tag:blogger.com,1999:blog-60705661714464166772024-03-13T17:40:45.629+05:30Business Transformation Insights in Small and Emerging OrganisationSharing Insights, Concept, Tools, and Techniques about Business Transformation in Small and Emerging Business....Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.comBlogger102125tag:blogger.com,1999:blog-6070566171446416677.post-30018251605858772192021-06-26T15:22:00.001+05:302021-06-26T15:22:07.210+05:30Understand the terms: Digitization , Digitalization, Digital Transformation<p>The next industrial revolution is going to be on <b><span style="color: #2b00fe;">Digital </span></b></p><p>Let us understand the difference between <span style="color: red;">Digitization</span>, <span style="color: #2b00fe;">Digitalization</span>, and <span style="color: #ff00fe;">Digital Transformation</span> and we can relate with our organization.</p><p>Those terminologies are sometimes are used interchangeably, but there is a clear difference in each of the terminology.</p><p><b style="color: #2b00fe;"><u>Digitization :</u></b></p><p>Digitization means any effort towards converting <span style="color: #2b00fe;">analog information into a digital format </span>so that computers can store, process, and transmit to anybody when it is required.</p><p>This is just converting physical format to digital format</p><p><span style="color: red;">For example, </span></p><p>scanning of daily logbook information to digital format and sharing </p><p>scanning of invoice to digital format and sharing </p><p>taking photographs of a daily plan to digital and sharing </p><p><br /></p><p><span style="color: #2b00fe;"><b>Digitalization </b></span>:</p><p>Digitalization means <span style="color: #2b00fe;">adopting digital technologies</span> for increasing personal and business benefits.</p><p>This effort is for more than storing, processing, and transmitting the data..</p><p><span style="color: red;">For example,</span></p><p> when you collect your machine utilization, performance, quality data through OEE embedded software or SCADA system, then it is digitization.</p><p>The benefits could be the elimination of paperwork, dependence on manpower to collect and record the data manually(then transferring the same data to excel), and improving the accuracy of the data collection process.</p><p>Similarly, other examples could be using barcode and scanning technology, reducing the manual effort of entry in invoice preparation and inventory recordings etc.</p><p>also, the example of employee entry and exit data, through digital scanning and software system. It brings the benefit of reducing administrative efforts of maintaining the records manually and using it for payment processing.</p><p><b><span style="color: #2b00fe;"><u>Digital Transformation:</u></span></b></p><p>Digital transformation is more than digitalization effort in the sense that this effort is a <u>completely new way of doing process or business transaction and it is driven companywide at all levels and thereby getting higher benefits like new business opportunities, drastic reduction in the cost, or increase in employee, customer experience level. <span style="color: #2b00fe;">Adoption of digital technologies will be on a larger scale </span>and the effort of change and benefits would be on a higher scale.</u></p><p>Sometimes, this digital transformation disrupts the current business model and new opportunities emerge. For example, the transformation of the stock market from floor auctioning to digital is an example of digital transformation.</p><p>In my opinion, the small, emerging organization has to go a long way in the digital transformation step as most of us are in either digitization or in digitalization drive only.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-_W6CyD1Tw3s/YNb3B-DoHMI/AAAAAAAAB8s/WY4LR3Lozz0rXe3ZLHWvw3RQcPb0oHT0wCLcBGAsYHQ/s1654/Picture1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="959" data-original-width="1654" height="373" src="https://1.bp.blogspot.com/-_W6CyD1Tw3s/YNb3B-DoHMI/AAAAAAAAB8s/WY4LR3Lozz0rXe3ZLHWvw3RQcPb0oHT0wCLcBGAsYHQ/w640-h373/Picture1.jpg" width="640" /></a></div><br /><p><br /></p><p><i>Just think about where your organizational efforts are in digital!</i></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p>Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com1tag:blogger.com,1999:blog-6070566171446416677.post-39356751853817525612020-08-11T11:35:00.002+05:302020-08-11T11:36:31.633+05:30Leveraging Low cost automation for Cost Effectiveness<div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">Even though the challenges for both large and small organizations are broadly same like increase in labor cost, non-availability of people, pressure on pricing, increase in expectation on quality standards and service, the large organizations are adopting automation of processes to some extent to mitigate the challenges, the small organizations are struggling to get most out of the automation.</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">While some of the SME business heads are getting exposed to innovative automotive trends like robotics, machine learning, artificial intelligence, and industrial 4.0; either they become scared of those developments, or some people are feeling guilty of not being updated in the organization and trying to look for automation.</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">In my view, those innovative trends are catching up and need to be evaluated on the investment and adaptability to small size organizations. Even large size organizations are in the investigation and preliminary implementation stages in the organization except a few, who leveraged the benefits mostly on the robotics application. We need to learn and watch the trend, and as far as small size organization is concerned, a lot of opportunities are yet to be explored in low-cost automation itself.</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">In this article, i have tried out to give an overview of leveraging low-cost automation possibilities in small, emerging organizations for cost-effectiveness.</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><b>Level of Automation in SME organization</b></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><font color="#1a1a1a" face=""><span style="background-color: white; font-family: verdana;">I can classify the automation implementation in SME's in 2 phases viz</span></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font color="#1a1a1a" face=""><span style="background-color: white; font-family: verdana;"><br /></span></font></div><div style="text-align: left;" trbidi="on"><ul style="text-align: left;"><li><span style="background-color: white; color: #1a1a1a;"><span style="font-family: verdana;">Basic Automation Implementation</span></span></li><li><span style="background-color: white; color: #1a1a1a;"><span style="font-family: verdana;">Advanced Automation Implementation</span></span></li></ul></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">Basic Automation can be defined as the creation and application of technology, which makes equipment, process or a system operate automatically with or partial involvement of people.</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">Advanced Automation systems represent a level of capability and performance that surpass in many ways the abilities of humans to accomplish the activities. </font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">Most of the SME's are in the stage of leveraging basic automation only and i dwell more on the basic automation and its application areas, challenges, and solution approach in implementing organization-wide basic automation system.<br /><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><b><font face="verdana">Why business head is reluctant to automation so far?</font></b></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">There are many factors that contribute to low-level interest in automation and in my personal experience, the following are the reasons</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">1. Lack of shifting the focus on people dependence on automation:</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">Most of the SME's are still comfortable and dependant on manpower even though the realization started on the need for automation wherever the repetition of the process, need of skill requirement. The business heads are feeling more comfortable and convenient to hire and deploy people than looking for automation solutions and upgrading to unknown subjects.</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana"><br /></font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><span style="background-color: white; color: #1a1a1a;"><font face="verdana">2. Investment:</font></span></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">some organizations are reluctant to the investment and comfortable with the recurring expenses.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">3. Lack of supporting system:</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">Even though the organization is ready to move from manual to automation and for the investment, they are not getting the required support in terms of reliable sources for automation, after service and support, internal people training, irregularity on the power source, inconsistency in the parts.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">Now things are changing in all the above factors thanks to compelling pressure on the competitive pricing and the change in the ecosystem for automation. But we need to go a long way in bringing in awareness and creating an environment for thinking towards automation and successful implementation.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">some organizations in SME have consistently focus and investing in automation, and hopefully, this will continue, and there will be a widespread focus on automation.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><b><u>
Opportunity areas for automation in small, emerging organizations</u></b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><b><u><br /></u></b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><b>Conditions under which we should consider automation?</b><br /><br /><ol><li><font face="verdana">Massive material movement by manually or semi-automatic which leads to accidents, fatigue or delay or low efficiency</font></li><li><font face="verdana">Too much dependant of human intervention in ensuring process parameters which leads to quality problems like defects and defectives, rework</font></li><li>The repetitive and standard process where fatigue seems to exist</li></ol><br />Primarily, when there is a need for<br /><br /><i><span style="color: #2b00fe;">1. Accident prevention and ensuring safety<br />2. Improving manpower efficiency<br />3. Ensuring process and product quality</span></i><br />
<br /><b><u>Typical application areas for automation</u></b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br />
1. Movement of materials through material handling systems ( trolleys, hand pallets, stackers, conveyors, cranes, etc<br />
2. Reducing the dependence on manual intervention in a repetitive process like 100 % inspection or sampling inspection, where it is unavoidable to bring it under process quality through test rigs and scanners etc</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">3. Reducing the dependency on manual intervention where process consistency is important like molten metal pouring, chemical, powder mixing and in some cases automating loading and unloading the components in the machine</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">4.Avoidance of human intervention in mere data collections like attendance, machine utilization data, people efficiency details through software, data capturing devices </font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br />
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<b>Should we give strategic importance to automation initiatives or let it be operational initiatives?</b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><b><font face="verdana"><br /></font></b></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">In order to bring holistic achievement in the automation, the business head should give strategic importance to the automation initiatives. I mean, the business head should look at the business processes and manufacturing process in a holistic way for optimizing the resources through the automation route. </font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">Instead of trying automation in a localized, opportunities areas, if the business head looks at the overall opportunities in the system, identifying potential areas, forming core groups, evaluate the cost-benefit analysis, partnering with right solutions providers, involve all the stakeholders and implement as an important initiative, the benefit would be huge compared to the standalone, ad-hoc way of initiating some automation in the system.<br />
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<b>How to identify opportunities for automation projects?</b><br />
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Automation opportunities can be identified at the overall business process level and within the process, in each elemental level, automation can be identified.<br />
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This can be done using process mapping techniques and micro elemental analysis.<br />
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<b>Process Mapping Techniques:</b><br />
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for example, you consider one commodity or RM, and you can map the process from the moment it enters the security gate for GRN entry to final FG dispatch as shown in typical process mapping.<br /></font><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-wV5l9jMMZkU/Xw7f8eozOgI/AAAAAAAABts/5wts82yjmCIa-YW_VViwJPSulL2FBOeEwCLcBGAsYHQ/s1600/Material%2Bflow%2Bacross%2Borganizational%2Blevel.png" style="margin-left: 1em; margin-right: 1em;"><font face="verdana"><img border="0" data-original-height="816" data-original-width="1600" height="324" src="https://1.bp.blogspot.com/-wV5l9jMMZkU/Xw7f8eozOgI/AAAAAAAABts/5wts82yjmCIa-YW_VViwJPSulL2FBOeEwCLcBGAsYHQ/s640/Material%2Bflow%2Bacross%2Borganizational%2Blevel.png" width="640" /></font></a></div>
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In each business process, the team should ask the following questions.<br />
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1. Is there a possibility for automation to improve the safety, efficiency, and accuracy of the process?<br />
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the team should look at each process only from the lens of AUTOMATION to get the benefit of quality, efficiency, and improving safety aspects. Most of the time, we are using a different lens like waste elimination, variation reduction, people interface etc, sometimes we overlook the possibilities of automation. of course all the waste elimination and reduction methodology may ultimately lead to automation, but when we go through the process only from the automation benefits like efficiency improvement, safety practices improvement, and quality improvements, there is a high probability to find automation projects.<br />
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After identifying the potential projects, the team can do the techno, commercial benefits evaluations to select the highest potential automation projects.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><b>Micro Elemental Analysis for identifying the Automation opportunities:</b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">Another approach is using micro elemental analysis in which the engineer list down the operations into elements and each element is being questioned for the improvement through low-cost automation possibilities.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">For example, in one of my client operations, they engage in press shop operations and when the process engineer lists down the elements like Picking the comp, loading, pressing, ejecting and unloading the component, they identified opportunities to eliminate ejecting and unloading by providing low-cost automation which takes cares of ejecting and unloading into the container automatically once the pressing operation is over.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">The point is for the small organization, we need both approaches to identify the potential opportunities for automation.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br />
<b>Levels of Automation :</b><br />
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1. Fixtures / simple low cost mechanical/ Hydraulic / Pneumatic setups<br />
2. Material Handling facilities<br />
3. Low-cost Special Purpose machines<br />
4. Standalone High-cost automation<br />
5. Integrating multiple machines and human interfaces</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-fvDw1joLHow/XzIzW7vVpiI/AAAAAAAABvc/ehhx7uXX9lYXsCZ1CarS50f4DZj5B5qlwCLcBGAsYHQ/s1782/Levels%2Bof%2Bautomations.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: verdana;"><img border="0" data-original-height="1033" data-original-width="1782" src="https://1.bp.blogspot.com/-fvDw1joLHow/XzIzW7vVpiI/AAAAAAAABvc/ehhx7uXX9lYXsCZ1CarS50f4DZj5B5qlwCLcBGAsYHQ/s640/Levels%2Bof%2Bautomations.png" width="640" /></span></a></div><font face="verdana"><br />
<br /><b>A typical checklist for successful automation projects</b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><b><br /></b></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">In most of the SME organizations, one common pattern i am seeing is that the organization is not getting the benefit of the automation even though the concept or the intention behind the automation projects was clearly thought-out and articulated.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">The success will be materialized only when the team ensures some of the factors right from conceptualization to operationalizing the automation in line with customer's demand or flexibility.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br /></font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana">The following factors need to be considered in the planning and execution stage to get the full benefit of the automation.</font></div><div dir="ltr" style="text-align: left;" trbidi="on"><font face="verdana"><br />
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Clarity on the objective of automation, whether the automation is meant for efficiency or safety or quality or the combination of all.</font></li><li><font face="verdana">Conceptual idea or drawing about the automation before discussing with the external service provider</font></li><li><font face="verdana">
Desirable cycle time and matching with existing and future takt time requirements</font></li><li><font face="verdana">
Selection of reliable source who is having integration experience in electro, mechanical and digital space</font></li><li><font face="verdana">
Ergonomics consideration</font></li><li><font face="verdana">
Availability of spares requirement</font></li><li><font face="verdana">
Basic maintenance guidelines and adherence</font></li><li><font face="verdana">
Meeting return on investment as per organizational guidelines</font></li></ul><div><br /></div><div><i>Like any other initiative, when the automation initiatives are conceptualized holistically and executed correctly by involving all the stakeholders, any automation will give more significant benefits to the organization.</i></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-39632677488893634102020-04-12T15:52:00.000+05:302020-04-15T09:33:41.380+05:30Managing the uncertainties in small,emerging organization<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "verdana" , sans-serif;"><span style="color: red;"><b>Coping with COVID 19 aftermath effect in small, emerging Organizations?</b></span></span></div>
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<span style="font-family: "verdana" , sans-serif;"><b>General
Note :</b></span></div>
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<span style="font-weight: normal;"><span style="color: blue; font-family: "verdana" , sans-serif;"><i>This article is mainly for the Business Heads or CEO of the small, emerging
organization with manufacturing facilities on dealing with the uncertainty due to
COVID 19 lockdown and aftermath effect.</i></span></span></h4>
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<span style="font-weight: normal;"><span style="color: blue;"><span style="font-family: "verdana" , sans-serif;"><i><br /></i></span><span style="font-family: "verdana" , sans-serif;"><i>Since each organization is unique in terms of customer segment/demand pattern, operating cycle, working capital requirements, and cash flow cycle, I have given a generic solution approach only, and you can relate with your organization. Accordingly, you need to add/ modify the plan.</i></span></span></span></h4>
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have divided the discussion into three parts</span></div>
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Things to be done during the lockdown </span></div>
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Managing the situations immediately after lockdown </span></div>
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Learning and preparing for future-fit </span></div>
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<span style="font-family: "verdana" , sans-serif;">As
we are going to discuss the short term crisis management plan and future-fit in
the long term with our limited experience in ever crisis, as we have seen in
our generations. There may be changes in the demand, cash flow, business
practices, or even business model, those things, in my opinion, we can tackle relatively easy with collective learning and
collaboration. What is required at this moment for the leader is a
healthy emotional balance to cope with the challenges.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><u>To
enhance your emotional strength, sharing some of the perspectives </u></span></div>
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<br /></div>
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<span style="font-family: "verdana" , sans-serif;">1.
