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Sunday, 09 February 2020 00:00

Business Diagnosis

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This is the time around the end of the Financial Year when you have to look at your Performance in the current Financial year and take some bigger learnings from it. Every Employee in the Company should be encouraged to have a look at his/her performance in a structured manner and then learn from it. 


This is what I am calling as ‘Business Diagnosis’.


Learn from your Performance: Every Business Team tries their best to achieve all their Goals for the year. Whether they achieve the Goals or not, there is always learning from the year. It is critical for a Company to learn from its’ performance every year. This learning does not happen unless there is a process to it. There should be a process by which everyone in the Company looks at their own performance last year in a systematic manner.

Recently an Entrepreneur friend told me that his team took decisions about New Products on the basis of data collected from Customers and that is his BIG learning this year. Earlier they used to take decisions just on the basis of judgement of their internal team. 


Are you going towards your Medium-Term Plan: The Company can anchor around the Medium-Term Plan that they have created? Is the Company going firmly towards it? A Business Diagnosis can help you to keep yourself firmly on the path to the Medium-term plan. If you are veering off the path, the Business Diagnosis is a chance to come back to the Path. A Company that is chasing the expansion to ASEAN countries looked at their performance and decided that they need a separate Project Team as their Sales team is not able to pay attention to the regular Target chasing and also the expansion to ASEAN countries. This happened after they kept flogging the Sales team and finally took this call. 


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Description automatically generatedAre you going to go beyond the Medium-Term Plan: Today the Business scenario is changing fast. When you have completed one year in your Three-Year Plan, you may have got some new insights in to the Business and you may decide to change / modify the Three-year plan. The Annual Business Diagnosis is a time when you may just do that. A Company who are setting up a new Factory have decided that they should leverage Industry 4.0 in their new factory, and they decided to change the Goals in the Three-year plan and took much tougher Transformational Goals for the Three years. They are confident Industry 4.0 will help them to achieve these stretch Goals. 


Scope for the Diagnosis

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The learning that you get from the Diagnosis will depend on the level at which you would do the Diagnosis. How open are you to learning? Are you willing to question the direction in which your company is going? 


Normally there will be no problem in learning at the Lower / Middle level of your Organization. As long as you give a good Process for the Diagnosis, they would be applying it and bringing out the Learnings. For these teams, you need to help them dig deeper and take more learnings. 


For the Senior Team, the problem would be that of acceptance of the Process. You need to help them to go beyond their Ego and become open for learning. This can happen if the Chief Executive is serious about learning for his organization. If the CEO is not serious, then no learning can happen. 


Some of the areas in which the Learning can happen are:

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-       The Businesses that the Company should be involved in

-       Medium Term Goals

-       Strategy of the Company to reach the Goals

-       The Organization structure of the Company

-       The Overseas Strategy

-       Manufacturing Strategy in the light of Ind 4.0

-       Marketing Methods

-       Sales Process

-       Engineering Strategy

-       Tooling Strategy

-       Machine choices for Manufacturing


..and many more. 


Process of Diagnosis


You need to look at your performance through different lenses of the process of getting results in a Company. 


Choose the areas in which the Diagnosis can be done. Normal areas will be the KPIs of all members of the Team at all levels of the Organisation. 


But, very often there can be learnings on Processes cutting across the KPIs. The Process of setting KPIs itself can be one area for Learning. 






Target Setting and Planning for Performance


How did you set the Targets in your Chosen area of Diagnosis? Were the Targets too tough or too easy? Were there Targets for Processes and Results as appropriate? Were the Targets broken up into Micro Targets that you have to achieve on a daily /Weekly basis? Was there enough linkage between the work that is happening today and the target that has to be achieved at the end of the month? 


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Description automatically generatedTargets are not useful if they are not tight enough. They are also not useful if they are too difficult to achieve. Every Company has to go thru their own Learning process in the area of Target setting. 


Targets also need to be deployed systematically to the whole of the Organization.  This has to be checked. 


Was there enough Planning to achieve the Target? Was the Plan detailed enough? How was the success of the Plans? Was the Planning process good enough to produce Plans for all situations? Which are the Plans that worked and which that did not work? Why they did not work? 


All the important Planning Processes like Annual Planning process, New Product Planning Process, Strategic Business Planning process, Manufacturing Planning, Sales Planning have to be reviewed and improvement in the Processes has to be initiated. 


Planning is an important Process in any Company. Most of the failures in any company can be traced back to an inadequate Planning process. Production Planning may give out low success if the Material Planning is not good enough. 


New Product Development process may not help to achieve the New Product Sales for the year when the New Product Planning is not done in adequate detail. 


Sales Target may be continuously missed out if the Sales Planning at every Region is not happening in detail. 


Getting things done


How good is the process of getting things done in your Company? Once you have Energizing Targets and Detailed Plans and Planning Process, you need to have good process for getting things done. 


Getting things done involves several practices like:


-       How well are you monitoring the Plan vs Actual? Do you have good Dashboards to monitor Performance?

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Description automatically generatedHow well are you motivating your Team towards the targets? Do you have methodology to encourage appropriate behavior towards achieving Targets?

-       Do you have Skills defined for your Staff for achieving the regular and special targets? How well are you Training your team?

-       How is your Cross Functional Working? How is the cooperation between the Functions towards achieving the Targets?

-       How are you using I.T for getting things done in the Company? Today there is enough technology available to help you get things done.



Feedback: It would be useful to take feedback from your Teams about the problems that they face in getting things done. 

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Sometimes Customers and Suppliers will be able to give very good feedback about how well things are getting done in your Company. While our thinking can be at one level, feedback from our Customers and Suppliers can be from an entirely different angle. 



How well are you doing Business Reviews?


How are the Business Reviews happening in your Company? Are you reviewing the Status of the Goal achievement and helping the Teams in time?


-       Are Business Reviews happening at all levels in your Company?

-       How is the effectiveness of the Business Reviews?

-       Is there a process for the Business Reviews in your Company?

-       How is the follow up between the reviews?

-       Are the teams enthusiastic about Business Reviews?

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Business Reviews are perhaps the most important aspect in Indian Business environment. Without proper Business Reviews Getting things done may not happen well. 


Are the KPIs being reviewed systematically or the Reviews are becoming an occasion for Bosses to let out their steam?


Are the Business Reviews happening with a good presentation by the Team member? Is there a preparation for the Business review from the Team members? The real learning for the Team members happens when they prepare well for the Business Review. 


This author has written another article on ‘Business Reviews’. You may refer to that article for more details.



How good are you at making Course Corrections? 


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Description automatically generatedProblems in Manufacturing and Business are common. How well are your team members implementing the Corrective actions? 


There are many Companies that are not good at this. As Corrective actions are not happening, the same problems continue forever. 


Some of the areas where the Companies get stuck are:


Company Growth: The Company seems to be planning for a great growth every year. But the company keeps failing on the Target achievement. The actions that need to be implemented in the field are not happening and the teams seem to fail in the implementation time and again. 


New Product introduction: The Customers seem to suffer same problems with New Products. The New Products do not come on time and they come with many problems. This is continuing for years. The Company do not seem to get out of this habit. 


Quality Problems: Companies deal with the same Quality Problems forever. Customers keep getting the same problems. The Teams seems to solve the Problems. But they keep coming back. The Corrective Actions implementation and sustenance may be the issue.


Is your company stuck in some areas? It will be good to identify these areas where the Corrective actions are not happening, and learning is not happening. 


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This way the Business Diagnosis can help your Company to learn from last year and take some bigger Corrective actions. 


Are you learning from your Current year performance?


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