Shifting the focus from Product Quality to Process Quality

In most of the small and emerging organization, we are observing that people spend enormous time, energy, effort in ensuring product quality through inspecting(in some cases 100 % inspection!) the final component both on functional and aesthetic aspects, segregation, rework and documentation.This kind of focus on a product only leads to “somehow” pushing the product to the customer with high manpower cost and long lead time. Moreover, this will set the belief in the organization that defects are unavoidable and the role of quality function to detect, correct and send it to the customer. Ownership also shifts from production to quality function on both delivery and quality. Eventually, the organization does not improve its problem-solving capabilities and culture of problem-solving at the source.

Instead, the organization can shift the focus more on the process quality than product quality. This shift can be demonstrated by ensuring the product quality at the source of production like pre-inspection of material before the process, providing process parameters through standard operating procedures,implementing mistake proofing devices either to prevent or detect the error at source of production, applying statistical process control, making the operator responsible for production and quality.

This focus on process will help the organization to reduce time, effort, energy in reactive product inspection processes, improve the problem-solving competency across the organization and reduce the lead time.

Shifting towards process quality from product quality, to start within the manufacturing process will be the first step towards total quality management in the organization.

Need for organizationwide performance management system

As we discussed earlier "what you measure, will get focus and control." Measuring business, functional and individual through performance metrics will drive the behavior and actions. 

Organization-wide performance management systems mean from top of the organization to the bottom of the organization have a COMMON GOAL, deployed to all levels, with a different set of objectives that will have linkages with COMMON GOAL. 

For example, a business goal of achieving X % net profit is to be deployed from top to bottom levels of the organization and everyone will have the same focus to achieve the goal. But the fact is business metrics cannot be populated down the level as such as it is very difficult for the people to understand.

To engage all levels of people, deployment of business objectives to the down the level with supporting objectives are being done. For example, a business goal is further broken down into the functional level goal, in turn, the functional level goal is further broken down as an individual goal. By achieving the goal at the individual level, the functional goals are achieved. By ensuring functional goal achievement, the business goals are achieved.

Given below 
deployment of one performance metric from the business level to the individual level.

Now let us discuss why does the company require organization-wide performance deployment?

1 Organization-wide common performance deployment promotes performance s oriented culture over a period of time.
2. It differentiates performer and nonperformer.
3. It engages individual and the team, and it is a natural team-building process
4. The team understands each other's challenges and helps each other for a common goal.
4. It helps to improve individual / functional efficiency as constraints are exposed.
5. eventually, the organization migrates from functional orientation to organizational goal achievement orientation, and this drives the solutions-oriented mindset among the team.

Driving organization towards solutions-oriented culture is a paramount priority of business head, and organizational-wide performance deployment will help to achieve the mission !!

Need for organisation structure role clarity in growing organization

When the organization is small, it does not require any formal organization structure, role clarity as most of the transaction would be done by the promoter cum business head with this known people through RELATIONSHIP. But when the organization grows regarding sales turnover, customer's addition, new product lines or variety increasing, the business also becomes complicated. The Organization requires a formal structure with relationship to get the things done without much complication or trouble.

when we say formal structural relationship, it involves 

• The positional designation, 
• Role accountability, 
• Performance metrics to measure accountability and responsibility 
• Reporting relationship 
• Organization-wide formal communication process about the structure 

Need for this structural in a growing organization

1. When the organization grows the relationship, and informal management becomes challenging to manage
2. Increase in communication complexity leads to confusion among the team
3. There is a chance for poor accountability  among the team in case if they are not governed by performance metrics, and there is no reviews and reporting method
4. When we have a structured  organizational relationship with performance metrics and the review forums helps to build performance culture .
5. It is a known fact that what we measure with accountability will bring focus and control.

Let us discuss organization structure designing

Most of the time we see a trend when we are asking for organization structure people are showing some visual positioning of man people and saying on a structure is already there. It is not just who is reporting to whom or who are all going to report to porting to one person.

In my opinion, visualized organization structure is a final step in the designing organization structure. Before that, a lot of strategic and tactical thought process has to go into the designing the organization structure.

As we discussed in manpower planning whenever there is an increase in the volume of product lines or customer base or whenever you are going for expansion, then it calls for revisiting the organization structure roles and responsibility.

For example, if there is a  position as General Manager  with business development as his accountability, then we need to articulate his  positional accountability with one or two performance metrics 

It could be a sales turnover increase our new customer development and so on one.

Most of the time we are mixing up accountability and responsibility . Accountability is result and responsibility is related to the process.

For example, the person is accountable for increasing the sales turnover is responsible for maintaining a relationship with the customer once in a week or sending the queries or finalizing the quote and so on are responsibilities to achieve the sales turnover. This responsibility becomes the person's daily/weekly management activities. Also, we need to be clear on the reporting relationship for each position, in turn, the person occupying the position.

The above inputs of all positions will be the inputs for designing the visual organization structure. The business head plays a major role in defining the organization structure with strategic and tactic perspective.