You are destined to be an entrepreneur for a reason. As per one of the latest
survey, only 5% of the 7 billion population belongs to the entrepreneur group. First, you need to feel
proud of it. The purpose of entrepreneurship is more than money, i.e., fulfilling
the society's needs at large or making a meaningful impact on humanity. You are
one of 5 % of the entrepreneur population. When you realize this fact and
feel the privilege that you have got in life, that brings you high self-esteem within
you. That high self-esteem gives tremendous power to solve any challenges.
First, feel good and feel responsible for being part of the solution provider
fraternity.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">2.
Accept the reality that this lockdown or perceived slowdown post lockdown is
not something you created, it happened by nature as a balancing act and you and
I am part of it. Let us accept it. Once you accept, you are moving out of your
denial, blaming Government, comparing other countries and you are in a position
to take the challenge and look forward solution approach.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">3.
Also just reflect your past, even though we have not seen such lockdown and post lockdown scenarios in our lifetime, we have faced
similar situations or helpless situation. </span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"> For example, we have been part of 2008
recession with a lot of uncertainty and other regional uncertainties like flood
situations, demonetization effect, epidemic panic then and there in the last two decades. We faced all
those challenges, and today still, we are standing tall now.</span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"> Even
you can relate some of the uncertainties you faced in your personal life, the
moments you lost your dear ones in uncertain times, an accident happened at
critical times, loss of employment and money, and so on. While those moments
looked like dark, you came over all those challenges, and today you are still
surviving. The point is when we are in the turbulent time, it looks like the
path is dark and seems to be all is over. However, the time is potent
and heels for everything. Those moments shall pass on.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">4.
We are better than those who lost their lives in this pandemic period, and those
are struggling in a remote location, and we must be grateful for that. We need
to have faith in our capability, life, and above all, the invisible force at this
time.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><span style="color: red;"><u><i>The
point is when you accept the reality, take responsibility for you and your people,
your business, being grateful for everything in life and having faith in
yourself and divine power that will give a tremendous positive
mind-shift to tackle the challenges.</i></u></span> </span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">This mindset, courage, positive outlook,
taking responsibility for everything, acceptance to reality is very much
essential than any strategies, brilliance, and any other support from external.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">With
that positive mindset, let us get into managing the challenges in the short term
and long term perspective</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<b><u><span style="font-family: "verdana" , sans-serif;">Short term <span style="mso-spacerun: yes;"> </span>or
during the lockdown period:</span></u></b></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">First
, nobody knows precisely when this lockdown will be over, and normal life resumes
even though different countries and the Government declares a different time frame.
Assuming that this lockdown continuous for another one or two months,
as a business head, what you need to do by maintaining the balance between short term hard reality and the future aspiration and stakeholder's interest.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<u style="color: blue; font-family: verdana, sans-serif; text-indent: -29pt;"><span style="mso-list: Ignore;">1.Taking</span> care of your people:</u></div>
<div style="margin: 0cm 0cm 0.0001pt 11pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><span style="mso-tab-count: 1;"> </span></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">It
is the moral responsibility to take care of the people that are in your organization
<span style="mso-spacerun: yes;"> </span>as at the beginning of the lockdown.
Ideally, you need to pay the salary irrespective of the rules or
instruction from the Government. As I am fully aware of the pain of
cashout situation without any revenue, I look at this gesture as a responsible
citizen. </span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Depending upon the size and mix of people category in your organization,
you can have an open dialogue with the senior team. The people who are at the top of the pyramid shall be paid partial compensation with the understanding that dues will get
paid before the end of the financial year if the business bounces back from the crisis
then. Equally, the team's maturity is also essential in understanding the
business situation. As a balancing act, they need to get what is minimum
required to conduct the standard living at this point. </span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">You can initiate the discussion with the team and share your pain and work out the options depending upon the size of the
organization. In my opinion, the bottom of org structure, say operating people
can be compensated fully as their earning will ensure the standard living and
also, the gesture will bring them emotionally closer to the organization, and
this helps the organization in the long run.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left; text-indent: -18pt;">
<span style="font-family: "verdana" , sans-serif;"> <span style="color: blue;"><u>2.Engaging people:</u></span></span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">As
you are aware that habits die hard, whether it is good or bad. When people
develop the new habit of staying home without many routine tasks, professional
responsibility, and spending time in low
productivity activities, bringing back to normal life, will take extra momentum. </span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Also, the employees need to be made understanding that this
lockdown is a lifetime opportunity to reflect, learn some new competencies which
will help them personally and professionally in the long term.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">We
can ask them to enroll in online courses related to their personal and
professional development.I also shared some of the learning resources last week.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Alternatively,
you can engage them by conducting or sharing some technical, behavioral, leadership
development sessions through online thanks to technology. Some apps are offering a free or lowcost subscription for conducting webinars like zoom,
GoToMeeting etc. In this process, your team members who are having an interest in
teaching can take the lead and conduct short duration sessions. </span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Also
you can ask the team members to present their functional knowledge to colleagues. This will help to improve the communication of your team members and improve
cross-functional understanding.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Also,
now you can develop the strategies, roadmap for improving your marketing
visibilities, people development process, cost optimization potential projects
, and similar activities which you have been thinking and postponing due to time
constraints during regular days. You can ask your team to do the analysis and
action plan in their respective areas, and you can review, facilitate in a cool
manner. This way, you are making out your plan ready in your business and
functional areas, and also, the team is engaged well during lockdown times. This planning process will help you once you resume the operation.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">I
have been insisting in my client organizations and some organizations have
initiated marketing planning during the lockdown time</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left; text-indent: -18pt;">
<span style="font-family: "verdana" , sans-serif;"> <span style="color: blue;"><u>3. Take a timeout for self-introspection on
your leadership style :</u></span></span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"> As
a business head, your organization growth depends on your mindset, thought process
and business practices as most of the time, you are the person influenced significant decisions, either good or bad, in the past. Your organization had grown to
this level, predominately because of you. Now, this is the right time to think
about your mindset related to you, your business, customer, process, and people. Now, this is the right time to practice new habits in your daily
management, which will bring a positive culture in your organization.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">I
had recommended some of the resources last week which may be useful to you
during this time to polish your personal leadership style.</span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"> </span><span style="font-family: "verdana" , sans-serif; text-indent: -24px;">In fact, the working of the cashflow the requirement for the next 6 months in the different scenarios can be worked out, and the various options of mobilizing the cash can be figured out during lockdown time. This planning and risk mitigation work will give clarity of managing the reality when the operation resumes.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif; text-indent: -24px;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif; text-indent: -24px;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<b><span style="font-family: "verdana" , sans-serif;"><u>Immediately
After lockdown:</u></span></b></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">When
we resume the operations, the most likely concern area for most of the small
business is in dealing with the following</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left; text-indent: -18pt;">
</div>
<ol style="text-align: left;">
<li><span style="font-family: "verdana" , sans-serif;"><i> Demand Uncertainty</i></span></li>
<li><span style="font-family: "verdana" , sans-serif;"><i> Cash flow uncertainty</i></span></li>
<li><span style="font-family: "verdana" , sans-serif;"><i> Resources availability especially
manpower</i></span></li>
</ol>
<br />
<div style="margin: 0cm 0cm 0.0001pt; text-align: left; text-indent: -18pt;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Let
we understand each uncertainty in detail, and we discuss the
workable solutions approach.</span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">You
need to relate with your organization and accordingly add/modify the
solutions approach, as you may have all the data about your organization.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><u>Demand
Uncertainty:</u></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">The
concern on the demand side is whether the demand would be similar to pre-COVID
period or not?</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Most
likely the demand would not be prior to COVID period unless you are in the
the business of FMCG product manufacturing or in essential items manufacturing
category. However, the order will be picking up gradually, and you need
to think about how you can RAMP UP in line with demand. The timeframe is beyond our
control, but ramping up in line with demand is still in our influence or control
and with little planning, going in detail in all aspects, we certainly
manage it.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="color: red; font-family: "verdana" , sans-serif;"><i>How
to manage the ramp-up in case you are in other than essential products?</i></span></div>
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left; text-indent: -18pt;">
</div>
<ul style="text-align: left;">
<li><span style="font-family: "verdana" , sans-serif;"> First one or two weeks, you need to
consume the existing RM and liquidating the current FG stocks. We need to watch
the demand trend very closely, according to the pattern, we need to order the
supply. Considering the lead time of your supply base, you can order within a
few days of operation. The timing and quantity need to be worked out as
critical action. This decision will vary for each organization as it depends on the
existing stock situation, your customer segment, and the demand pattern.</span></li>
<li><span style="font-family: "verdana" , sans-serif;"> Instead of running all the shifts and
all the machines, try to go for a single shift for a few days or week, then look for shift expansion depending on the demand pattern and people's availability.</span></li>
<li><span style="font-family: "verdana" , sans-serif; text-indent: -18pt;"> Instead of working six days,
consolidate the demand requirements and complete in 4 or 5 days working
pattern. This consolidation will help you to reduce your other manufacturing expenses by
running idle as we accustomed to spread for working all the days.</span></li>
<li><span style="font-family: "verdana" , sans-serif;"> Close coordination is required between the customer, internal planning team, procurement team, accounts team, and the
business head in understanding the trend carefully and making timely decisions. Since everyone is anxious about the demand and urge not to lose the given order, there is a tendency for not going into detailing and planning on material and equipment. </span></li>
<li><span style="font-family: "verdana" , sans-serif;"> However, good
coordination and team working, timely decisions will help the organization to come out of initial ramp-up challenges. As a business head, you need to include all
the people in this process, and you need to anchor them, which seems to be new
for you, and this delegation and minute reviews, facilitation need to be adopted at this point. </span></li>
</ul>
<br />
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<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><u>Cashflow
uncertainty:</u></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">This
is one of the most concern/aspect of the business head in small, emerging
business.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Unless the organization is cash-rich and debt-free or having the discipline of parking 6 months working capital in short term investments,
this period is challenging to manage, however, when you have faith in your
long term health of the organization, you can manage through by taking some bold decision to mitigate the risk, and you need to learn the financial discipline from this crisis.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left; text-indent: -18pt;">
</div>
<ul style="text-align: left;">
<li><span style="font-family: "verdana" , sans-serif; text-indent: -18pt;"> First, we need to get the data of outstanding payables and receivables. Assign your relevant team from accounts, sales, or any other related function depending upon your
organizational structure as a Taskforce team to improve the collection and paying
to the suppliers. (You need to consider your supplier also as they are small and in difficult situations on cashflow than you).</span></li>
<li><span style="font-family: "verdana" , sans-serif;"> Parallelly, we need to work it out
for the next 3 months with ramping up of demand, what would be the
working capital required at the worst-case scenario, and an optimistic case
scenario. This working will give you clarity on whether you can manage with the
internal collection and payment method or should you go for the external debt
assistance for pumping the money. <i>This call needs to be taken at the earliest
, and you need to make a bold decision as this will pay off once the situation improves.
