Saturday, November 27, 2010

The hard side of addressing the soft issues

The hard task of addressing the soft issues

Everybody in the board loved Chandrasekhar. He carried himself with grace and was deeply human in the way he came across to people. He seemed unhurried despite his busy schedule and was always approachable. The CEO Ravichandran had assembled a team of great of experts who were quick to address technical challenges and redress customer complaints with remarkable ease. However, the workplace was very machine like and lacked any energy or enthusiasm. Where could he be going wrong? He valued the difficulty of keeping people motivated and was anxious not to allow the enthusiasm of the youthfully capable team to come down for any reason.

Chandrasehkar listened for a while.

He asked the CEO if he could be permitted to walk about all alone, unescorted by the senior managers, across the shop floor and the offices of the middle management? The CEO saw no reason to object and let it happen.

Chandrasekhar went about in his natural style shaking hands, meeting a cross section of the people enquiring them about their welfare and work. He apologized for dropping unannounced and took permission from people if it was all right for him to talk while they worked. In some cases, he waited until the operators and staff finished their work and got free to talk to them. He graciously accepted the insipid tea and soft biscuits that were offered to him and demonstrated enjoying it with great relish. After touring the workplace for almost three hours, he returned to the CEO’s room for lunch.

The CEO expected Chndrasekhar to say something about the mission he had undertaken in the morning but the discussion seemed to include everything but the topic that was far too dear to the CEO. That after noon Chandrasehkar asked for the services of the CEO’s secretary and dictated a brief note on his findings.

What junior employees wanted their senior to do:

  1. State expectations clearly: Bosses are often vague about what they want and often fore away instructions to juniors without telling them the significance of the task they are being asked to undertake.
  2. Be reasonable; do not expect miracles: Target are set so high that the seniors manage to raise the blood pressure and anxiety levels rather than the enthusiasm to exceed expectations.
  3. Give us decisions with the same speed you want to get results: Avoid creating interruptions to work by delaying decisions making them wait in suspense.
  4. Find the time to ask me how I am doing instead of pouncing on me in the last minute: Managers vanish from the scene indefinitely into meetings only to appear at the last minute and create excessive rework for them.
  5. Do not set me up to fail or knowingly let me down: Sometimes they wonder if the boss is really their friend and would like to see them succeed.
  6. Be honest: If yo do not trust me, say so: some of them believe their bosses merely suffer and tolerate them.
  7. Don’t lie; we are intelligent enough to make out: This is self explanatory and erodes trust completely.
  8. Shoot the messenger: “We are afraid to ‘bell the cat’ because we know we will be shouted at for brining, not creating, the bad news.”
  9. Micromanaging: Sometimes, the boss better leave us to ourselves and not be hanging around waiting anxiously for us to complete the work.

What the senior managers expected the junior employees to do:

  1. Inability to say “No”: Say ‘No’ if you mean NO. Don’t say ‘yes but’
  2. Anxiety to please at all costs: Why do they say yes to everybody creating a lot of confusion?
  3. Over commit and under deliver: Why be shy to admit what yo cannot instead of building an expectation and disappoint at a later stage.
  4. Admit ignorance upfront: No doubts are raised when the instruction is given; all problems come up only when they sit down to execute; why not do some anticipatory thinking?
  5. Withhold resources: Knowing full well they need resources, no one releases surplus and idling resources. People enjoy merely holding onto them.
  6. I don’t know: Please do not pass your half baked opinion freely n every subject.
  7. Allow problems to fester until it blows up: Let the boss find out culture has to go. Please should if there is ‘fire’
  8. Safely stay in the middle: don’t be a middle of the roader and forever feel shy about taking sides.
  9. Over communicate please, rather than holding back: If you do, err on the side of speaking more than not speaking at all.

When Ravichandran read it, he said, “This is fine; how do I implement it ?”

“Whenever bosses and juniors exhibit the right behavior, give them a chocolate. Count the number of wrappers at the end of each month to know how many of the positive behaviors they exhibited.

Measurements help change behavior.

Positive appreciation helps change happen faster.

It is easier to manage technology; the soft side of business is harder to walk on !”


Monday, November 22, 2010

What is our intellectual horse power?

What is our intellectual horse power?

“Do we hire people in this company to think at all?” asked Raghu Parthasarathy who had assumed charge as the Chief Knowledge Officer. Raghu had returned to India after spending over 20 years in the US. He holds several patents and helps companies develop the capacity of the people to innovate and enhance the intellectual capital base.

He was making his observations known to the CEO and the board on why he is compelled to ask that question. He revealed some interesting statistics:

Against the 2.5% of the turnover the company was spending in R&D, it was ‘importing’ knowledge and outsourcing thinking that costed the company nearly 30% of the revenue! In other words for every one rupee spent on commercializing new ideas, the company was spending 12 times that borrowing it from elsewhere. Therefore the company’s ability to think, that he termed ‘intellectual horsepower’ was at mere 8.33% If the company was content to encourage so little thinking and do much shopping for ideas from external sources, why at all hire top flight engineers and MBA’s from Ivy schools at exorbitant starting salaries?