Importance of Manpower Planning during Growth phase

Like any other planning is being done in functions like marketing, sales, finance, and material, equal importance has to be given on MANPOWER PLANNING  particularly during the growth phase. Else, it would affect the organization growth badly. Having Right people in Right place at Right Time is critical for accelerating the growth.

The execution calls for detailed planning of manpower on the following aspects.

1. No of people required
2. Level of people required regarding skill and positions 
3. Compensation and Budgeting 
4. Recruitment methodology either dependence on the internal source or external support
5. Org structure, the communication process 
6. Infrastructure and facilities for increased manpower 


The typical problem with manpower  in small and medium-sized organizations are

1. Non-availability of right people 
2. Mismatch of manpower requirement vs. availability
3. High attrition rate 
4. Engagement of people towards organizational objectives

Typical mistakes the business head is doing in manpower planning during the GROWTH  stage 

1. Lack of forwarding thinking on manpower planning process:

it means the lack of thought process on the quantitive projection of manpower requirement, qualification, skill level, and how they would be positioned in the existing organizational structure and engagement plan.

2. Adhoc recruitment 

It means either compromising on the talent or fitting the people to the position rather than need. sometimes organizations recruit the people based on some reference either from relatives or friends or association, and they may not be fit into job requirements

3. Non-checking on the cultural fit :

Not verifying during selection  about the candidate's suitability to the organizational culture and values


. So when we are not planning the manpower properly in advance, the organization will lead to chaos or cost overrun on manpower budgeting. 

When Manpower planning has to be done for the organization?

Manpower planning is immensely required during the following scenario

1. Plant expansion
2. Drastic Increase in volume and variety 
3. New product  / new business lines getting added 

Benefits of manpower planning 

to plan budget/manpower cost in each category
to determine the job description/type of talent, you look for
to recruitment timely and induct
to focus more on external priorities than managing internal manpower problems.

So the point is manpower planning is one of the essential tactical activities of the organization, and  it is a continuous activity to ensure operational effectiveness and growth.

Importance of daily routine management towards sustainable performance

One of the common phrases we use to hear in most of the discussion in the organization is daily routine management.

Let us understand the meaning of the term and its significance on sustainable performance in the organization, especially in small, emerging organization.

Some of the myths of daily routine management:

"It is all about roles and responsibility as described in the job description."

Even though daily routine management is a responsibility of all individual in the organization, it goes beyond as mentioned in the job description. From my experience with small, emerging organization, the job description is written with the mix of activities and accountability.

However , Daily routine management is nothing but how you are consistently managing your daily routines so that you ensure your organizational performance is on track against the target. 

The context is if you are not active on a daily basis, you cannot be successful in your weekly results. If you are not effective in your weekly commitments, you cannot be successful in your monthly results and so on quarterly, half-yearly and annually.

"It is required only for shopfloor people and not for management level"

Daily routine management is a management practice, and it is required for all the levels.

For instance, if you are a shop floor manager, you suppose to do some of the activities on a daily basis irrespective of your other priorities. For example, the activities like reviewing your previous day production against the target, quality issues, customer complaints, communicating with other functions through MIS or meeting forums at a fixed time are the daily routines.

If you miss it for one day or do it in ad-hoc frequency, you may have the consequences regarding losing targets. For example, if you do not review your production status on a daily basis and ensure you are matching with asking and running rate, you may have relatively less response time to catch up or to take timely counteractions.

If you do not monitor the progress on a daily basis, you don't know the reality and cannot take timely corrective action.

In fact, daily routine management is based on the P-D-C-A cycle.

Similarly as a business head, if your daily routine activities are maintaining relationship with customers and employees, reviewing the financial aspects, reviewing the strategy implementation aspects and so on and if you are consistently doing those activities on a fixed, short intervals, you may face the consequence on the performance failure in any of those critical areas.

Benefits of daily routine management across all levels

1.Improves certainty and communication among team members

2. More response time available to take corrective action in case performance slips

3. It drives organization towards performance-based culture and engagement

4. More importantly, it improves personal efficiency and effectiveness

As any habit formation, initially it would be challenging to follow disciplined, structured daily routine management, but once it is formed, the organization is capable of handling any changes from external as well as internal environment.

In my opinion, more than management processes, daily routine management is culture building towards performance!

How to select the right candidate for your organization?

One of the challenges for most of the small, emerging organization is selecting the right candidate for the job and retaining in the organization. There could be many factors contributing to retaining the people, and we discuss in another forum. However, one of the typical scenario we are witnessing in most of the organization is that within a short time, say 1-3 months time, the business head and the incumbent conclude either person is not fit for the job, or the organization is not fit for the new incumbent. This scenario is more common in senior level recruitment.

A strange fact is that the business head had personally involved in shortlisting, interviewed the candidate and inducted for employment. If either one of them concludes " this is not fit for me," we can arrive a logical conclusion that " selection process needs to be improved".

