, the Leader has to ensure that the Company learns from this experience and the next Factory has to take care of this problem from word go. The Design team also has to learn from this Process incident and ensure the future New Products are Designed to take care of this manufacturing aspect. The Leader has to ensure this at a total system level.
While these Qualities are required even in a less automated environment, the costs of not doing it are very high and can be lethal in an Automated / Ind 4.0 environment.
03. Avid Learner: The Leader of a future Factory has to Learn on her Feet. This can be a great challenge! The Learning is not just for her. She has to ensure the Learning is there at Organization level.
In the Future Factory, there will be a lot of Data just about everything. There will be Data Analytics team in the Factory and they will be throwing up a lot of Data and Interpretations.
The Leader has to encourage the Team to Learn from this Data. Otherwise there is no use of this Data.
Other than this Learning within the Factory, She also has to Learn from the outside world. She has to understand how the Customer is progressing in his Business and keep shaping up the factory to suit the Customer.
Eg. Customer’s Data Analytics may show that Demand for a particular product may be going up 3 months from now. The Factory Leader has to take this information, deal with it and also ensure that the Sales team is continuously picking up these cues from the Customer and help her shape the factory to suit it.
The Learning also has to cover the Ind 4.0 elements. The Factories across the World would be having new learnings from same elements almost on a daily basis. The Leader has to learn from the information available on the Public domain and she has to participate in suitable events like Technical Symposiums to keep learning from the environment.
Paid Factory Tours, Supplier Seminars, Industrial Exhibitions, Industry association events can be some sources for new Learnings.
Every Leader has to organize her own combination of events that will give her chance to pick up learnings from the relevant environment around her.
04. Integrator: This role can be part of ‘System Builder’ Role. But, as it is a very important function of a Future Leader, this is being discussed separately.
A Future Leader should be able to look at a Quality Problem and link it to the Machine, Manufacturing Process, Maintenance Practices, Improvement required in Design of the Product, the improvement required in designing the next Machine and how the factory has to work in future to avoid this Problem.
This is a very critical ability and not easy to master. It is not required that the Leader should be expert across the Board in all Functions. But, he should be able to see the linkages clearly.
The Future Factory would be working as one unit. The differentiation between one Function and the Other will disappear to a large extent. An Engineer would be required to have expertise across Functional areas as they exist today.
A Leader should be able to mold such Engineers!!
05. Team Developer: Factory of Future will be such that it will work as a unit or fail as a unit. Working partially will be difficult due to its connected / automated nature. One system depends on the other. So, if one System is not working it will affect the other.
The Team work and working as a unit are required much more than the non-automated environment.
The information between the various areas of the Factory has to flow seamlessly and the whole team has to deliver the result together.
Eg. The Shop Engineer (Who will handle Production, Quality, Maintenance) at each stage of Manufacturing has to interact with the Engineers at other stages and also interact with the Data Analytics Engineers (Who will be the new breed in every Factory) to make sense of the Factory performance and take actions on a daily basis.
The Leader of the Factory should develop his Team for a smooth daily interaction and ensure they work as a team.
06. Frugal Engineer: In the environment of highly automated factories, the difference between your Company and a Company in USA/Europe can totally be blurred as both the Companies will be having equally automated factories (may be same supplier of equipment too).
What can be the key differentiator for an Indian Company? If the Leader is a Frugal Engineer, he can help the company not to throw Big money at the Machinery. Spend just as much as is needed. Design the Product with just enough meat and don’t give away more than needed (Russian Designs are clearly out of fashion). If your Company can either make do with 75% of the Automation as in USA and give same output or if you are able to take 25% more output from the same Machinery as in USA, then you can have a leverage over other world Manufacturers.
In Future Factories, your competitor is not just the company in NOIDA. You will have to compete with the one in Detroit too.
India is having a very high number of Engineers. Not many Countries can match us in this. The Leader of Future Factory should be able to use the capabilities of these Engineers to differentiate ourselves from the rest of the world in efficiency and money for each Rupee of investment.
These are some of the Capabilities for the Leader of a Future Factory! There can be more. Some or all of the above look like they are needed today too.
01. Many Leaders of Today Factories do not have these Capabilities. India is very big and we have too few Leaders with these Capabilities.
02. There is a subtle difference in the same Capability that is needed for tomorrow. I am sure you will notice in the above discussion.
Are you a Leader for the Future Factory?
John reached the office at 8 am itself. John is the ‘Manager – Marketing’ in the Automotive ancillary company. Normally he comes to office at 8.45 am as the office time is 9 am. But, he is very enthu about coming to office on every Monday as he has his Learning hour today. He can access the Learning programs from his home. But, he loves to sit at his desk and complete the Learning for the week undisturbed. His son has grown up. But, still there is some time to go to School. While at home, John loves to play with his son. He was worried his son will disturb him at his ‘most favorite work’.
