The Indian Economy is undergoing a tough phase. Top line growth and Bottom line existence are coming under threat. Companies need to raise their game in using their teams to the next level. Traditionally Indian companies have not been focusing on developing the People. It is time to realize that without developing the team, we will keep having BIG teams of lowly skilled team members contributing sub-optimally. Let me discuss a few examples that I observed in Companies to stress the importance of focusing on Competencies of Team members.
Shyam is the Materials Manager of Exwhy Limited an Autoparts company. The Company’s Raw Materials Inventories hover around 55 Days most of the year. Shyam is simply clueless about how he can control the Inventories. There are no methodologies in the Company for controlling Inventories. Shyam is simply unaware of practices like Kanban, Supermarkets and other Inventory Control Methods. Every month the blame for high inventories is put on lack of Forecasting of Demand and Inventories continue to be very high eating away the Profits of the Company. In addition, the Company keeps losing out on Top line due to Material shortages.
Ram is the Machine shop head. There are 55 Machines in the Machine shop. The Production Scheduling in the Machine shop is very inefficient, and Machines keep idling for significant amount of time. The Company has high Variety and low volume. There is absolutely no focus on the SMED. Ram is not aware of any of these Techniques. He had been in the Company for 12 years and wields a lot of clout with the Senior people in the Company. Company keeps losing out on the Utilization of Machine shop which is around 52% in good months!
Som is the Materials head of the Company. The Company’s Manufacturing involves a lot of Assembly activity. The Assembly just does not work as per the Production plan released by the PPC. Everyday there are many Schedule changes due to Material shortages. The Company is not able to supply on time to its’ Customers. Their Ontime delivery is around 40%. Company is losing out on Market opportunities in a big way. Som is simply not aware of how to eliminate these Material shortages. To give a good solution for this Som needs to have knowledge of Kitting, Kanban, Production Planning concepts, Supplier Development, Some Leadership Qualities to bring the teams across the functions together for solution.
Peter is the Sales and Marketing Head of the Company. Due to the tough Economic situation, the Demand for Company’s Products is low. But there are opportunities in the market for New Product introductions. The Company is very inefficient at New Product Development and launching the Product into the Market. They keep taking very long time to do this and inevitably they keep losing 2-3 years of Sales in the process. Peter needs a combination of Competencies to drive this better in the Company. He needs to learn how to collect VOC (Voice of Customer) properly, coordinating a faster Product Development, Managing the Launch Process, learning how to select the Segment where he wants to operate in the market and so on. Peter lacks most of these Competencies. Company keeps suffering due to this.
I can quote a number of Examples like this where the Companies are having huge inefficiencies as their teams are not having the Competencies required to resolve the situations on the ground. Many a times these situations require a combination of Functional and Leadership Capabilities. Normally there is no help available to the teams. Management keeps sending the teams to some General training programs and keep struggling to measure the Training effectiveness!
What is the Solution?
When we look at the Solutions that Companies have to attend to this, not many companies have any solution at all! They keep suffering continuously! Companies keep losing top line and bottom-line opportunities.
Time has come when many companies cannot afford to ignore this any longer. If these inefficiencies are not addressed, now the Companies will start to fail in the market. They may even close down in next few years. Some Companies are recognizing the need to change and starting to address while many more are simply clueless what the problem is.
What needs to be done?
I recommend that Companies start focusing on the Competencies of its’ Team and recognize the importance of Processes in their Companies. They need to develop a methodology for People Development that becomes a continuous process in their Company.
I am not talking about a one-time training. I am talking about developing a Process in the company that will help you maintain the Competencies of your team and keep improving it as the Business situation demands.
Developing people cannot be done on a standalone basis.
Following is the Process that I recommend:
01. Define the Competencies required: As a onetime activity it is required to work out the Competencies that are required for your Team. Be ruthless in linking these Competencies to your Business needs. If you say your Team requires ‘Planning’ Capability you should be able to define a ‘Business Context envelope’ around this Competency. What problem will it solve if your Production Manager learns about ‘Planning’? What improvement in Business Result can you see by teaching him about ‘Planning’? You need to define the Functional and Leadership Competencies required.
02. Select the Annual Agenda: When you work out the Competencies required you may work out a longer list of Competencies. Any team can develop in 2-3 Competencies in a year. Nothing more. Do not attempt to make your Team competent in just about every Competency in one year. It won’t happen. Go step by step. Select the Annual agenda in line with the Business Agenda.