Typical mistakes the business head do during the selection process?

1. On an ad-hoc basis, decide the requirement for manpower 
2. No job description or role clarity/ responsibility/accountability defined before shortlisting the candidate even though there is macro level articulation on the need.
3. Conducting the interview process  with the intent of understanding more about the  candidate's previous experience and not on verifying or calibrating his caliber is matching with the organization's prevailing business practices or the culture
4. No structured questioning to check the attitude/perspective of the candidate to solve the existing organizational challenges or issues
5. Sometimes, selecting the candidate based on the reference from a known circle or filling the position with " somewhat" fit candidates.

Impact of the poor selection process:

1. Attrition rate becomes high, and it affects the stability of the organization.

2. Business head spends his time in routine work which affects his productivity and other aspects of profitability and growth
3. Cost of recruitment keeps increasing with no return benefits.

4. The organization which has grown with old, loyal employees, the high attrition rate signals different communication among employee. Eventually lead to complacent mentality, arrogance, know it all attitude which affects speed and flexibility towards change 

5. Sustaining organization development and gearing up for next level growth with a professional mix of people will become a major challenge for the organization.

Solutions approach to improving the selection process:

As a business head, before filling and selecting the candidate, you need to be clear on the job description as follows

• Position description
• Age, Experience, and qualification
• what level of competency(Job Knowledge and Skills) you are looking for 
• what is your organizational culture and how would you like to check during the interview
• your affordable pay and structure
• Likely growth path to the incumbent and likely changes in the existing organization structure

Once you are clear on your expectation, circulate the job description to professional recruiters and get the potential candidates.

Scan through the potential people and shortlist a  few who fit into the above requirements.

During Interviewing the candidate:

Look for the attitude which is required for the position or title. Attitude can be tested by asking the following question and look at the response from the candidate.

1. Experience in handling people dynamics and his style of managing the challenges 

2. State some of your organizational scenario or challenges and ask how he would respond in those scenarios.

The quick or momentary response, to some extent, will reflect the person's natural attitude towards work and people as this help you to gauge the suitability of the person to your organization.

Also, You need to note that you are recruiting senior level people to bring a change and sustain the business growth. Hence be balance in your approach to select the person with a track record of change management and fit into your culture.

Since we are dealing with human dynamics, it is challenging to gauge people's capability and attitude in the interview time. However, having a systematic process and improving your interviewing skill will improve the probability of choosing a right people for the organization as it helps both you and the others!

Relevance of Target setting & Review forums on accelerating business performance

One of the management process to control the business performance is to set the business target and review those targets.

when the organization grows from small to large, complexity also gets grow faster than business growth thanks to more customers, more products, more people and so on. Communication also gets complicated among all the stakeholders.
To overcome the complexity and bring accountability, setting the target and review those targets becomes important.

The targets could be Business targets, Functional Targets, and Individual Targets. The targets can be termed as Key Performance Indicators (KPI's)

Depending on the size of the organization and bandwidth to administer the performance management system, the business head can set the target in the following hierarcy

1. Business Key performance indicators 
2. Functional Key performance indicators
3. People Key performance indicators

From our experience, it would be a right approach, to begin with, Business Key performance indicators covering all functional deliverables in terms of the following categories

• Productivity
• Quality
• Cost 
• Delivery
• People engagement

The business head can set the annual target on the above categories as it covers all functions.

for example, "Manufacturing cost per component" is one of the key performance indicators under the category of "Cost".To achieve this KPI target, all functions have to contribute, by the way, business level KPI target setting covers all functions.

Once the organiztion becomes familiar with target setting at a business level and acquires competency, it can go to the next level of target setting at a functional level and individual level.

The business level KPI's can be set for annual basis which can be tracked every month , every week and every day.

Benefits of Setting Business Targets (KPI's)

1. Business heads and the team get clarity what they want to achieve on business profitability and growth
2. Targets set the direction to the team
3. Brings the people together
4. Improves the focus of the team
5. Improves the communication among team

Review forums :

once the business KPI's are in place, it is the responsibility of the business head to create a review forums to review/discuss the target status along with cross-functional team members and take a counteraction if it is required.

The review forum is nothing but a meeting of a relevant cross-functional team with fixed agenda.

The review forum could be monthly KPI review meeting, weekly reviews or daily performance review.

Benefits of Review forums:

1. Review forum is excellent process to review the target status and take counteractions
2. when the review happens along with cross-functional team members, it brings accountability to all
3. Review forums brings the problem to surface and can be solved along with the team quickly rather than individual review
4. Since each cross functional team member involving and contributing to different KPI's in different roles either as lead or team member, the review forum helps the team to know each other's problem . It helps to bring the bond among the members
5.Review forums if conducted properly with a real problem-solving approach, it enhances the personal productivity of each individual.

When the targets are clear and the teams are facilitated for achieving the targets through review forums, eventually organization sets for performance management culture and it would accelerate the business performance!