John logged on to the ‘Learning Management System’ of the ‘Training and Certification Partner’ (whom the company of John appointed a few months back to manage all the learning of the employees). There were Two Micro Learning modules waiting for John. John also took out the Work book that reached him the Friday evening. The ‘Work book’ helps him to write down a few learnings and also do a few exercises.
John started going thru the E-Learning video about ‘Dos and Don’ts while designing the Social media promotion’. These are John’s company’s own Check list of what can be done and what cannot be done while designing the Social media campaigns. This week John has meeting with his vendor for Social media campaign. John is working out the agenda with them so that the Vendor company can go on for the Quarter.
John also has another Learning module about ‘Preparing Marketing Plan using 7Ps of Marketing’. This is slightly longer module. It goes on for 20 minutes. John has to initiate his team to prepare the Marketing plan for the next year. This is a refresher course for John. This module teaches John about ‘Their company’s way of preparing Market plan’. John goes thru this module every year before he starts the Market plan work. It helps him to refresh his knowledge about Market plan preparation. It helps him to guide his team very well.
John could see on his home screen of LMS that he has a few more modules coming up for the next week and the week after. Each week he has to spend about an hour on learning. This practice has started in his company three months back. The E-Learning videos given by the ‘Training and Certification Partner’ are quite interesting to go thru. They always build a situation around the learning and render the learning thru an animated video. It is quite fun to go thru the video and learn the concept.
At the same time, the Production Manager of the Company, Vijay was passing through Marketing department. He saw John and stopped for a chat. ‘Hey John I see that you are starting the week with your Learning agenda for the week. Great way to start the week’. John agreed with him ‘Yes Vijay this is my most favorite part of the week’. This month I am expecting to complete my Learning agenda for the Quarter and I will get a Certificate from our ‘Training and Certification Partner’’.
Vijay was happy to hear that ‘Yes John, that is great. I have completed two Micro Modules at home yesterday Sunday. It took me an hour to complete both of them and take the test too. Now I can peacefully attend to the Customer visit today’.
Vijay also has a Weekly learning agenda for himself. He can remember how they had some problem in getting used to this ‘Weekly Learning Agenda’ introduced by the ‘Training and Certification Partner’ along with the HR & Operations Head. But, those initial troubles settled down in the first month itself. The Learning was made fun and everyone waited to go thru the Learning modules.
Learning @ the Speed of Business
Exwhyzed Limited, the company of John and Vijay adapted modern learning methods using technology 3 months back. They outsourced the whole Learning agenda in the Company to an outside Partner who are experts in Manufacturing and Learning Methods. This company consists of Manufacturing Professionals who are good at Learning methods. They understand all Business aspects unlike many IT companies who are only ‘techies’.
The new way of learning meant the following to the Company:
- The Training and Certification Company identified the Skills that are needed for every employee. This constituted Functional and Behavioral skills.
- On the basis of the Business agenda for the Year / Quarter / Month, they identified the Learning priorities of the Company’s employees in different functions for the year.
- These Learning Priorities were something that would help employees immediately in handling their Business agenda. They learn and they use the skills immediately.
- The Partner company developed Interesting E-Learning Videos on the specific topics.
- Wherever some very BIG topics are there like Lean Manufacturing, there was some face to face training was there too at the beginning of the year.
- The Partner company set up a ‘Learning Centre’ for the company that had physical facilities for training as well as a few Work stations for company’s employees to take E-Learning Lessons. Whoever wanted to use this facility could come to the Learning Centre. It is like ‘Library’ in the Company. Silent and inviting.
- The Partner company interacts with the HODs and HR every month to understand the Learning agenda for each employee in the Company. Then they populate those Videos in the Learning Management System. They give access to the employees as needed.
- The Partner company’s employees follow up with employees who are lagging on completing the Learning modules and motivate them to complete the courses. There are hardly any laggards as the Learning has become priority for everyone.
- HR has already announced that ‘Skills Certification’ will be mandatory from the next Quarter for every employee.
- The employees can access the Learning modules from their Smart phones too. This made it convenient for the employees to complete their weekly learning agenda. Usually the Weekly Learning agenda does not cross about an Hour.
- The Partner company along with Operations Head monitor the Target achievement of the employees on a monthly basis. The Learning agenda of employees is Fine-tuned on the basis of their performance.
This methodology started working very well in the last three months. This way each employee would Learn for 6-8 days in every year. This is quite healthy to start with. The best thing is, this learning is directly linked to the Results that the employees are producing.
Revolution in the Learning methods
The above scenario may very well exist in many Companies World Wide in next few years.
Today the technology that is available to all of us enables us to do this. The Learning has to become ‘Contextual’ and it has to be given at the ‘Point of need’. This would make the Learning very effective.
The Learning Modules that the company develops would be a one time investment. But, they would be available to the company forever. I suggest an external Partner as this would be a very big change that a company would be implementing, and a Partner initially can help in a big way.
Even today, when an employee is forced to learn about something because he does not know that topic, he takes to ‘Google’. He will try to learn that topic by hook or crook. So, the willingness to learn is there.