If you are not serving the exiting customer due to your own financial issues, you
will get into the trap of losing the existing customers and at the same time paying
your internal expenses without any returns.</i></span></li>
<li><span style="font-family: "verdana" , sans-serif;"> This is the crucial time to meet your
demand requirements and be on the flow of increasing the demand and getting the
benefits. Any delay or wait and watch mode may put a risk of losing the
existing order, and the future cashflow also gets worsen.</span></li>
<li><span style="font-family: "verdana" , sans-serif; text-indent: -18pt;"> In fact, the working of the cashflow the requirement for the next 6 months in the different scenarios can be worked out, and the
various options of mobilizing the cash can be figured out during lockdown
time. This planning and risk mitigation work will give clarity of managing the
reality when the operation resumes.</span></li>
</ul>
<br />
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><u>Resource
availability, especially operating level manpower:</u></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">As
discussed in the demand flow pattern, you can not expect full attendance from week1
<span style="mso-spacerun: yes;"> </span>and this also to be planned and
monitored <span style="mso-spacerun: yes;"> </span>inline with demand pattern as
part of the up ramping process. Even during the normal period also, sourcing the right manpower was a challenge for small
organization and post-COVID, this challenge will become severe. As most of the
resources are migrant people, bringing the people to the organization by giving
job security, a healthy environment, becomes an additional burden.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">For
some months down the line, we need to ensure social distancing, providing personal protection
and other preventive measures inside the organization, which is new for most of
the small organization. This will be a good measure for the individual and
organizational health perspectives. Unless we give confidence to the working
people on job security and the health preventive measures, ramping up the
attendance would be difficult.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">As
mentioned in demand readiness and ramp-up, a special cross-functional to be formed
to mobilize the people from various agencies and need to be
monitored on personal hygiene and protective measures for some time until
normalcy restored at least.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">During
the first to the third week, managing resources and ensuring availability and meeting
the delivery requirement would be a prime task, and the key team must work closely, and the business head must focus only on this
task.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<i><span style="font-family: "verdana" , sans-serif;">All the above issues are look
like common across all the organizations, the severity will vary between the organization depends on the existing process, customer, and internal realities. When you are
mentally prepared in those critical areas, you can think and develop multiple
options now.</span></i></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><b>Focus areas once normalcy restore:</b></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">The time frame we may not exactly know. However, once you are comfortable with the
ramp-up, the focus must be given on reflecting the learnings and starting a
new paradigm the way you are managing the business.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Key
focus area must be</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
</div>
<ul style="text-align: left;">
<li><span style="font-family: "verdana" , sans-serif;">Being "lean" in all aspects of business</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Bringing financial discipline </span></li>
</ul>
<br />
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><u>Being lean in all aspects of business:</u></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Irrespective
of any crisis, the safest and responsible way to manage the business is <span style="color: red;"><i>"
Working on the principles of CONSERVATISM".</i></span></span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">We
need to look at each business process and to eliminate and reduce the waste as
much as possible. The question we must ask ourselves is whether we are using minimal
resources and maximizing the output.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">In
some of the organization, with growth prospects visibility, we have developed
the complacency in our attitude, and we got into the situation of </span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Excess equipment and investment</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Excess
debts</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Excess
manpower</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Excess
Inventory</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Excess
administrative expenses</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">While large size organizations are prudent on the expenses and conservative on the investments, return on investment, being small, emerging organizations, the way we are looking at the resources utilization needs to be relooked and re-engineered for the sustainability of profitability and growth.</span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;">We
need to relook at our business processes and to re-engineer as going forward, the opportunity will be for those who are open for being smart and flexible to the demand of the external environment. </span></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div style="margin: 0cm 0cm 0.0001pt; text-align: left;">
<br /></div>
<div class="MsoNormal" style="text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><u>Bringing Financial discipline:</u></span></div>
<div class="MsoNormal" style="text-align: left;">
<br /></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Some business head is inherently very disciplined in
financial management. When I speak to them, it seems that they are
comfortable for the next 6 months, even when there are no operations. That should be
the proactive practice, and this must be the focus for each business head irrespective
of the business nature. If we are working only on survival mode, then there is
something problem in our business model or practices or with the segment or customer, we are dealing with. This needs to be seriously relooked and re-engineered.</span></div>
<div class="MsoNormal" style="text-align: left;">
<br /></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">Financial discipline includes</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">1 Bringing a structured process on cashflow management</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">2.Bringing the culture of cost-consciousness in every
activity</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">3.Driving cost projects as a culture</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">4.Debt restructuring and aim for zero debt </span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">5.Reviewing P&L every month and analysis</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="color: red; font-family: "verdana" , sans-serif;"><b>To sum up,</b></span></div>
<div class="MsoNormal" style="text-align: left;">
<br /></div>
<div class="MsoNormal" style="text-align: left;">
<span style="color: blue; font-family: "verdana" , sans-serif;"><i>I have just outlined the likely scenario and the solutions approach
and I am sure as a business head you might have thought about all the scenario
and my perspective might have helped to refine your thinking process a little
bit to manage the short term uncertainty and to become a strong business on a long
term basis.</i></span></div>
<div class="MsoListParagraph" style="margin-left: 11pt; text-align: left;">
<br />
<span style="color: red; font-family: "verdana" , sans-serif;"><i>Pl let me know your practical challenges and let us discuss the solutions approach.</i></span><br />
<span style="color: red; font-family: "verdana" , sans-serif;"><i><br /></i></span></div>
<div class="MsoNormal" style="text-align: left;">
<br /></div>
<br /></div>
Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com2tag:blogger.com,1999:blog-6070566171446416677.post-786260790937678692020-04-09T12:30:00.000+05:302020-04-09T12:30:41.629+05:30How to measure inventory and set the target?<div dir="ltr" style="text-align: left;" trbidi="on">
One of the questions most of the business head used to ask is, " How do I know my inventory level is high or low? How can I measure Inventory and I track? What is the benchmark for the inventory level?<br />
<br />
<br />
My answer would be as follows.<br />
<br />
Comparing or benchmarking may not give the right approach. As we discussed in the <a href="https://businesstransformationinsights.blogspot.com/2018/05/managing-inventory-with-holistic.html" target="_blank">Holistic approach to managing Inventory in small, emerging organizations</a>, Inventory is a function of many factors like your business, trade type, supply chain factors, product mix, lead time, volume vs. variety.<br />
The benchmarking may not give you clarity about all the elements in the benchmarking industry or organization.<br />
<br />
Instead, understand your inventory metrics as on today, set a target to reduce it every year from now on.<br />
<br />
<b><u><span style="color: red;">How should I measure my Inventory?</span></u></b><br />
<br />
There are different measures to measure Inventory.<br />
<br />
For example, you can measure your inventory value as a % of sales. Every month, you can measure and track your inventory value regarding your sales value.<br />
<br />
Another proven method of measuring Inventory is <b><u><span style="color: blue;">Inventory Turn</span></u></b>, which implies your organizational capability of turning Inventory frequently to achieve the sales.<br />
<br />
Inventory Turn = Cost of Goods sold / Avg Inventory.<br />
<br />
Cost of goods sold = This is the cost to make the goods like raw material cost + manufacturing expenses + any other indirect expenses.<br />
<br />
Average Inventory = In a given period, say in a month's time frame, you can take the average Inventory you are maintaining. For example, you can add up all the day's Inventory in a month and divide by the working days. That will give the average Inventory.<br />
<br />
Some organization has a practice of taking closing stock or opening stock, but that will be skewed to an extraordinarily high or low value.<br />
<br />
For example,<br />
<br />
To make an annual sales turnover of 100 lakhs, if you have avg inventory 100 L, Your inventory turn would be 100/ 100 =1<br />
alternatively, for the same sales turnover of 100 lakhs, if you have avg inventory 50 L, Your inventory turn would be 100 / 50 =2<br />
In case, if your avg inventory is 10 L, your inventory turn would be =100/10 = 10<br />
<br />
The higher the inventory turn, the more active you are.<br />
<br />
If there is a higher inventory turn, that means, with minimal Inventory, you are turning many times to achieve the sales turnover, result in lesser working capital or better cash flow.<br />
<br />
Hence, one of the practical measures of Inventory would be " Inventory Turn."<br />
<br />
Increasing Inventory Turn is possible only when you look into the root causes of the symptoms and initiating strategic and tactic initiatives.<br />
<br />
That is a continuous activity, and you need to benchmark yourself and continuously work on optimizing the Inventory without affecting the delivery performance.<br />
<br />
<u>Now the action for your organization is </u><br />
<br />
<i><span style="color: red;">1. What is your organizational Inventory Turn?</span></i><br />
<i><span style="color: red;">2. What is the target you are setting for the next year to increase your Inventory Turn?</span></i><br />
<br />
<br />
<br />
<br />
<br />
<br /></div>
Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-19340571597869530712020-04-04T17:53:00.000+05:302020-04-04T17:53:51.473+05:30Difference between OTD and Delivery Actualization<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">Most of the organizations have been measuring many KPI's related to delivery performance to the customers. Out of many measures, commonly used measures are <i>Delivery actualization %</i> and <i>Ontime delivery (OTD) %</i>. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Even though those measures are meant for delivery performance assessment, there is slight difference in the purpose and desirable behavior expected from those measures. In reality, both measures often interchangeably used and sometimes confused.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Given below some clarifications on both the measures (KPI's) and its purpose.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="color: blue; font-family: Verdana, sans-serif;"><b><u>Delivery Actualization %:</u></b></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">This measure is calculated as follows</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Delivery Actualization % = Quantity delivered / Quantity committed to the customer</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">for example,</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">the customer asked for 1000 pieces/month, and as an organization, you accepted to deliver 1000 pieces/month and if you delivered only 800 pieces/month, then </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Delivery Actualization % would be 800/ 1000 = 80 %</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Likewise, for each customer, you can calculate and finally arrive at your average delivery actualization.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;"><i><u>This measure will indicate your performance towards meeting the delivering commitment in terms of quantity.</u></i></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Pl, note that this measure is not concerned about the TIMELINE.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">This measure indicates your organizational INTERNAL CAPABILITY towards delivery commitment.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="color: blue; font-family: Verdana, sans-serif;"><b><u>On-time Delivery (OTD) %:</u></b></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">This measure is calculated as follows for each customer</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">On-Time Delivery % = No of components delivered full qty ON TIME / Total no of components</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">For example, a specific customer has 30 components that must be delivered in full qty as per the timeline committed either as per PO or by 1-1 mutual agreement.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Out of 30 components, you might have met 25 parts delivered on the EXACT DATE in full quantity as committed and remaining parts, you might have missed out on the DELIVERY TIME COMMITMENT. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">then , OTD % will be 25/ 30 =83 %</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;"><i><u>This measure indicates your performance towards meeting customer's requirements on time.</u></i></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Pl note that in the above example, you might have delivered <b>all the quantity </b>by the month-end and might have achieved 100 % delivery actualization. But you missed the timeline (OTD) target.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">from the customer point of view, your timeline commitment is also critical even though you met quantity commitments at the end of the month.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="color: blue; font-family: Verdana, sans-serif;"><b>To sum up,</b></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="color: red; font-family: Verdana, sans-serif;"><i>OTD is important from the customer perspective on the timeline</i></span><br />
<span style="color: red; font-family: Verdana, sans-serif;"><i><br /></i></span>