A Company that is trying to improve Sales will have to focus on developing the Competencies of teams towards this. If New Product Development is inefficient, then prioritize the Competencies related to this area in every Function. Let the focus be clear.
If you train the Team in these Competencies, you should be able to see improvement in Business Results.
At the end of the year, you should be able to improve the New Product Development Process in your Company and get the Products out in shorter lead time and with better Quality. Your Customers should be able to feel the difference.
By keeping it close to your Business Agenda, you just eliminate the problem of measuring ‘Training effectiveness’. It is a silly discussion. Why do we train our Teams in such a way that we can’t measure the effectiveness of Training?
03. Define Micro Skills: Do not end with defining Competencies alone. Define Micro Skills that your Team needs to deliver better Results.
Eg. In the above example of improving New Product Development process in your company, the Team needs to learn about ‘Quality Function Deployment’. Team needs to learn about ‘Collecting Voice of Customer’ or ‘Working out a Validation plan’ that can capture most of the problems. These are Micro Skills that will give you better Business Results!
04. Appoint a Business Coach: It would be very helpful if you can get a Business Coach for your Team. This Business Coach should be someone who worked in the industry and who can talk your Business language. Engaging just Trainers who do not have deep Business perspective simply will not help.
This Business Coach should be able to understand the Business side and Leadership Side of developing your Team.
You should engage this Coach for longer periods to get best Benefits.
05. Methodology of Training: You need to have a strong methodology for the Training. One needs to recognize the fact that teaching the Concepts is only very small part of Training and Development of your Team.
a) Defining Micro Skills as explained above.
b) Prepare the Team by giving them feedback about the current status on these Micro Skills. Create a ‘need to learn’.
c) Develop E-Learning Modules for the Micro Skills. These will remain with you for training / Re-training of your team.
The E-Learning modules will address the Concepts as well as Practical application stories in the company.
Eg. While addressing the Micro Skill of ‘Taking Voice of Customer’ from the Customers in the market, you may address the different types of Customers that your Company has and Problems in taking VOC from them. Here, already there will be experience in the Company about types of problems. The E-Learning module will capture these examples and advice about how to handle it.
d) Apply the Micro learning on a weekly basis. Encourage the team to learn for 2 hours every week. You can declare Weekly Learning hours in each Function when the team would learn the E-Learning modules.
e) Define the Certification Criteria for each Micro Skill and implement it. Eg. For the New Product Development skills discussed above, the Certification criteria may be as follows:
i) Learning the Concepts – Level 1 Certification.
ii) Level 1 and doing the activity under guidance (Eg. Actually, collecting the VOC) – Level 2 certification.
iii) Level 2 + Improving the VOC for a specific Project – Level 3 Certification.
This way you would certify the Team members on the basis of actual results.
Implement the Certification Criteria. The Business Coach should certify so that the focus Is clearly on meeting the criteria.
f) Continuous feedback: The feedback to the team can be given from at least two sources. 360 Degree Feedback from a group of people with whom the Team member interacts regularly. Feedback can also come from the Micro Results that are expected. Eg. When the Team member learns about ‘Time and Motion study’, we can see if he is able to do a study on his own without guidance.
g) Business Reviews: The Business Coach should accompany the Company’s Leaders in the Business Reviews. He will be the observer who would look at the application of the Micro Skills for improvement in the Business results. The Supervisors of the Team can interact with the Business Coach to give him feedback about the Business Coaching. This will ensure the Business Coach is in the right direction.
h) Link to results: The whole process should be measured with Business Results in a close manner. It will keep improving the process itself. The results expected should be defined at a Micro Level. Results can be Process results and Business results.
This way the Business Coach can help you establish a methodology for People development in your Company and bring the focus on to Competencies of the Team.
How focused are you on the Competencies of your Team?
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 my interactions with about 100+ Companies as part of my Consultancy and Job experience, I have seen many problems related to Lack of Knowledge on the part of Employees in companies. Every company struggles with this problem. Some have identified that this is the problem. Some struggle the consequences without understanding the Root cause. Let us examine a few of them.
Customer facing teams not having the knowledge of Product and Company: Today, we are all losing the people in Sales, Service and Marketing teams quite often. New people keep coming in almost every month! But, my observation is that Companies do not have any tool for teaching these new people or some companies have very ineffective tools. Very few companies (may be 2%) have good systems for teaching them in a systematic manner. Result is that we have loose Cannons going to Customers and promising the sky, moon and the Galaxy whereas the company is here on earth! This is perhaps the most dangerous of all the problems related to knowledge.