Unfortunately, there are somethings that he can not learn from Google. These are typically Company specific Product knowledge, Process knowledge etc.
We only have to create our own resource bank for the employee. Employees are willing to learn on the go using their smart phones or tablets and so on.
This is a very important aspect of Digitalization that a company has to go thru. If you are able to activate your employees and make them more effective at work, the results can surprise you!!
When are you starting off?
In many companies, the cost of White-Collar Staff is very significant. By international standards, the number of staff that Indian Companies hire is significantly high. The Productivity of the Staff in a company seems to be very low. We seem to be throwing ‘Warm Bodies’ at work and problems! More Problems, more ‘Warm Bodies’..
The Indian Companies have been waking up to the higher costs of employees in the past Decade or so. The profits are under pressure. Top line is not growing as aggressively as one may want.
In this situation too, many companies have been addressing the Blue-Collar cost. Companies have been trying to hire cheaper and cheaper labor. I know many companies who try to run the whole Manufacturing Plant with temporary and low-cost labor. Genuine attempts to improve Productivity have not been many. Indian Companies have a long way to go in improving the Blue Collar Productivity.
By Comparison, the White Collar Productivity had been an unexplored area for most of the Companies.
No Standards for work!!
Most of the Companies do not have a Standard for the work of the White Collar Employees. What is the work each Position should be doing and what is the Standard time and effort that each of the work is supposed to take?
Resultantly there is no measure for the work of the White-Collar Employees. When something is not getting done, more employees are recruited. Sometimes having more people will result in more confusion and more inefficiency.
The other side of this continuum is that some companies simply refuse to recruit White Collar Employees or fire who is there. Even this act will not have any rationale. Usually it is the ‘feel’ of the Boss who may just ‘feel’ there are too many people and they are ‘wasting’ their time!
Direct and Indirect Cost of White-Collar Employees and their work
The White-Collar employees are tasked in every company with very important tasks. They decide what Raw Materials have to be purchased, at what cost, how much inventory to keep, what price to sell a product, how to market the products and many other crucial decisions.
So, the money that the Companies spend on the Salaries of the White-Collar employees is only a small proportion of the Total cost. The Cost that this group of Employees can inflict on a Company is huge. They and the work that they do can either make or break the Profits of a Company.
Hence, this category of employees deserve a much higher Quality attention! It is not enough to just focus on Blue collar and drive their productivity !
What needs to be addressed?
Companies need to consider addressing two elements of this category of employees.
01. The numbers in this category. How many people you have and how you can optimize this number? This ensures you spend as little as possible on this category of costly employees. This addresses the Direct cost of White-collar employees.
02. The Quality of the work and decisions of this category of employees. Companies need to pay attention to this as they can inflict a very high cost on the company due to the quality of the decisions that they may take.
Let us address these issues in two or three articles.
Addressing the Direct Cost of the White-Collar Employees
This again can be addressed at two levels. You can improve the Productivity of White-collar Employees in two phases.
a) Multiply the Productivity by applying the Lean Principles.
b) Go to a new level of Productivity and way of working by adapting Technology tools that are available today.
Multiply the Productivity using Lean Principles
I would suggest a methodology to address this area.
While many companies may have KPIs for their Employees and may be some of them are using them well, the Productivity at Task level may still be suffering.
Have a Target: When you start improving the White-Collar Productivity, it is important to have a CLEAR target. I would suggest the target as ‘Avoid recruitment for next one/two years’. Do not start with a target of ‘Cutting 25% of Staff’. This would be like cutting the foot to fit the shoe. While this is so basic and everyone should be knowing, I see many companies just firing Staff to reduce costs!! A Good team is what the Management should be looking to build. They would reduce costs and improve profits!
Log your time: Encourage the employees to log their time and find out what are they actually spending their time on. You can give them Log sheets and ask them to capture what they are doing and to what KPI is it really related to. This effort may give you a long list of activities. Pick the Pareto items for improvement. You need to do this for each Position in the company.
Time Study: Study the specific Tasks on which you are spending significant part of your time. By capturing the micro details of the Task, you can examine the various losses that you have in doing that particular task. Usually you would have very BIG losses.
Identify Kaizens: Identify the improvements that you can do to reduce the time that the task takes. The improvements may involve changing the Work flows, changing the authorizations, improving the ERP features and many other activities.
Carry out the Kaizens: Here, the company has to move with some great purpose. One should not be stuck with some Kaizens that are difficult to implement. It may involve modifying your ERP and modifying your methods. Good amount of ‘Change Management’ is needed here.
Multiply the Productivity
One should aim at improving Productivity by 2-3 times with this methodology. A lesser target will not justify the effort and possibilities that are there in every organization.
Wherever IMA handled this type of Project, the improvement in Productivity was at least twice.
What is critical: Try out in one model area. Take the help of outsiders in this project. An outsider can bring a fresh perspective for this work. But, you should develop an internal team that would focus on Productivity of People forever.
Next Article: We will examine how an Organization can transit in to a New Way of working at the next level of improvement.