Presupposition for Business and Leadership

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.

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.

No individual is important than the organization

         Separate family relationship and business accountability

         Set the policies or processes whenever there is ambiguity

         Leaders should do what he expects from others. People are watching.
 
      Treat all the stakeholders equally

        All the business at the end of the day is to serve the customers and make money. So, No business is special.

       Being the Leader is a privilege. Leverage it for serving.

     Irrespective of your age, designation, and authority, in your given area, you are the leader. Feel the responsibility.

Pl add if anything else

Business Head's dilemma: Profit or Growth ?

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.

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.

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.

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.

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.

How do you look at your people?

One of the concerns, most of the small, emerging organization  CEO or business head is " high level of attritions."

When we go in-depth of an attrition analysis, we may realize that people are leaving the organization in a short period of joining, say within a year. 

There could be many reasons for high attrition rate like compensation not matching with individual's expectation /potential, growth opportunities in the external world; people are not liking the work culture, safety, lack of learning opportunity. Those are the reasons for the employee or from an individual/employee point of view.

From the management point of view, I can attribute the reason for high attrition is the top leadership's mindset towards PEOPLE.

As a business head or leadership team, how do you look at your people?

Are you looking at them as a commodity or an asset? 

That perspective makes much difference in the way you conduct your business and treat the people.

If you look at the  People as a commodity:

• Your belief will be "there are many more talents in the market."
• If " x " is not there, I will take " Y." 
• You treat people cost as expenses and You do not show interest in developing
• You are reluctant to create a learning environment for people as you think  as expenses

If you look at the people as an asset:

• Your belief will be whoever is working for you is an asset to the organization
• You will look at each one's strength and look for leveraging and start developing further.
• People get respect for their uniqueness.
• You will build the organizational environment for learning where people will get recognized for taking the risk and delivering results. 

The point is "High-level attrition within short duration" is fundamentally the outcome of how people are treated or respected inside the organization for their uniqueness, effort, learning, risk-taking. If many individuals feel there is a scarcity of respect and the internal environment is conducive for basic survival and growth, then they find an alternative.

Business head or leadership responsibility is to ensure the conducive environment, and the intention of creating a climate comes from the belief and how you look at the people.

Hence, change your perspective on how you are looking at people, either a commodity or an asset!

My new book " Maximizing Profitability in Small, Emerging Organization" - a holistic approach

Exclusively for Business Heads

Click the link for PREVIEW

Challanges & Solutions approach to improve synergy among directors or partners

Except for a few organizations, most of the manufacturing organizations are managed by founders supported by other co-founders or directors. The  directors can be family members, friends or joined in the organization as working partners either due to a common interest in the business or some other value proposition. 

Generally, the partnership management provides more advantages than running as individual ownership. However, if the partnership is not governed by clear policies, terms, it will result in chaos, affect the business as well as affect the relationship among the partners.

some of the typical challenges in a partnership firm among the directors or partners

1. Clarity on sharing responsibility and accountability
2. Communication issues  

Above challenges lead to decision dilemma or delay in decision making which affects the business profitability and growth.

1. Clarity on sharing responsibility and accountability :

One of the common practices, we are seeing in most of the emerging organization is that all the directors involved in all management activities. In this process, end of the day, nobody is accountable for the business results as each one aware of the proceedings and get convinced about mediocre performance. Also, as everyone is involved in a particular business issue, the biggest dilemma arises as who has to take a final call or decision on the problem. People love to discuss the problem, challenges, ready to brainstorm and when coming to accountability on result or consequence, stuck on mainly on the decision making.

When we see this pattern in one of our client's operations, we had advised having a clear portfolio for each director by defining roles and responsibilities. (But, already they have a designation for each director with functional orientation !!) Also, we had set the KPI for each one to bring the accountability on the results.

This had resulted in clarity among the directors and they felt their personal productivity also increased. Also when coming to business decision making, the clarity on responsibility and accountability helped them to take quick decisions which affecting their function as well as the business.

2.Communication issues :

one of the reason for everyone to get involved in all activities is due to lack of structured communication process among the directors. Each one of the them wanted to be included in all activities with the intention to avoid communication problem or relationship issues among them.But this leads to only time consumption and delay in decision making. 

Also, the organization instills mediocre performance culture and in some organizations, people at middle management take advantage of the multiple director's management styles.

when we come across in one of the client , we suggested two methods to overcome communication issues

1. Weekly Review Forum for all directors to share, review weekly key performance like sales , financce and other important business issues
2. Common KPI sharing among the directors on Google share 
3. Monthly Executive meeting to review P&L before 10th of every month 

The above solutions approach helped the partnership organization to overcome the typical challenges faced by the partners and also helped them with personal productivity !!

My thought process on initiating lean manufacturing in small and emerging organizations

         Lean is achieving “more with less.” That is, making more production with

given resources or increased efficiency or achieving with less cost.

      Lean manufacturing system can be understood by relating to a human body. If the person is lean means general understanding is that he is free from unnecessary FAT in his body, hence free from unnecessary side effects like BP, Pain in joints, laziness, and the person is perceived as healthy, more flexible, and active.The same way if the organization is lean means, it is free from unnecessary fats like high inventory, high rejection, high breakdowns or line stoppages factors, etc  which leads to more flexible in delivery, less lead time , low cost of manufacturing and free flow of communication ( This is the way I introduce lean to new forums in my consulting workshop).Hence making the organization ( across all functions), extended supply chain system, any functional units (like machining, assembly, painting) need to be lean for increased efficiency, low cost, quality at first time and reduced lead time.

Lean is not a tool for cost reduction or cutting manpower or increasing efficiency alone, it is a culture building process or way of thinking and running a day to day business activities.When the lean is understood only as an application of tools like 5S, SMED, Visual management, poke yoke, it results in short-term impact in a particular cell or unit on a short time basis. It becomes difficult to sustain. Most of the organizations are keen on learning the tool and applying without understanding the big picture of linking with business objectives or culture building process.

Any lean initiative must start from CEO or head of the organization and more importantly, it has to be linked to the business need or goal.Moreover, lean should not be driven as separate initiative without linking with the business / functional objectives.When we drive as a separate initiative under one lean champion, lean efforts will be continuing as long as the champion is intense and driving as long as the entire team is undergoing a lean period in production or sales. Once demand /volumes pick up, the lean initiative takes back seat as it is perceived as EXTRA work for the organization.That is the reasons a few organizations are not taking the lean-to next level from grand inauguration ceremony and except few improvements on housekeeping and visual systems. 

In my consulting role, I am insisting lean implementation when there is full conviction from CEO, and there is a compelling need for driving efficiency, improving the bottlenecks for business growth and management agrees to work with us minimum six months to 2 years.
In some organizations, we failed to bring the momentum when the leadership team looks at lean initiatives as a quick remedy for their inherent problems.

To summarise, key ingredients I used in all lean initiatives are

1. Form cross-functional team
2. Involve CEO in reviews
3. Develop Business / Functional KPI's which are important for business / CEO to drive
4. Educate the team to see the waste in the system through VSM workshop or interviewing process
5. Make priority list along with the team to focus on waste elimination
6. For the identified waste, apply suitable lean tools starting from housekeeping (2S), Visual management, SMED, Best Maintenance practices, Daily work management like tracking hourly, daily output/quality issue tracking and reporting
7. Create forums for review meetings with operating team, cross-functional meeting among heads and weekly review meeting with CEO or business head
8. Review, Update KPI and tracking 

Becoming a lean organization is not a one-time event, it is a continuous journey.