<span style="color: red; font-family: Verdana, sans-serif;"><i>Delivery actualization is important from internal capability and loss of sales perspective.</i></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;"><b><i>However, as a business head, you must be sensitive to both measures of delivery even though the intention of each measure is different.</i></b></span><br />
<b><i><br /></i></b>
<br />
<br />
<br /></div>
Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-51337832592968200902020-04-03T23:45:00.005+05:302020-07-05T08:30:16.256+05:30Presupposition for Business and Leadership<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-YyIwgilElvI/Xuj643V0qGI/AAAAAAAABrw/j5NtHGSaqW4TjxR4lGCUp5SRZXujxRx4gCK4BGAsYHg/s3667/connecting%2Bdots.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="3667" data-original-width="3428" height="320" src="https://1.bp.blogspot.com/-YyIwgilElvI/Xuj643V0qGI/AAAAAAAABrw/j5NtHGSaqW4TjxR4lGCUp5SRZXujxRx4gCK4BGAsYHg/s320/connecting%2Bdots.jpg" /></a></div>
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div>
<span style="font-family: "verdana" , sans-serif;">A presupposition is something you believe that it is true without any proof. Your actions are based on the presupposition. As a business head, you need to have some presupposition about your business.</span></div>
<div>
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div>
<span style="font-family: "verdana" , sans-serif;">Given below some of the presupposition I use to insist on my client's business when I interact with them. That works well in relooking their beliefs and the way they conduct the business.</span></div>
<div>
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<blockquote class="tr_bq">
<span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;"><i>No individual is important than the organization</i></span></blockquote>
<i> <span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;">Separate family relationship and business accountability</span></i><br />
<i><br /></i>
<i><span style="background-color: white;"> </span><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;">Set the policies or processes whenever there is ambiguity</span></i><br />
<i><br /></i>
<i><span style="background-color: white;"> </span><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;">Leaders should do what he expects from others. People are watching.</span></i><br />
<i> </i><br />
<span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;"><i> Treat all the stakeholders equally</i></span><br />
<i><br /></i>
<i><span style="background-color: white;"> </span><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;">All the business at the end of the day is to serve the customers and make money. So, No business is special.</span></i><br />
<i><br /></i>
<i><span style="background-color: white;"> </span><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;">Being the Leader is a privilege. Leverage it for serving.</span></i><br />
<i><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;"><br /></span></i>
<i><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;"> Irrespective of your age, designation, and authority, in your given area, you are the leader. Feel the responsibility.</span></i><br />
<i><span style="background-color: white; color: blue; font-family: "verdana" , sans-serif;"><br /></span></i>
<span style="color: red; font-family: verdana, sans-serif;"><span style="background-color: white;"><i>Pl add if anything else</i></span></span><br />
<br />
<br />
<br />
<br />
<br /></div>
Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-53323338110055344482020-04-01T11:36:00.000+05:302020-04-01T11:36:01.533+05:30Factors to be considered while recruiting CEO or Plant Head<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-9QYXYniQz5w/XoQueLG8TZI/AAAAAAAABns/kJNwMkeWORAo6Ss7rmGuaITD-9CN10kzgCLcBGAsYHQ/s1600/how%2Bto%2Bdecide.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1132" data-original-width="1600" height="226" src="https://1.bp.blogspot.com/-9QYXYniQz5w/XoQueLG8TZI/AAAAAAAABns/kJNwMkeWORAo6Ss7rmGuaITD-9CN10kzgCLcBGAsYHQ/s320/how%2Bto%2Bdecide.jpg" width="320" /></a></div>
<div style="text-align: center;">
<span style="font-family: verdana, sans-serif;"><br /></span></div>
<span style="font-family: verdana, sans-serif;">One of the challenges for most of the promoters of the small, emerging organizations are recruiting the right person as CEO or plant head, (depends on the size of the organization, the designation terminology varies).</span><br />
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">The real intention of recruiting to head of the organization is to bring professionalism in the organization and accelerate the growth of the organization from solo management of promoter or group of family members.</span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">When the right person is not recruited and placed successfully *, the scenario has the following consequences in the organization.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">*Here the success is the new business head settled down in the organization well and started delivering the results by taking care of all stakeholders.</span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">1. From the business perspective, the compensation being paid to the business head becomes a liability as the business already is looking at the expenses as relatively higher, as it has not committed higher expenses as salary done earlier. </span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">2. When the value alignment is not there between the promoter or the new CEO or the plant head, it is going to be mentally disturbed to the promoter as he feels guilty of making mistakes</span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">3. It signals to the organization members that no new person can stay in the organization for a longer duration and eventually complacent and superiority complex encompasses inside the organization.</span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">From the all the perspective, in a small, emerging organization, the new CEO or plant head must be right, competent, adaptable to small organization business practices and at the same time, should lead and bring the changes in the organization as initially intended of bringing a professional outsider in an organization where it had been operated by the promoter through his/ her own way.</span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">The promoter should have more scrutiny in finalizing the right candidate for heading the organization and take the organization to the next level.</span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
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<span style="font-family: "verdana" , sans-serif;">Some of the factors to be considered while screening and recruiting the person during the interview process </span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>1. The organization needs DRIVER than CONDUCTOR:</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">Unlike large or established organizations, the small, emerging organization may not have the systems and processes established in all business activities. Also, the people in the organization are generally multitasked or multifunctional oriented, but lack of specialized, core competent in any particular function Someone has to drive to design and implement the systems and processes in the organization. Given the nature of the small business dynamics, any new system and process implementation initiative call for patience, going along with people, educating, handholding the people and relatively the effort takes time to see the result. </span><br />
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<span style="font-family: "verdana" , sans-serif;">The designated CEO or business head or plant head must have the aptitude to drive the change rather than the person who is comfortable to sustain and run the system driven organization. Hence while recruiting the promotor must check the person’s attitude towards the business and people in driving the change.</span></div>
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<span style="font-family: "verdana" , sans-serif;">I had observed in many organizations, the promoter is going by the past history or the creditability of the candidate who worked in multinational, reputed organizations at senior positions. But the person seems to be comfortable in working in a stabilized environment and not comfortable in an unorganized environment. When the person is recruited, each end becomes unhappy with each other within a short time. Hence, the promoter must check the aptitude of the candidate to work as an entrepreneur in small organizations to bring the change rather than conducting the business seamlessly in an established environment.</span></div>
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<span style="font-family: "verdana" , sans-serif;">How can it be checked during the interview process?</span></div>
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<span style="font-family: "verdana" , sans-serif;">1.<span style="white-space: pre;"> </span>Make the expectation clear and explain the context of the difference between small and established organizational dynamics and ask for their comfort to deal with the challenge</span></div>
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<span style="font-family: "verdana" , sans-serif;">2.<span style="white-space: pre;"> </span>Check the past work on initiating change management efforts, turnkey experiences </span></div>
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<span style="font-family: "verdana" , sans-serif;">3.<span style="white-space: pre;"> </span>Prompt them to share their experience in working in ambiguity environment, their success and failure stories</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>2. Check the Business Acumen of the candidate:</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">Since the new business head or CEO is expected to work at a higher level, the promoter needs to check the business acumen of the candidate in the CV or during the interview stages. Business acumen means aptitude towards business profitability, growth, and sustainability factors. Most of the people have worked in any one function and acquire deeper knowledge and experience in a particular domain. In the new position, it is expected to have both functional business acumen together. For example, one person might have solid experience in OPERATIONS throughout their career and if you expect him to drive marketing, sales, P&L, he/ she may find it difficult unless the person is open to learn quickly and adapt to the new requirement.</span></div>
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<span style="font-family: "verdana" , sans-serif;">I know in one of the organizations, the person with strong experience in sales was made as CEO of the business, in which the engineering and manufacturing are critical functions to get more sales. But the new person finds it difficult to drive the engineering and manufacturing team and also struggles in his core sales function because of the internal environment. This scenario is not good for both people and for the organization.</span></div>
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<span style="font-family: "verdana" , sans-serif;">It does not mean that people with a core functional domains cannot be successful in managing the business. It just needs passion, interest, willingness to unlearn and learn new things and the ability to give up some strength to gain new strength. </span></div>
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<span style="font-family: "verdana" , sans-serif;">Hence, check the business acumen of the candidate when you are looking for a business head.</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>3.Understand the background of the candidature:</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">During the interview, spend quality time understanding the candidate’s background in terms of family, age, the intention behind the shift to small size organization, the financial background to some extend possible. This probe will give some clarity on the person’s stay probability in the organization. </span></div>
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<span style="font-family: "verdana" , sans-serif;">Also, the promotor can check the person’s short- and long-term plans about his career and ask his consent to stay in the organization for a minimum of 3 years. In today’s scenario, with given opportunity, we can not force or predict the stay duration, but having an open discussion during the one to one conversation helps both to ensure continuity.</span></div>
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<span style="font-family: "verdana" , sans-serif;">Frequent changes at a higher level will affect the stability of the organization and slow down the progress.</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>4.Compatible with your organization culture</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">Checking the compatible with your organization culture is very tricky and the intention itself to be questioned. The new business head or CEO is being recruited to bring a change in the work culture, business practices and as a promoter, if you expect to continue the same culture even under the new business head, that will bring conflict.</span></div>
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<span style="font-family: "verdana" , sans-serif;">But the point needs to be understood in a right, balanced context.</span></div>
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<span style="font-family: "verdana" , sans-serif;">As an organization, you have some good practices as culture and some areas to be changed as you perceive it poor culture for business growth. Hence you need to check the compatible in some of the right practices.</span></div>
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<span style="font-family: "verdana" , sans-serif;">For example, you are a person with soft-spoken, respecting individuals, involving all in the decision-making process, looking for the long term even loss in short term, the same thing you might have inculcated in your organization as a culture. Now check with the candidate about the compatibility on those parameters by checking his past work experience, asking him to share his approach in dealing with some challenges, narrate your recent incident and check his thought process of dealing with the incident. Those kinds of conversations during the interview process will give an idea about the personal ideology, behavior to some extent. As said, understanding the person’s attitude during the interview is very difficult and this skill needs to be learned by experience only.</span></div>
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<span style="font-family: "verdana" , sans-serif;">The point is as a promotor, you need to check the compatibility on the values during the interview process to avoid disappointment at a later stage which is not good for anyone.</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><i>Ultimately, as a promoter or entrepreneur, you are accountable to bring the right successor to you and you want to take the organization to next level. You must be prepared enough in identifying and selecting the right candidate as a business head or CEO to your organization.</i></span></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-79152123704361184982020-04-01T11:02:00.001+05:302020-04-01T11:02:11.480+05:30Why as a leader you need to be more disciplined?<div dir="ltr" style="text-align: left;" trbidi="on">
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One of the phrases i often hear from most of the business
heads of a small, emerging business is “My people are not disciplined”.<o:p></o:p></div>
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When i go in-depth on this conversation, i realize that the
business head himself is not disciplined enough and i can correlate the
people’s behavior in the so-called discipline aspects.<o:p></o:p></div>
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Let us understand what is meant by discipline in the
organizational context.<o:p></o:p></div>
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Most of us relate the word discipline with personal conduct
or in more specific to the punctuality to the organization and to the meetings.
