Importance of daily routine management towards sustainable performance

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

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

Some of the myths of daily routine management:

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

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

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

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

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

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

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

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

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

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

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

Benefits of daily routine management across all levels

1.Improves certainty and communication among team members

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

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

4. More importantly, it improves personal efficiency and effectiveness

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

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

How to select the right candidate for your organization?

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

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

Typical mistakes the business head do during the selection process?

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

Impact of the poor selection process:

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

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

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

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

Solutions approach to improving the selection process:

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

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

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

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

During Interviewing the candidate:

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

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

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

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

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

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

Relevance of Target setting & Review forums on accelerating business performance

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

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

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

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

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

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

• Productivity
• Quality
• Cost 
• Delivery
• People engagement

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

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

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

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

Benefits of Setting Business Targets (KPI's)

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

Review forums :

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

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

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

Benefits of Review forums:

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

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

How does Project Management apply to New Product development?

As discussed in Typical problems in new product development in a manufacturing environment, we have observed some patterns of challenges. Project management is all about the application of different management knowledge, skill, tools, and techniques in each phase of the projects.

Hence, the following principles of project management can be applied in new product development also.

Some of the principles are given below

1. Starting the project with END GOAL in mind
2. Involving all stakeholders at an early stage
3. Define project scope with a set of key performance indicators
4. Tracking Key Performance Indicators throughout the project phase
5. Defining the phases or steps in the project 
6. Proactive risk assessment and mitigation plan
7. Review and communication process
8. Active Change Management Practices
9. Engaging people with team/leader structure

Those principles can be applied in new product development as well.

Typical Problems in New Product Development in SME's

Typically, new product development starts the moment's customer asks for a new product or giving intend for new products to the organization delivers the physical product to the customer .We can call it as C to C

In between the intent of physical delivery, a lot of issues or challenges the organization is facing. 

Given below some of the typical issues or challenges 

1.Not fully aware of the customer's requirement

2.No sign off of idea/concept between customer and organization leads to  frequent changes in the idea/concept of the product itself

3. Not identifying and involving all the key stakeholders at the beginning of the project may lead to changes at a later stage, in turn, affect the timeline/ cost and deliverables (Quality Requirements)

4. Not spending enough  on planning  product development process leads to time delay and cost overrun

5.No structured management reviews on risk assessment and mitigation of risks lead to delay in decision making, Q issues, cost overrun and time delay.

6.No structured tracking systems for  change management and in the absence of change management, any delay or cost overrun or quality issues in the new product development would be taken at a personal level and blame of others

7.No systematic planning on facilities like fixture/ gauges/material handling/toolings leads to delay and quality issues in the product.

8.NPD trials and proto building take the second priority in the organization next to day to day deliveries lead to delay and personal friction among the people on sharing the organizational resources.

when you observe those above challenges, you can find a pattern of challenges.

That is lack of target, people integration, lack of process on communication, resource planning, risk assessment, review forums and so on. To overcome those pattern of challenges only, PROJECT MANAGEMENT comes a holistic solution in the new product development process!

How do you measure organizational maturity in terms of problem solving competency?

One of the differentiators between the organization is people and their problem-solving competency inside the organization. Developing the organization towards performance culture or problem-solving orientation is the biggest challenge for the business head and also the responsibility of the business head.

Unlike, capacity enhancement or technology upgrade, bringing the culture of problem-solving will not happen overnight as this calls for systematic, consistent people development and creating an environment inside the organization.

Any organization can be measured by maturity level regarding problem-solving competency using the below framework.

Level 0: No data availability
Level 1: Availability of data
Level 2: No structured Analysis
Level 3: Gaining Insight from Analysis
Level 4: Converging  into solutions approach
Level 5: Implementation focus
Level 6: Track performance through metrics

Relook at your organization' problem-solving competency based on the above maturity framework. Be aware of your current status and actions required to move to the next level!

Key Drivers of your Business

As a business head, you may be spending your time, effort and energy in many activities of your business. The more you effectively spend your time in critical elements, more your business prospects.

You need to understand the fundamental of your business drivers and your awareness about those drivers and the depth of your management on those drivers will bring profitability and growth.

Key drivers of your business:

Employee:

As one of the appreciating assets in any organization is PEOPLE. However, one of the challenging area for most of the business head is managing people.

It involves 

Manpower Planning for existing and future 

Attracting Right People 

Engaging towards organizational goal and culture

Providing Growth opportunities and learning

When you are not spending your time on this "People" factor, it costs the organization regarding losing skill, high attrition, loss in delivery, quality and so on. 

From our experience with small, emerging organizations, most of the chronic problems in the organization are due to "non-availability of right people in the right positions."

Profit :

One of the critical aspect for sustaining any business for a long term is " Profitability."Only when the business generates a decent profit, the business can survive and look for growth opportunities. As a business head, you must know how the business does generate profits and the factors contributing to or affecting the profitability of the business.

To know the causes or sources of profitability, you must be aware and have depth understanding of the following factors

1. Understanding your value chain or cost stack up in your products

2. Your pricing methodology and relevance with reality

3. Product portfolio and margin in each segment

4. Buiding cost consciousness culture in the organization

5. Your sensitive analysis on volume and variety or product portfolio mix

Cashflow :

As we have observed in some organizations with high profitability, the organization struggles to meet the working capital requirements, and the business head spends most of the time in managing the cash flow issues. The reason is lack of understanding on the aspects of from where / when / how much money comes in where/ when/ how much money goes out from the business.

Business head needs to know the fundamentals of money flows irrespective of his background, financial illiteracy. He must know to balance the payables and receivables so that the business can run smoothly.

Growth :

Growth is essential to sustain and increase the profit. Beyond some point of effectiveness, increasing the profit is difficult. If a business wants to generate more profit, then one of the ways is looking for growth in business topline revenue.

This growth is possible in multiple ways as follows

1. Increasing share of business or volume from existing customer base or product lines

2. Expanding into new product lines  from existing customers

3. Expanding to new customers or new demographic locations

However, managing growth phase is more challenging rather than running the existing operations with effectiveness. It calls for the marketing effort, new product development capabilities, competency building inside the organization to cope with growth challanges regarding technology, infrastructure, maangement process or practices, people, and capital.

careful planning and execution is required to migrate the organization towards next level grwoth.

Operational effectiveness & Flexibility:

To ensure profitability and sustained growth, internal operational effectiveness has to be maximized.

When we say effectiveness, it is all about Equipment / Asset Utilization, People efficiency, development and product quality.

As operational effectiveness has a direct bearing on the profitability and flexibility to the customer's requirment, your time and drives the organization towards " Lean way of working " as a culture is critical. One of the differentiator among the competitors is your organizational culture on continuously improving your operational effectiveness.

Customer:

A customer is a center point of focus for any organization. The existence of a business is only due to the presence of market and customer to buy from your organizations.

You need to understand the real reason for the customer to come repetitively to you for doing business. The reason could be

your price

your attitude

your delivery flexibility

your locational advantage

your attitude and approach towards them

your service quality 

once if you understand the real reason of your customer comes to you , you need to think interms of 

1. sustaining those factors and its feasibility

2. leveraging those factors and sustain it

Maintaince of quality relationship with customers will help you on a long term.

To sum up, 

the above factors are key drivers of your business, and how much time you spend on nurturing those factors determine your business sustainability and growth on a long-term basis!