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!

How much can i do?

One of the clarity, most of the small, emerging organizations CEO / Business head should have is " How much sales turnover I can make? 

From a long term perspective, with existing and new market potential, the answer could be that sales turnover is infinite. 

However, realistic clarity is that with given the facility, infrastructure, installed equipment, with existing resources like working capital and people, how much sales turnover I can make?

Why the business head need have clarity?

• The sales turnover potential with given facilities will give the potential to be tapped.
• The clarity will provide the gap in existing performance and potential sale turnover
• Helps to drive the team towards achieving the potential target with conviction

How does the business head estimate the potential?

Data collection and analysis on the following aspects will help you to arrive at your potential capacity. 

1. The capacity of  all machines based on cycle time and existing Utilisation & efficiency
2. Understanding the constraint machine and its capacity  
3. Exact working capital required for an existing volume 
4. Function-wise human resources details and capacity 

The data may vary depends on the product mix and cost structure. Hence, the CEO or Business head must periodically ask this question and needs to understand his real capacity and existing status!

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Shifting the focus from Product Quality to Process Quality

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

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

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

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

Need for organizationwide performance management system

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

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

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

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

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

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

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

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

Need for organisation structure role clarity in growing organization

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

when we say formal structural relationship, it involves 

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

Need for this structural in a growing organization

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

Let us discuss organization structure designing

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

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

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

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

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

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

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

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

Importance of Manpower Planning during Growth phase

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

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

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


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

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

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

1. Lack of forwarding thinking on manpower planning process:

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

2. Adhoc recruitment 

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

3. Non-checking on the cultural fit :

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


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

When Manpower planning has to be done for the organization?

Manpower planning is immensely required during the following scenario

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

Benefits of manpower planning 

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

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