I accept this as a discipline, however, in my opinion, this is a must for any
individual, but this is a low order of discipline. This must-have adhered 100 % and
no compromise on it.<o:p></o:p></div>
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What is a high order level discipline that is really required for the
organization?<o:p></o:p></div>
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<!--[if !supportLists]--><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]-->Consistency in doing in any activities <o:p></o:p></div>
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<!--[if !supportLists]--><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]-->Alignment in what is being told and the action
being done<o:p></o:p></div>
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The above disciplines must be demonstrated by the leaders.<o:p></o:p></div>
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There only the leader’s role comes in a big
way. <o:p></o:p></div>
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I know one CEO is very punctual to the
organization and not consistent in other business-related activities like
conducting reviews regularly, frequently switching on and off on any new initiatives,
not adhering to his commitments to the team. When he is not disciplined enough, the team also behaves in a less disciplined way because people are watching their role
model always. In the organizational setup, the business head is a role model.<o:p></o:p></div>
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People and organizational culture will be
in line with the leader’s way of working even though the leadership team can preach many motivational contents to the team.<o:p></o:p></div>
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<span style="color: blue;"><i>As a leader, you need to be more disciplined,
that is maintaini</i>ng consistency in your thoughts, behaviors, and actions
because people are watching you!</span><o:p></o:p></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-83668971170113701162020-03-30T23:04:00.001+05:302020-03-30T23:04:30.561+05:30Why portfolio clarity is required among family members in the small ,emerging organization?<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">In most of the family business, one of the common patterns I see is that all the family members use to get involved in all the business matters. Still, at the end of the day, either decision never gets taken or decisions deferred as no one will have the final say. In this process, the organization remains mediocre, or the growth opportunities are not leveraged as supposed to be.</span><br />
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<span style="font-family: Verdana, sans-serif;">There is no doubt that the organization had grown from startup to significant size due to the mew hardworking family members. However, if you want to take the organization to the next level growth or if you want to make the organization more of the professional firm by bringing external talent, the first step would be restructuring at the senior leadership level, ie family members level.</span><br />
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<span style="font-family: Verdana, sans-serif;">One of the restructuring processes is bringing clarity on the portfolio among the family members</span><br />
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<span style="color: red; font-family: Verdana, sans-serif;">What does Portfolio clarity mean?</span><br />
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<li><span style="font-family: Verdana, sans-serif;">For each family member, define the roles and responsibilities according to their qualification, strength, and experience.</span></li>
<li><span style="font-family: Verdana, sans-serif;">Assigning the particular functions or set of functional deliverables </span></li>
<li><span style="font-family: Verdana, sans-serif;">Empowering an individual to make decisions in their respective functions or domain. To continue the inherent, inclusive way of working, the information to be shared among family members periodically. </span></li>
<li><span style="font-family: Verdana, sans-serif;">Making people accountable for the result</span></li>
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<span style="color: red; font-family: Verdana, sans-serif;">Benefits of portfolio clarity among family members:</span><br />
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<span style="font-family: Verdana, sans-serif;">1. Mainly, organization growth can be accelerated as inherently, and the business has resources. Still, due to a lack of clarity on portfolio clarity, resource's time is getting wasted by involving in all business matters and enriched with only information.</span><br />
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<span style="font-family: Verdana, sans-serif;">2. Duplication of roles and responsibility can be avoided, and the resources can be utilized effectively</span><br />
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<span style="font-family: Verdana, sans-serif;">3. Gives clarity to the people of the organization on whom they should report for what purpose. The clarity at a higher level will remove the ambiguity among the employees, and also we can avoid the manipulation of communications by the employees.</span><br />
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<span style="font-family: Verdana, sans-serif;">4. The decision can be taken faster which helps the organization to respond quickly to the external world.</span><br />
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<span style="font-family: Verdana, sans-serif;">5. Bring out the extraordinary talent of the individual when they work under pressure to deliver the results</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;"><i>When the business is growing from small to large size, professionalism will help to accelerate the growth and for the benefit of the organization's growth, relationship and accountability need to be balanced through portfolio clarity among the family members!.</i></span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-74460060260429565872020-03-29T16:46:00.001+05:302020-03-29T16:46:41.395+05:30Step by step process in implementing organization wide performance management system <div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;">One of the dreams or visions for most of the business head of the small, merging organization is to make the organization a system driven and to implement performance-driven management.</span><span style="font-family: "verdana" , sans-serif;"><br /></span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">As we discussed the </span><span style="font-family: "verdana" , sans-serif;"><a href="https://businesstransformationinsights.blogspot.com/2018/08/need-for-organizationwide-performance.html" target="_blank">need for an organization-wide performance management system</a>, now let us learn the step by step implementation step to make the performance management throughout the organization.</span><br />
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<a href="https://1.bp.blogspot.com/-5oTPJgzWG3w/XoB_JyWALfI/AAAAAAAABnQ/SGEunzzfGEAtjlwOKEsIHlenN_bEiFbaQCLcBGAsYHQ/s1600/Deployment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="889" data-original-width="1354" height="262" src="https://1.bp.blogspot.com/-5oTPJgzWG3w/XoB_JyWALfI/AAAAAAAABnQ/SGEunzzfGEAtjlwOKEsIHlenN_bEiFbaQCLcBGAsYHQ/s400/Deployment.png" width="400" /></a></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b><u>Step1:</u></b></span><br />
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<span style="color: red; font-family: "verdana" , sans-serif;"><i>Implementing Business performance management, keeping the second level reportees as stakeholders.</i></span><br />
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<span style="font-family: "verdana" , sans-serif;"><b>Business Level Performance Management :</b></span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span><span style="font-family: "verdana" , sans-serif;">When the organization is small, or the first time, the organization is getting into the performance management system, the logical step would be determining the important business key performance metrics along with some of the functional key performance metrics and start measuring. Key performance metrics can be measured and tracked by the business heads and his/ her second level reportees, mainly functional heads. </span><br />
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<span style="font-family: "verdana" , sans-serif;">For example, some of the business KPI's like sales turnover, inventory cost as a % of sales, Plant effectiveness, attrition rate, % of NPD contribution over sales can be measured and tracked. This set of performance metrics can be reviewed along with functional heads, and they can be encouraged to work on the action plan to improve the business performance.</span><br />
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<span style="font-family: "verdana" , sans-serif;"><i>This process implementation duration can be one year. </i></span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span><span style="font-family: "verdana" , sans-serif;"><b>Benefits of business-level performance management :</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">1. Senior leadership team becomes familiar with the process of performance management even though they are not feeling fully accountable for the result and but they feel they are part of the process.</span><br />
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<span style="font-family: "verdana" , sans-serif;">2. Enhances the engagement among functional heads or second level reportees o when the business head reviews along with them every month or weekly </span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b><u>Step 2:</u></b></span><br />
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<span style="color: red; font-family: "verdana" , sans-serif;"><i>Implementing Business performance management as done in the first year and arriving suitable functional level performance management, keeping the second level reportees and their team as stakeholders.</i></span><br />
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<span style="font-family: "verdana" , sans-serif;"><br /></span><span style="font-family: "verdana" , sans-serif;"><b>Business +Functional Level Performance Management </b></span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Since the organization already familiarizes itself with a business-level performance management system in the first year, now the organization can have Business performance metrics that can be set by the business head and tracked along with the functional head.</span><br />
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<span style="font-family: "verdana" , sans-serif;">In the second level, detailed functional level performance metrics can be set and assigned to the second level or operational head level. The functional performance parameters can have more functional oriented and some of the business metrics as derived from business KPI's from the business head.</span><br />
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<span style="font-family: "verdana" , sans-serif;">For example, the supply chain function can have more functional metrics like no of vendors developed, inventory level at different levels, freight cost as % of sales, and so on. Similarly, for all functions, we can have more functional level metrics which can be assigned to respective functional heads and their team.</span><br />
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<span style="font-family: "verdana" , sans-serif;">The functional heads and teams can be encouraged to present the performance metrics trend and a detailed action plan for the business head every month.</span><br />
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<span style="font-family: "verdana" , sans-serif;"><i>This process implementation duration can be one year. </i></span><br />
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<span style="font-family: "verdana" , sans-serif;"><b>Benefits of business + functional performance management :</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">1. The focus will be given in-depth to the functional effectiveness, by the way, measurements are extended to all functional key activities</span><br />
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<span style="font-family: "verdana" , sans-serif;">2. Since we involve functional heads and their team, their involvement and focus is improved on functional effectiveness</span><br />
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<span style="font-family: "verdana" , sans-serif;">3. Most of the organization covers under different functional metrics and performance measurement system, eventually, there will be an improvement in the communication process, visibility of issues and the solutions approach, understanding the pains of cross functions enhances significantly.</span><br />
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<span style="font-family: "verdana" , sans-serif;">4. Eventually, engagement enhances across functions</span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>Step 3 :</b></span><br />
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<span style="color: red; font-family: "verdana" , sans-serif;"><i>Implementing Individual-level performance metrics which is derived from business and functional performance metrics </i></span><br />
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<span style="font-family: "verdana" , sans-serif;"><b>Business Performance Management + Functional Performance Management + Individual performance management :</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">Since the organization already familiarize itself with the business performance management system in the first year and the functional team engaged in the functional performance system in the second year, now the organization widens the performance management net to all the people in the organization. Ideally, it can be extended to executives, first-line supervisors level.</span><br />
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<span style="font-family: "verdana" , sans-serif;">In this process, each individual is given a set of performance metrics that will have linkage with the functional parameters, which is derived from business metrics.</span><br />
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<span style="font-family: "verdana" , sans-serif;">Each individual is accountable for improving their metrics and report the progress. The review period can be once every quarter or monthly basis, depending on the bandwidth of the organization. It is the responsibility of the functional head to review the progress of their team members. </span><br />
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<span style="font-family: "verdana" , sans-serif;">For example, the individual depending upon the level in the organization can be given performance metrics that are related to his/ her functions. Also, some of the development plans can be added.</span><br />
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By the way, almost the entire organization is governed by performance metrics related to business and functions.</span><br />
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<span style="font-family: "verdana" , sans-serif;"><b>Benefits of organization-wide performance measurement system:</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">1. Since the direction is set for the organization at business, functional, and individual levels; it improves the focus and engagement.</span><br />
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<span style="font-family: "verdana" , sans-serif;">2. Eventually, the organization gets clarity of performer and non-performer, and this will help to focus on people developmental efforts </span><br />
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<span style="font-family: "verdana" , sans-serif;">3. When the rewards and recognitions are based on the performance, it brings visibility, differentiates the performers and non-performers, improves the culture towards self and organizational performance improvement</span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><i>Overall, performance management brings engagement among people, eases the communication, improves the focus on results or solutions, and thereby culture would become more of winning than blaming or complaining.</i></span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><i><u>Implementing the organization-wide performance management system is a long process and needs to be implemented in a phased manner for sustaining the results and involving all the stakeholders to create performance-based culture!</u></i></span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-83432265025155230332020-03-27T15:27:00.001+05:302020-03-27T15:27:05.040+05:30Learn the art of conducting Business Review Meeting<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">In the organization, one of the effective forums for engagement or one of the time-waster can be REVIEW MEETINGS !. The conclusion depends on the way the business head or the leaders conduct the meetings. </span><br />
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<span style="font-family: Verdana, sans-serif;">Conducting a purposeful and Result driven review meeting is an art, and the business head and other leaders can learn with conscious effort.</span><br />
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<span style="font-family: Verdana, sans-serif;">Let us discuss some of the insights about the review meetings and the solutions approach to make it effective.</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;"><b>Mindset related to review meetings:</b></span><br />
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<span style="font-family: Verdana, sans-serif;">some people look at the meeting as wasting of time and believe that the meeting is not going to help. Eventually, they never conduct any meeting, and even if it requires some decision to be taken, they use to call the individuals over the phone or 1-1 conversation and again convey the discussion to someone else. In this process, actually, the business head or leader's personal productivity is getting affected.</span><br />
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<span style="font-family: Verdana, sans-serif;">I observe that the mindset behind this, the business head is not interested or has not learned the art of conducting review meetings. The reason can be fear of facing people in a forum, not able to hold the review meeting effectively. This root cause needs to be understood and challenged.</span><br />
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<span style="font-family: Verdana, sans-serif;">Hence, the mindset and belief about the meeting need to be changed. Meeting need to be seen as a forum of related people to discuss, take decision collectively, and in the process, communication issues, the time delay can be avoided. Once the mind shift happens, the leader is in a position to learn the art of conducting reviews.</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;"><b>Fixed Meeting Reviews as much as possible :</b></span><br />
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<span style="font-family: Verdana, sans-serif;">In a smart organization, one good pattern, we can see is the fixed meeting reviews on a daily / weekly basis. For example, the sales review meeting will be every Monday at 2pm, Production review meeting every day at 9.30 am, and so on.</span><br />
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<span style="font-family: Verdana, sans-serif;">When you have a habit of fixing the meeting reviews on a daily / weekly basis at a fixed time, it improves the planning process of all the stakeholders, and the accountability to the meeting outcome will improve eventually as the agenda, and people's responsibilities are almost fixed.</span><br />