R&D Teams working with low / no knowledge of product: The R&D teams also are losing many people every month in most of the companies. Again when the new people come, companies do not teach them about their product or they say they don’t have time to teach them !! Result is that the R&D Engineers are designing the products / parts without understanding the Big picture. This creates more iterations at the best and companies lose big opportunities for optimization of their new products at the worst.
Operators on the Shop floor manufacturing the product without knowing the process: I am sure all of you are suffering with the problem of losing Operators on the Shop floor every month in a big number. Still, very few companies have good teaching methods for the new operators. Some companies have Training schools. But, use very ineffective processes to teach them about the Manufacturing Processes. Result is that the Company loses a lot of People Productivity as new people do not produce at standard rate for quite some time. The Company also loses in a big way in Quality. I have seen many companies who are living with this problem for years without addressing it !! They not only lose money, they lose customer confidence and they lose Top Line !
Manufacturing Team not exposed to Lean: Most of the Indian Companies have Manufacturing Teams who are not conversant with Lean Principles. This problem is there at senior levels as well as junior levels. This results in companies working in a very inefficient way. They use resources at least 2X than what is required. Many companies feel very happy if they can meet 100% of the Customer Schedule. They are not focusing on working efficiently and saving some big money.
The same type of problems are there in Procurement where the teams do not have knowledge of Best Procurement practices, Engineering teams not conversant with Value Engineering principles, HR Teams not knowing about better Training practices, Stores teams not having knowledge of Kanban, Inventory Management.. the list can be long.
Indian Companies are working with lot of inefficiency! We can improve our Bottom line and Top line in a big way if only we can address this problem of Employee Knowledge in respective areas.
Today we have Technology Solutions
Today there is enough technology available for companies to leverage and develop Learning Solutions for the employees.
E-Learning: Using E-Learning, the Knowledge required can be taught to the employees in a systematic and uniform manner. The advantages of this technology are as follows:
a) Make the learning interesting.
b) Make it uniform for all employees.
c) Test the knowledge and certify the employees.
d) Repeat all this at no extra cost throughout the year and beyond.
Virtual Reality: Using 3D and VR, one can teach about Product and Technology. The 3D Videos can help you to give a unique experience to the employees to look at the Products In a Virtual manner, look at them from all angles and understand the small details very well. This technology can be applied using the VR Goggles. This technology can be used in Product technology and it can also be used to convey an Induction program that will take a remote employee right in to the Factory using 360 Degree Video. There can be many more applications to this technology. Augmented Reality is another related technology that is available in this area.
Gaming:Gaming has multiple approaches in Companies. Especially in Manufacturing. Using this, the knowledge can be conveyed in an innovative manner. Gaming can also be used to expose the Employees to different Business Problems in a fun or serious manner. Serious Gaming can be quite useful to companies to enhance Learning.
How can you apply these Technologies?
Develop Solutions: A Company needs to get the Learning Solutions developed as a one-time affair. This is going to take some time for companies to do it. All the Knowledge that is needed for a company may not be available in a documented manner. The Knowledge has to be documented and it has to be used along with the Technology to develop innovative solutions.
Proficiency Levels: The Proficiency levels have to be defined in a Company for Employees at various levels in each type of Knowledge. Product knowledge is needed for an R&D Engineer at the highest level. But, for a HR Executive this may be required at a much lower level.
Learning Management: The Courses to convey the knowledge have to be made available to the employees for learning and certification. This data base has to be maintained using a Learning Management System.
Learning Centers: Learning Centers can be developed with a combination of Physical work benches and E-Learning Videos that help the employees to learn the process theoretically and then apply it on the work bench. One can aim at bringing the new employees to the required Productivity and Quality in the Learning Centers before allowing them to the Shop floors.
Organizational push: While all this can be done, the Employees also have to take responsibility to learn. To ensure this, the Companies can think of making Learning and Certification of employees a mandatory affair. Unless the Employees are Certified, they may not be eligible for participating in the Annual Performance evaluation. This will ensure there is a Pull from Employees for the Learning and Certification.
A Company can revolutionize learning and get tangible results with this approach. I believe Companies should take help from outside to do this. I personally would prefer People with good application knowledge than those who are expert IT People. In this area what is required is the innovative application ability.
Are you ready to take your Learning to a new level ?
What is Critical: To understand the Technology and applying it in a Model area is important to realize the power of this approach.