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<span style="font-family: Verdana, sans-serif;">When you call for ad-hoc meetings, the people may not be prepared for the agenda, data may not be available; eventually, the effectiveness of the meeting will also be less. It does not mean that we should not have an Adhoc meeting, as it depends on the business situation. It needs to be understood from the right perspective.</span><br />
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<b style="font-family: Verdana, sans-serif;"><span style="color: blue;">Be clear on the meeting purpose - Business or Technical Review?</span></b><br />
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<span style="font-family: Verdana, sans-serif;">I have seen in many organizations, the business head diverts the review purpose by going in microanalysis or shifting the focus to technical aspects. For example, in one of the monthly P&L review meetings, the purpose of the review should be reviewing the previous month's sales performance, expenses, and profitability and to discuss the future action plan. The discussion calls for high-level decision making on specific business-related issues. Rather than focusing on the business issues, the business head and the engineer get into the details of rejections, tool design, and engineering dimensions, and the whole meeting purpose is defeated. The other people's time also was wasted. If the technical aspect is important and to be discussed, nothing wrong in that, that can be done offline along with the respective people in a detailed manner. The business head decision is essential in the business review meeting, and he must be conscious of his/her focus on business and technical aspects.</span><br />
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<span style="font-family: Verdana, sans-serif;">As a business head, you need to be conscious about working on macro and micro details and need to be aware of switching in and switching out.</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;"><b>The other disciplines of conducting review meetings:</b></span><br />
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<li><span style="font-family: Verdana, sans-serif;">start on time and finish it on time</span></li>
<li><span style="font-family: Verdana, sans-serif;">Go by the data or fact, less on opinion and emotional aspects</span></li>
<li><span style="font-family: Verdana, sans-serif;">Respect each one to voice their concerns, ideas, and suggestions</span></li>
<li><span style="font-family: Verdana, sans-serif;">Focus more on the decision /actions</span></li>
<li><span style="font-family: Verdana, sans-serif;">Be patience when others are talking</span></li>
<li><span style="font-family: Verdana, sans-serif;">Learn the art of questioning and giving feedback with the intention of curiosity and improvements than finding fault and blaming.</span></li>
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<span style="color: red; font-family: Verdana, sans-serif;"><i>The facilitation skill of the chair is important in making the meeting more effective or just time wasters. The good news is that facilitation skill can be learned through awareness and practice!</i></span></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-32210510524278459292020-03-26T13:07:00.000+05:302020-03-26T13:07:24.116+05:30Business Head's Mindset for Sustainable Growth<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;">In any business, there are peak and valley in terms of sales growth and profitability. However, a few organizations thrive well all the cycles and been in the business for a longer time, some organizations exist even beyond the third generation. </span><br />
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<span style="font-family: "verdana" , sans-serif;">When I observe those organizations, when I deal with them as a consultant and coach, there are some typical patterns among the founders or the business heads. I can call those patterns as the mindset of the founder or the business head, which makes the business to manage through all the struggles and sustaining the growth.</span><br />
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<span style="font-family: "verdana" , sans-serif;">I can classify the mindset into three areas</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;">1. Mindset towards the Business</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;">2. Mindset towards the People or Employees</span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;">3. Mindset towards the Customer</span></div>
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<span style="color: red; font-family: "verdana" , sans-serif;"><b>1. Mindset towards the Business:</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">In a sustainable business, the business head looks at the business with a larger purpose than just survival alone. He/ she is looking at the business as a means to maximize all the stakeholder's interests or expectations. The stakeholder could be financial institutions, employees, customers, even the promoters, suppliers, government, and the society in which business is operating. It does not mean that profit motive is absolutely absent, they also realize that rich cash reserve only will do all the activities to maximize the stakeholder's expectation. The point is they look at the business more than themselves. Their thought process, behaviors and decision making are all pointed towards meeting or maximizing the stakeholder's interest.</span></div>
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<span style="color: red; font-family: "verdana" , sans-serif;"><b>2. Mindset towards the People or Employees:</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">In a sustainable business, the business head always looks at the employees as an Asset rather than Commodity. This mindset is essential in making decisions on development, training, allowing the people to experiment, taking the risk, empowering people to make decisions, and providing an opportunity for learning and to grow along with the organization. Alternatively, if the business head looks at the people as a commodity, he treats them also in a low-level dignity, because he believes that there is abundance in people resources, even if x leaves the organization, Y can be recruited quickly from the market. With the mindset, no effort would be taken towards people's development and engagement aspects. </span></div>
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<span style="font-family: "verdana" , sans-serif;">I know in one of the organizations, the CEO looks at each people as an asset, and some of the people are staying in the organization for more than 30 years and also had grown along with the organization by developing themselves and contributing to the organizational growth.</span></div>
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<span style="color: red; font-family: "verdana" , sans-serif;"><b>3. Mindset towards Customer:</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">In a sustainable business, the business head looks at each customer from a long term perspective even though there is a loss of monetary benefit in the short term. The focus of the business head would be meeting or exceeding the customer's expectation, maintaining a cordial relationship with the customer irrespective of the customer's representative that is changing at the customer's end.</span></div>
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<span style="font-family: "verdana" , sans-serif;">As stated above organization, the business head works with only a few customers for more than 25 years and grown along with the customer. Even when the business head expands his business beyond the old customers, the customer is keen to work with the organization. The relationship is based on the long term, and the bonding helps both of them in terms of mutual growth.</span></div>
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<span style="font-family: "verdana" , sans-serif;"><i>The point is the business head's mindset towards business, customers, people make a significant impact on the sustainability of the business!</i></span></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-88455809504005975302020-03-25T10:02:00.001+05:302020-03-25T10:02:43.120+05:30How do you measure your business or plant effectiveness as a Business Head?<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;">As you are aware the famous quote, "what you measure is what you get."</span><br />
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<span style="font-family: "verdana" , sans-serif;">Measuring is very significant for business performance, and what and how you measure is very critical. If you measure wrong or suboptimal or standalone, then your business performance will also be suboptimal.</span><br />
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<span style="font-family: "verdana" , sans-serif;">Typically, we use to measure our business or plant in the following ways.</span><br />
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<span style="font-family: "verdana" , sans-serif;">1. Utilization perspective :</span><br />
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<span style="font-family: "verdana" , sans-serif;">2.Efficiency perspective :</span><br />
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<span style="font-family: "verdana" , sans-serif;">3. Capacity perspective :</span><br />
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<span style="font-family: "verdana" , sans-serif;">4.Machine hour rate perspective:</span><br />
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<span style="font-family: "verdana" , sans-serif;">5. Yield performance perspective:</span><br />
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<span style="font-family: "verdana" , sans-serif;">All those measures are right and serve the purpose to some extent for what it is intended. For example, you may be measuring capacity utilization as the ratio of production qty/capacity installed, which measures say, for example, 80 %, that means you may conclude that 80 % of the installed capacity is utilized. It may not give the other information like the efficiency during the production and how much actively passed through quality specification and how much cost you incurred and so on.</span><br />
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<span style="font-family: "verdana" , sans-serif;">Likewise, all the above typical measurements will give you standalone, suboptimal information to you about each function, and you need to look at altogether to arrive at some common conclusion about your overall business or plant performance.</span><br />
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<span style="font-family: "verdana" , sans-serif;">To overcome the above limitations only, smart organizations adopt one measure, which will give a holistic view of your plant or business effectiveness rather than standalone performance or utilization or yield performance.</span><br />
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<b><span style="color: red; font-family: "verdana" , sans-serif;">Introduction to Overall Plant Effectiveness or Overall Equipment Effectiveness :</span></b><br />
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<span style="font-family: "verdana" , sans-serif;">OPE </span></div>
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<span style="font-family: "verdana" , sans-serif;">In case your plant is small, one or few lines is determining your business profitability. You can take that line for measurement, which will have a direct correlation with your business performance. You can measure as Overall Plant Effectiveness.</span></div>
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<span style="font-family: "verdana" , sans-serif;">OEE:</span></div>
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<span style="font-family: "verdana" , sans-serif;">In case your plant is relatively large and consists of many types of equipment and lines, you can identify the most critical or constraint equipment, which you can measure holistically. There you can measure as Overall Equipment Effectiveness</span></div>
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<span style="font-family: "verdana" , sans-serif;">In a small, emerging organization, if we apply OPE or OEE rightly, this will have a direct correlation with delivery performance, sales turnover, and profitability, as I have seen in my client organizations irrespective of their manufacturing industry classification.</span></div>
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<span style="font-family: "verdana" , sans-serif;">The measure either OPE or OEE will consider the importance of EFFECTIVENESS rather than any standalone measure like efficiency, utilization, or yield performance. </span></div>
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<span style="font-family: "verdana" , sans-serif;">Now let us discuss the elements of OPE or OEE :</span></div>
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<span style="font-family: "verdana" , sans-serif;">It consists of 3 parts namely, Plant Utilization, Output efficiency, and product yield performance </span></div>
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<span style="font-family: "verdana" , sans-serif;"> detailed working is given in OEE <a href="https://businesstransformationinsights.blogspot.com/2015/10/overall-equipment-effectiveness-oee.html" target="_blank">Introduction to OPE / OEE measurement</a></span></div>
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<span style="font-family: "verdana" , sans-serif;">In the picture above, </span></div>
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<span style="font-family: "verdana" , sans-serif;">the plant utilization is given as 75 % as it is derived from the ratio of working hrs ( 6 hrs) to available hrs ( 8hrs)</span></div>
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<span style="font-family: "verdana" , sans-serif;">The output efficiency is given as 83 % as it is derived from utilization data. For example, in a given 6 hrs, the plant supposes to deliver 600 nos ( assume 100 per hour), whereas, the plant produces the actual output as 500 no's. hence plant efficiency is 500 / 600 equals to 83 %</span></div>
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<span style="font-family: "verdana" , sans-serif;">the quality performance is given as 80 % as it is derived from efficiency data, For example, 500 no's produced and 400 no's only pass through the quality test, and the final yield is 400/ 500 equal to 80 %</span></div>
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<span style="font-family: "verdana" , sans-serif;">Hence, Overall Plant Effectiveness (OPE) is a multiplication of Plant Utilization and Output efficiency and Yield improvement, <b><span style="font-size: large;">ie, 49 %</span></b></span></div>
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<span style="font-family: "verdana" , sans-serif;">So, instead of looking at standalone measure either 75 % plant utilization or 83% people or output efficiency or 80 % yield performance, we are getting a HOLISTIC MEASUREMENT to say EFFECTIVENESS as 49 %.</span></div>
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<span style="font-family: "verdana" , sans-serif;">This measure will give you a HOLISTIC idea about your plant's Effectiveness at the end of the day.</span></div>
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<b><span style="color: red; font-family: "verdana" , sans-serif;">Business Implication of EFFECTIVENESS measure:</span></b></div>
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<span style="font-family: "verdana" , sans-serif;">what does 49 % OPE or OEE indicate?</span></div>
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<span style="font-family: "verdana" , sans-serif;">Given your current sales turnover or profitability, whatever you achieve is due to operating the plant at 49 % effectiveness. If you want to improve sales turnover or profitability, it is only possible by enhancing plant effectiveness measures. Improvement of plant effectiveness measures can be working on plant utilization losses, people efficiency losses, and improving quality issues.</span></div>
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<span style="color: red; font-family: "verdana" , sans-serif;"><b>Benefits of Holistic measurement :</b></span></div>
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<span style="font-family: "verdana" , sans-serif;">1. As this measure encompasses utilization, efficiency, and quality performance, you will get a holistic idea about your plant effectiveness at the end of the day</span></div>
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<span style="font-family: "verdana" , sans-serif;">2. Easy to communicate to all FUNCTIONS </span></div>
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<span style="font-family: "verdana" , sans-serif;">3. Since all functions involved in the improvement of this measure, this measure enhances engagement</span></div>
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<span style="font-family: "verdana" , sans-serif;">4.Helps to focus on the overall performance of the plant rather than standalone areas</span></div>
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<span style="font-family: "verdana" , sans-serif;">5. It has a direct correlation with sales turnover, profitability </span></div>
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<span style="color: blue; font-family: "verdana" , sans-serif;"><i>The action point is to understand your current plant or equipment effectiveness and the reason for the losses and the improvement actions to improve the Effectiveness and, in turn, your business performance.</i></span></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-50513669263359327052020-03-24T11:06:00.002+05:302020-03-24T11:09:12.903+05:30Enhance your Planning Window for Sustainable Growth<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;">Most of the small, emerging organizations are working on the current month or week or day and may not have much clarity about the immediate medium term. This practice results in the scenario "always busy" or "firefighting" mode to serve the customers all the time. But as a business, it will lose the long sight vision or growth potential.</span><br />
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<span style="font-family: "verdana" , sans-serif;">One of the ways to come out of firefighting mode is to enhance the planning window.</span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>Planning Window :</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">Instead of planning for the current month, extend the planning horizon for the next 3 months so that the business head and the organization will have visibility about the sales potential, working capital requirement to buy Raw material, capacity availability vs. requirement. Also, this enhanced planning will give more time to RESPOND to uncertainty.</span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>Tool for enhancing the planning window:</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">The simple, yet powerful tool is 1+3 planning format. This could be used for sales projection or forecasting, working capital planning, or even for profitability projection.</span><br />
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<span style="font-family: "verdana" , sans-serif;">For example, let us take the case of sales projection into a 1+3 format.</span><br />
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<span style="font-family: "verdana" , sans-serif;">In a 1+3 sales format, you need to fill the data with sales projection for 1+3 months timeframe.</span><br />
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<span style="font-family: "verdana" , sans-serif;">1 - a month is the current month, mostly firm / confirmed order</span><br />
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<span style="font-family: "verdana" , sans-serif;">3 months can be for the next 3 months projection with firm/ confirmed order and then tentative orders</span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><b>Advantages of extending planning horizon :</b></span><br />
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<span style="font-family: "verdana" , sans-serif;">1. When you see your sales projection data down the line 3 months from now, you will come to know the order position vs. target gap. That will give you response time to reach out to existing customers for more orders or pitch-in new customers for new orders</span><br />
<span style="font-family: "verdana" , sans-serif;">2. Since any new order requires time for approaching the right customer- processing inquiry - price finalization- proto proving- getting bulk order, this 3 months time horizon will give the flexibility and sufficient response time</span><br />
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<span style="font-family: "verdana" , sans-serif;">3. If you know the projection for the next 3 months with some level of accuracy, that will help you to utilize your capacity well, manage the cash flow proactively.</span><br />
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<span style="font-family: "verdana" , sans-serif;"><i>The thought process of the business head must be proactive and beyond the current day or month for sustainable growth. This 1+3 projection will help to stimulate your thought process!</i></span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-89703999764431648972020-03-23T11:58:00.000+05:302020-03-23T11:58:02.606+05:30Customer is not interested in your inventory<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">In one of the client organizations, the team has kept two months' inventory worth of say 20 Lakhs to service the customer as directed. The client organization is supplying to one of the reputed, large scale engineering organization. The monthly avg billing is around 10 Lakhs, and the customer insisted the client keep a minimum of 2 months FG stock at any point in time. The customer made it as one of the key performance metrics for the client organization and advised to keep the customer updated on the FG inventory status periodically.</span><br />
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<span style="font-family: Verdana, sans-serif;">As I diagnosed with the organization, their overall average delivery schedule actualization to the all the customers around 60 % only, and the manufacturing plan is usually based on the urgency or followup by the customers daily.</span><br />
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<span style="font-family: Verdana, sans-serif;">We worked with the organization and identified the constraints in the casting process, and their OEE was also low as 25 %. Eventually, within nine months, their OEE started rising to 60 %, and the business head is also working on machine maintenance improvements, technology up-gradation, daily planning based on capacity rather than urgency, and so on. </span><br />
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<span style="font-family: Verdana, sans-serif;">The above said customer 's order was being fulfilled at a 100 % rate every month, and the organization's business head felt that there was no need for keeping two months FG stock as the production capacity increased to deliver the order commitment every month. So, they reduced the inventory to the safety level of 15 days, and the customers' also getting the KPI dashboard periodically as usual. </span><br />
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<span style="font-family: Verdana, sans-serif;">Things were moving smoothly. During one of the conversations between the customer's representative and the business head, the customer said that they were not particularly interested in insisting on minimum FG stock. Since their history of delivery commitment was not so good, for safer side, they asked on maintaining minimum stock. They were ok with the reduction in inventory norm as long as delivering on time.</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;"><b>The moral of the incident :</b></span><br />
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<span style="font-family: Verdana, sans-serif;"> The customer is not interested or does not want to penalize the supplier for insisting on keeping a minimum level of inventory in the name of vendor managed inventory or warehouse stock etc. as long as the supplier has the capability and flexibility to serve them. Keeping inventory is only to protect the variation in demand or supply, not to penalize the supplier.</span><br />
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<span style="font-family: Verdana, sans-serif;"><i><u>It is up to the small organization to be smart in the manufacturing process, capacity, and planning to avoid or reduce the inventory and prevent the customer from imposing any rule on keeping inventory!</u></i></span></div>
Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-25927465174829376602020-03-23T11:04:00.000+05:302020-03-23T11:04:20.397+05:30Pricing process and typical mistakes in pricing decision in small business <div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">Below some of the pricing mistakes most of the business heads do in the small, emerging organizations as I came across in my client's business.</span><br />
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<b><span style="color: red; font-family: Verdana, sans-serif;">What is meant by " Pricing"?</span></b><br />
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<span style="font-family: Verdana, sans-serif;">Pricing is a process to determine the selling price for your product or service.</span><br />
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<span style="font-family: Verdana, sans-serif;">Pricing is not just a mathematical calculation of adding all your costs, then add your desirables profit and arriving some numeric value as a selling price.</span><br />
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<span style="font-family: Verdana, sans-serif;">Pricing process even though it looks straight forward, in reality, pricing decision is more of strategic to each customer or product or services. Pricing is a combination of science and art.</span><br />
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<span style="font-family: Verdana, sans-serif;">If you fix a higher price and your product is commodity nature, then you will lose it to your competition.</span><br />
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<span style="font-family: Verdana, sans-serif;">If you fix a lower price, then you may be losing your profitability. In the long run, your business may not be sustainable to run as the cost keeps going up.</span><br />
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<b><span style="color: red; font-family: Verdana, sans-serif;">Typical mistakes in pricing process :</span></b><br />
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<span style="color: blue; font-family: Verdana, sans-serif;">1. Going by thumb rule, which was fixed a long time back. Thumb rule may not be relevant today.</span></blockquote>
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<span style="font-family: Verdana, sans-serif;">For example, I had seen some people fix their process cost as 10 % of their material cost. In contrast, in reality, as per the latest P&L analysis, even the average variable price is more than 10 %. The point is the lack of relying on the newest cost details, and going by the thumb rule puts the organization in making the mistake of wrong pricing.</span><br />
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<span style="font-family: Verdana, sans-serif;">The organization can develop the process of checking the P&L value chain every month and can have an average value of each value chain once in a quarter. That will give the business heads or cost estimation team the realistic cost structure of the organization.</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;">2. Not standardizing the costing process :</span></blockquote>
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<span style="font-family: Verdana, sans-serif;">except for few organizations, most of the organizations, the process of pricing is being done by the business head based on his / her way of estimating the cost and finally arriving the price. One way, he/she mentally prepares the estimation based on the experience and the judgment about the product and customer. Still, when the organization is growing, a standardized process of evaluation is required. The estimation process may be customized with the template and having the process checklist like lot size, changeover time, cycle time, the weight of the component, rejection %, and typical other costs like inventory, freight cost, etc. Once the organization standardize the process, and it can be delegated to engineers to make the first level costing, and the business head can have a final decision on the pricing</span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;">3. Expecting the same profitability across product lines and customers:</span></blockquote>
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<span style="font-family: Verdana, sans-serif;">as mentioned, some business head has a thumb rule of maintaining some profitability across all product lines and customers. Pricing is always strategic, and the decision will vary from customer to customer or product lines. The Business head must think about the short term and long term implications of the pricing decisions. For example, if the organization already achieved its breakeven point, it can consider any further volume or customer with less profitability than the usual profitability margin. This additional volume or new customer will bring down the cost of operation further down, and this is beneficial only for the organization.</span><br />
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<span style="font-family: Verdana, sans-serif;">The pricing is the combination of science and art. The decision must be taken by the business head, considering the short term and long term implications of the pricing sensitivity to the customer.</span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-72106689054115974082020-02-22T01:43:00.000+05:302020-02-22T01:43:03.350+05:30Why business head should differentiate performer and non performer?<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">In most of the small, emerging organizations, one of the patterns I observe is that the consistent performer is not getting recognized and rewarded suitably.</span><br />
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<span style="font-family: Verdana, sans-serif;">When I am saying rewarded means, it could be either monetary benefits or openly recognize his / her work and appreciation or giving more preference for providing exposure to training programs or learning opportunities in the workplace itself.</span><br />
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<span style="font-family: Verdana, sans-serif;">In some organizations, the business head determines the incentive or salary hike based on the loyalty measures, that who is staying in the organization for longer years.</span><br />
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<span style="font-family: Verdana, sans-serif;">when the business head does not differentiate the performer and non-performer through different means, it creates the following impact on the organization</span><br />
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<span style="font-family: Verdana, sans-serif;">1. The performer is not getting the motivation to give his/ her best as human beings; everyone craves for recognition and appreciation. When his / her extraordinary contribution goes unnoticed, either he/ she loses interest in the work or leave for a better opportunity outside the organization.</span><br />
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<span style="font-family: Verdana, sans-serif;">2. when all the people are treated equally irrespective of the performance by the business head, it sends the message to all that mediocre performance is acceptable in the organization. Eventually, the organization becomes an average performance organization.</span><br />
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<span style="font-family: Verdana, sans-serif;">Differentiating the performer and non-performer boosts the morale of the organization and also helps to promote performance culture inside the organization. </span><br />
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<span style="font-family: Verdana, sans-serif;">The practice of recognizing and rewarding the performer must be ensured and demonstrated by the business head whenever he/she spots the performance and performer for retaining the talent and to build a performance-oriented organization.!</span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-6731048969037738882020-02-11T15:34:00.000+05:302020-02-11T16:27:25.159+05:30Loyalty vs Intolerance to low performance<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "verdana" , sans-serif;">A dilemma most of the family-owned business head has is how to deal with a <i><b>mediocre performer</b></i> who is coincidentally <b><i>the relative or loyalist to the family</i></b>.</span><br />
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<span style="font-family: "verdana" , sans-serif;">This is a real concern for the business head as today's mediocre performer might have been with the organization from early-stage and might have contributed to the growth of the organization even at tough periods. In today's scenario, the person may not be able to cope with business challenges and modern business practices. Sometimes the behavior and performance of the person affect the decision making capability in the organization and may impact the morale of the people who strive for delivering performance.</span><br />
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<span style="color: red; font-family: "verdana" , sans-serif;">What should be the way out for the business head to deal with those people?</span><br />
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<span style="font-family: "verdana" , sans-serif;">1 First, the business head must realize the fact that the purpose of the business to maximize all the stakeholder's interests. The organization exists to serve all, and the organization will exist only when it is competitive.No individual is vital than the bigger purpose of the organization. This realization is a must for the organization's head.</span><br />
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<span style="font-family: "verdana" , sans-serif;">2. Second, the business head spends quality time with the mediocre person by giving the perspective about the change in the way an organization works in early times and the now in the competitive environment. The person's challenges to cope with the current business challenges need to be understood, and the necessary exposure can be given by training, coaching, and mentoring.</span><br />
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<span style="font-family: "verdana" , sans-serif;">3. Also, the person must be given some time to perform well as per expectation mutually set. This time duration can be a year or a couple of years, depending upon the role the person plays in the organization.</span><br />
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<span style="font-family: "verdana" , sans-serif;">4. If the person copes up with the modern business practices and delivering the expected results, that is a piece of good news for all, and the person can be groomed for further development.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Incase even after meticulous training, coaching, and development efforts, if the person is not willing to unlearn and learn, not intending to deliver the result as expected, the business head must speak up to the person and be prepared to separate the relationship and business.</span><br />
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<span style="font-family: "verdana" , sans-serif;">If the business head prolongs the decision to separate the business and relationship, it will inevitably affect the overall business performance, which is not suitable for anyone. The survival itself will be challenging for the business head and the entire stakeholders of the organization.</span><br />
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<span style="color: blue; font-family: "verdana" , sans-serif;"><u><i>The key is balanced, quick decision making from the business head is vital for the meeting the larger purpose of the organization.</i></u></span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-60194066930683459592020-02-11T13:33:00.000+05:302020-02-11T13:33:46.918+05:30Factors for Next Level Growth<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://1.bp.blogspot.com/-Pq9jSEq_tFE/XkJfk8hiL8I/AAAAAAAABkE/sZaEsTsdzLsrPBP6o2mkhNEza2CPSGLzgCLcBGAsYHQ/s1600/migartion.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1166" data-original-width="1600" height="233" src="https://1.bp.blogspot.com/-Pq9jSEq_tFE/XkJfk8hiL8I/AAAAAAAABkE/sZaEsTsdzLsrPBP6o2mkhNEza2CPSGLzgCLcBGAsYHQ/s320/migartion.jpg" width="320" /></a></div>
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<span style="font-family: Verdana, sans-serif;">Each organization is striving for next-level growth from its present status. The next level of growth could be</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">1. An exponential increase in Turnover</span><br />
<span style="font-family: Verdana, sans-serif;">2. Getting into new market/customer</span><br />
<span style="font-family: Verdana, sans-serif;">3. Getting into new product line/services</span><br />
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<span style="font-family: Verdana, sans-serif;"><b>Factors for next-level growth</b></span><br />
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<span style="color: blue; font-family: Verdana, sans-serif;"><i>Potential + Strategy + Leadership mindset + Practices = Next Level Growth</i></span><br />
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<span style="color: red; font-family: Verdana, sans-serif;"><u>Potential:</u></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">the potential is a measure of the market size for the product or service, the unique value proposition of the product or service to the customer and the evergoing demand for the product or service not only in the existing customer or in exiting demography, but scalable to new customers and demographics</span><br />
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<span style="font-family: Verdana, sans-serif;">In my opinion, all the business is highly potential, given the worldwide customer base unless the product/service is made obsolete through technology.</span><br />
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<span style="color: red; font-family: Verdana, sans-serif;"><u>Strategy:</u></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">A strategy is nothing but clarity on the resources, competency requirement, and action plan to get into next level growth. It is more about internal organizational capability development to cater to higher level growth. The action plan must answer the typical questions as below.</span><br />
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<span style="font-family: Verdana, sans-serif;">1. Resources required in terms of the fund, equipment, infrastructure, and people</span><br />
<span style="font-family: Verdana, sans-serif;">2. Plan to reach out to new customers/ developing new product or services</span><br />
<span style="font-family: Verdana, sans-serif;">3. Personal and organizational competency required to manage the challenges in the growth phase</span><br />
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<span style="color: red; font-family: Verdana, sans-serif;"><u>Leadership Mindset:</u></span><br />
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<span style="font-family: Verdana, sans-serif;">This aspect is one of the prerequisites for any organization that looks for next-level growth. Mainly, the business head or CEO's mindset is essential. When I refer to mentality, it is more about the aspiration and belief of the business head is vital. For example, in one of the client operations, the service they offer is scalable to the global level due to their quality and price point. However, the founder is not interested in going for international reach as he believed that his organization is capable of serving only the local market. Even though he is very passionate about his product and service, his contentedness and beliefs never allowed him to grow exponentially.</span><br />
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<span style="color: red; font-family: Verdana, sans-serif;"><u>Practices and Action:</u></span><br />
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<span style="font-family: Verdana, sans-serif;">Even though the organization is highly potential, aspiration, and strategy, if the methods and actions are not in line with the plan, the organization will never get into next level growth. While aspiring for next-level growth, the organization should learn to give up some of the legacy practices and to learn new practices.</span><br />
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<span style="font-family: Verdana, sans-serif;">To sum up, </span><br />
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<span style="font-family: Verdana, sans-serif;">when the leader is aspirational, believed in the potential of the product or service given the global market, if the organization draws the master plan and adapts itself to change to new practices and action, NEXT LEVEL growth is always possible one.</span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-4595588344899506742020-01-02T11:38:00.000+05:302020-01-02T11:54:45.471+05:30Three primary responsibilities of Business Head <div dir="ltr" style="text-align: left;" trbidi="on">
As a business head or CEO of your organization, literally, you are responsible for all activities and outcomes in your organization. However, when the organization is growing, you may delegate some of the activities and responsibilities to others and you may overview of those responsibilities.<br />
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some of the responsibilities you can not delegate fully to others and you must be the primary responsible person.<br />
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In my views, three primary responsibilities of the business head of any small, emerging organization are<br />
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1. Creating Performance-Oriented Culture<br />
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2. Maximizing the Profitability and make the organization future-fit or growth-oriented<br />
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3. Meeting all the Stakeholder's Expectation on time<br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-87735495809155823772019-11-14T10:31:00.001+05:302019-11-14T10:31:04.240+05:30Business Head's dilemma: Profit or Growth ?<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://1.bp.blogspot.com/-1YFBBBpWsh8/XczffNySGoI/AAAAAAAABgY/b7UrVJBJmJ8OJcuKdx_ptes2l_HrskSPwCLcBGAsYHQ/s1600/confusion.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1600" height="200" src="https://1.bp.blogspot.com/-1YFBBBpWsh8/XczffNySGoI/AAAAAAAABgY/b7UrVJBJmJ8OJcuKdx_ptes2l_HrskSPwCLcBGAsYHQ/s200/confusion.jpg" width="200" /></a></div>
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<span style="font-family: Verdana, sans-serif;">One of the dilemmas some of the small, emerging CEOs have is whether to focus more on profitability or looking for growth opportunities and scale up the business sales turnover.</span><br />
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<span style="font-family: Verdana, sans-serif;">The reason behind the dilemma is when the organization is small, most of the activities are directly monitored, executed by the business head and he/ she has direct control over profitability. They use to enjoy comfort. At the same time, there is an aspiration to grow big and also the fear of maintaining the same level of profitability and comfort. Because maintaining healthy profitability within a controlled environment is different from maintaining the same profitability when the organization is exposed to different customers, product lines, markets during the growth phase.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">In my view, the business head should aspire and balance both profitability and growth for both short term survival and long term sustainability of the business.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Profitability is a measure of your efficiency, effectiveness and the excess cash will give a strength to take the organization to the next level. Whereas Growth, even though it seems to change management in the initial time, is required to generate more cash reserve for sustaining the business. when you ensure the higher or same comfortable profitability in a growth stage, that will help you to grow further into a new orbit. That is cycle and that is the nature of personal and business growth.</span><br />
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<span style="font-family: Verdana, sans-serif;">Hence both profitability and growth is required. There is no guarantee that the existing comfort or profitability is sustainable if the business is not exploring growth options.</span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-67240909810883049342019-11-08T12:32:00.000+05:302019-11-08T14:30:09.581+05:30paradigm shift required on the role of operator in small, emerging organizations<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;">In some of the small, emerging organizations, operators who are working in machines or assembly lines are still perceived as Unskilled, and capability is restricted to loading and unloading of components. The other aspects of machine operators like quality checking, machine basic conditions monitoring, tool setting, and parameter monitoring or adjustment are taken by other teams like quality functions, programmers, setters, maintenance crew, and so on.</span><br />
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<span style="font-family: "verdana" , sans-serif;">Here, more than the operator's skill and development, the mindset of supervisors or shopfloor managers needs to be changed. They believe that if we ask more from the operator other than necessary loading and unloading activities, the operator will not do or leave the organization. </span><br />
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<span style="font-family: "verdana" , sans-serif;">The flipside of this scenario is the operator will soon lose interest in the job as he/she is not learning anything new other than loading/ unloading. For any human being, the inner desire is to learn and contribute and get recognized for the contribution.</span><br />
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<span style="font-family: "verdana" , sans-serif;">when the operator is not given an opportunity to learn more about quality, setting, and machine, he feels the lack of learning and looks for alternative or sometimes accept the situation as it is and becomes complacent.</span><br />
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<span style="font-family: "verdana" , sans-serif;">From an organization perspective, when we have many people responsible for ensuring quality of the product and process adherence, machine basic condition monitoring, the ownership is totally shifted to someone, and they are not fully accountable for the causes of poor quality or poor maintenance. And the cost of manpower also increases, and engagement to the product or process quality becomes low at the operator level. That becomes a waste for the organization.</span><br />
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<span style="font-family: "verdana" , sans-serif;">Since the operator is close to the job, he must be made accountable for OUTPUT, QUALITY AND BASIC HOUSEKEEPING OF THE SURROUNDINGS AND MACHINE. </span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">when we made this condition as a rule and develop the operator as one point source for improvement, this will enable the operators to learn the skill about quality and machine basic requirements monitoring, and the organization also benefits from waste elimination and reduction.</span><br />
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<span style="font-family: "verdana" , sans-serif;">The starting point is how the organization defining the roles and responsibilities of the operators and the change in the belief system that the operator is capable of developing the required skill if it is warranted.</span><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-49697673065634107282019-09-13T19:22:00.001+05:302019-09-13T20:03:35.796+05:30Cultivating winning culture in small, emerging organization<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="background-color: white; white-space: pre-wrap;"><span style="font-family: "verdana" , sans-serif;"><b style="font-size: 14px;"><span style="color: red;">Who is cultivating culture?</span></b><span style="color: rgba(0 , 0 , 0 , 0.9); font-size: 14px;">
</span>In one of my client organization, the CEO starts his monthly review meeting first by reviewing the employee engagement aspects like safety issues, employee participation levels, recognition, and then only he reviews other business deliverables. Over a period, "employees first" becomes the culture of the organization. The people under him also are giving first preference to employee engagement aspects.
Similarly, in another organization, the business head always keens at delivery performance irrespective of any factors. His team also oriented to the practice. Now the culture of the organization is to deliver target" somehow" irrespective of profitability, quality level, or process adherence.
Even in the home, if parents watch TV while eating, then the children also follow the same, then, over a period, it will become a culture of that family.
The point is that the person at influencing level cultivates the culture either good or bad, not the other way around as followers cultivate the culture.
Irrespective of title, you are the leader in your work or home. Influence positive, right things consistently, that will become a practice & culture.
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<span style="font-family: "verdana" , sans-serif;">In the personal front, what you do consistently becomes a habit. Similarly, in an organizational setup, what you do always becomes the culture.</span><br />
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<span style="font-family: "verdana" , sans-serif;">culture is nothing but how people behave, relate to your business challenges in the organization.</span><br />
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<span style="font-family: "verdana" , sans-serif;">It is the leadership team that is establishing the culture. When I say leadership team, not only CEO, senior-level managers, whoever is leading a team are leaders. When they demonstrate consistent behavior in some aspects, that will become the culture of the organization.</span><br />
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<span style="font-family: "verdana" , sans-serif;">For example, if the leader believes in data transparency in everyday interaction, then the team also start thinking in data collection, analysis, sharing, and taking decision based on the data.</span><br />
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<span style="font-family: "verdana" , sans-serif;">is it difficult to change the culture?</span><br />
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<span style="font-family: "verdana" , sans-serif;">At the outset, anything is difficult in life, but possible with conviction. That is applicable in organizational culture setting and change the culture as well !!</span></div>
Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-67199100292660466972019-09-13T19:04:00.001+05:302019-11-11T13:21:41.325+05:30Framework for bringing synergy among people in small, emerging organization<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;">When we complete 12 months transformation intervention with small, emerging organization, the foremost question asked by the business head is <span style="color: red;">" How can we sustain the improvements going forward?</span></span><br />
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<span style="font-family: "verdana" , sans-serif;">The answer lies in establishing the daily management process in the organization at each level viz CEO& Senior leadership level, Middle-level management team, and operating level. Once if we implemented the system across all levels and executed on a daily/weekly/monthly basis, it creates an opportunity to build the organization as agile and vibrant.</span><br />
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<span style="font-family: "verdana" , sans-serif;">also, it improves the engagement level of people with the organizational objectives, and this creates an opportunity for each individual to bring out the potential.</span><br />
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<b><u><span style="font-family: "verdana" , sans-serif;">Target / Agenda / KPI's</span></u></b><br />
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<span style="font-family: "verdana" , sans-serif;">In any level, what we measure, that gets focussed and get improved. We need performance metrics for individual/functions and the overall business as such. Measurement drives people behavior.</span><br />
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<b><u><span style="font-family: "verdana" , sans-serif;">Right People / Cross functional Team</span></u></b><br />
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We need to identify the right people and place them in the right position. That itself solves most of the organizational problem. sometimes to solve the business challenges, we need a cross-functional team</span><br />
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<b><u><span style="font-family: "verdana" , sans-serif;">Review forum / Communication </span></u></b><br />
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<span style="font-family: "verdana" , sans-serif;">We need to establish review forums to discuss the challenges. Status and facilitate the team towards the solution. Meeting or review forum is an excellent place to facilitate the solutions.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">also, we need to establish different communication process like Management information system/groups for sharing and updating the live information.</span><br />
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<i><span style="color: red; font-family: "verdana" , sans-serif;">when the organization sets the above process and does the cycle more frequently and effectively, the concerns on sustainability, people engagement, speed of response can be addressed.</span></i></div>
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0tag:blogger.com,1999:blog-6070566171446416677.post-53446453516533136902019-09-13T11:59:00.000+05:302019-09-13T12:04:00.316+05:30Business planning process for existing business in a small, emerging organizations<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://1.bp.blogspot.com/-TUzREA-VyEM/XXs3ospJ24I/AAAAAAAABc8/0Db6hpQ8QtYQb0jckHtlXLQDVOCG7KvWgCLcBGAsYHQ/s1600/A-B.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://1.bp.blogspot.com/-TUzREA-VyEM/XXs3ospJ24I/AAAAAAAABc8/0Db6hpQ8QtYQb0jckHtlXLQDVOCG7KvWgCLcBGAsYHQ/s400/A-B.jpg" width="400" /></a></div>
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<span style="font-family: "verdana" , sans-serif;">Most of the Small, Emerging firm's business head think that business plan is meant for banks/finance institution to get financial assistance when they start a new business or expanding the existing business.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Actually, in the existing business itself, the business plan needs to be done at least once in a year irrespective of expansion or new plant. This planning process drives your thought process to navigate future opportunities and challenges in a proactive manner.</span><br />
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<b><span style="color: red; font-family: "verdana" , sans-serif;">What is business planning or preparing a master plan is all about?</span></b><br />
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<span style="font-family: "verdana" , sans-serif;">1. Visualizing the future opportunities/threats</span><br />
<span style="font-family: "verdana" , sans-serif;">2. Anticipating the risk</span><br />
<span style="font-family: "verdana" , sans-serif;">3. Proposing counteractions</span><br />
<span style="font-family: "verdana" , sans-serif;">4. Preparing your organization for next-level growth</span><br />
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<span style="color: red; font-family: "verdana" , sans-serif;"><b>How to do business planning for your business?</b></span><br />
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<b><span style="font-family: "verdana" , sans-serif;">Inputs required for business plan</span></b><br />
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<li><span style="font-family: "verdana" , sans-serif;">Industry Trend / Changes in the business environment</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Volume forecasting/projection for the next 3 years</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Your organizational goal aspirations on profitability and growth </span></li>
<li><span style="font-family: "verdana" , sans-serif;">Customer segment or new customer's opportunity </span></li>
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<b><span style="font-family: "verdana" , sans-serif;">Planning areas</span></b><br />
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<a href="https://1.bp.blogspot.com/-zQ84HLZyKKs/XXsLW9xJHYI/AAAAAAAABcw/pMnxVHZfD8U3ET736AFFyPUscdCH74bgwCLcBGAsYHQ/s1600/Picture1.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: "verdana" , sans-serif;"><img border="0" data-original-height="1101" data-original-width="1398" height="252" src="https://1.bp.blogspot.com/-zQ84HLZyKKs/XXsLW9xJHYI/AAAAAAAABcw/pMnxVHZfD8U3ET736AFFyPUscdCH74bgwCLcBGAsYHQ/s320/Picture1.png" width="320" /></span></a></div>
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<b><span style="font-family: "verdana" , sans-serif;">Likely output from business planning Process</span></b><br />
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<li><span style="font-family: "verdana" , sans-serif;">Organization structure / Engagement initiatives</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Financial plan</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Organization development plan</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Initiatives on productivity/cost and quality aspects</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Product portfolio / business model / integration / diversity plan</span></li>
<li><span style="font-family: "verdana" , sans-serif;">Marketing initiatives</span></li>
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<i><u><span style="color: red; font-family: "verdana" , sans-serif;">This is a collective visualization and introspection process to make your organization to manage any uncertainties as well as to prepare your organization for future!</span></u></i><br />
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Ganesh Babuhttp://www.blogger.com/profile/16144749200985504464noreply@blogger.com0