He reeled off examples:

The human resource department does very little thinking or even doing. They outsource everything from climate surveys, Employee satisfaction surveys, recruitment and selection of senior and junior personnel, annual compensation benchmarking, skill assessment for all new positions and even 60% of the training. The cumulative financial load of all these outsourced activities was equivalent to one month’s wage bill for the entire company, 20 crores! The HR department had become a buying agent of HR services. This does not include payroll processing and the HRIS platform under automation.

Marketing itself does very little thinking related to their function. Everything from creative advertising, to consumer research, brand equity assessment needed to be audited, analyzed and reported for market share gain and loss; all these were offloaded on to third party suppliers. All that Marketing did was to arrange them make presentations to the CEO and settle their bills. They gave away almost 30 crores of business in the previous year and felt the spending should go up higher! When will they learn to do these works in house?

The Director of Communication had appointed specialized agencies to bring out the company brochure, design the balance sheet, edit and print he monthly newsletter, convene all promotional events including press meets and the maintenance of the company’s Intranet. That cost another 24 crores; down the drain.

Information processing department outsourced all their data entry work and the related analytics to a specialize agency that is supposedly statistically more literate then us. No single agency within the company was capable of generating any special reports or analysis of our own.

Raghu parthasarathy highlighted the need for the company to institute a policy that will make the ‘import of thinking ‘abilities far more stringent. He went on to categorize knowledge work into five:

  1. Internally developed proprietary know how: Ready made, tried and tested proven application
  2. In house research and analysis: Confidential and tightly managed development program
  3. Fully outsourced projects: Routine and cost effective to get done from the outside
  4. Off the shelf bought out solution: Import ideas if they are it can be developed faster and better buy
  5. Custom designed package development: What is needed to develop it in house?

The first and second should be actively encouraged.

The third and the fourth seriously debated.

The last one actively discouraged; it should either belong to the first two or the next two.

Else it will become prohibitively expensive to maintain and upgrade. .

Unless the estimated 80 crores on outsourced knowledge work is actively tracked and brought down, not only would the company be at a disadvantage, it will also affect the morale of the people who have to look up to outsiders for creative solutions. will that not be counter productive in the longer term?


Saturday, November 13, 2010

To trust or not to trust my deputies

To trust or not to trust my deputies

Coming from Singapore to take over the Indian operations, for Peter Chen gaining trust with people should be the least of the issues. Yet what he took most for granted turned out to be the most challenging for him. He had completed a few rounds of meeting all his deputies and was reasonably pleased with each of them, the spirit of professionalism they demonstrated and the self assured way they carried themselves about the office. It should be a professionally challenging and intellectually stimulating to grow a market that offered so much diversity at such a scale he could never have imagined Singapore to offer. However that was not to be.

Peter’s family could not relocate to India. So the board allowed Peter to be in India Monday through Friday and return to Singapore for weekends. One such weekend, he was surprised to run into one of his deputies in Singapore. He let it pass thinking that people are entitled to their privacy and made no effort to make any connection with her. A few weeks later he received a confidential call from one of his Board members asking Peter if he was aware of the concerned employee being away from the country, as was required by the company policy? She, Meenakshi Khatri had obviously not done so.

Peter approached one of his long time India based Director, Gopalan, and expressed his displeasure at employees not following company rules and setting a poor example of themselves to the rest of the staff. Gopalan thought for a while and suggested that he cannot go by hearsay. Peter must possess an irrevocable evidence; when confronted the employee concerned must have no choice but to realize and own up the default. If they are given an opportunity to explain, it will drag the organization into a loop that they cannot afford to create.

Gopalan knew of an ex Army officer who was reputed for carrying out confidentially checks on the conduct of a sample of the employees and table it to Peter for him to take action. When Peter called up Col Preetam Singh, the head of the surveillance agency, Preetam expressed happiness to undertake provided the company had an explicitly state policy note being put out to all employees on the need for them to observe the code of conduct and obtain their signature on it. As a first step, Peter should give the employees an opportunity to voluntarily disclose any anomalies either they are aware of or are currently engaged in. By getting them to disclose, Peter was fortifying his stand. Peter would be better off forming a sub committee of the board of Directors looking such cases of voluntary disclosure and making a recommendation for the board to approve of. By doing so, Peter would be above board and not get pulled into the political repercussions such decisions are bound to have.

Peter faithfully went by the advice of Col Preetam Singh. Two weeks later, he received a dossier, passed on to him by the subcommittee with their recommendation on the disclosures made by his closest deputies.

Sunil Shah, Manager-Transport and Logistics admitted taking a fee for allotting loads on a priority basis so that the transporters did not have to idle their trucks outside the factory gate. A faster turnaround time for trucks need a premium to be paid to him and his staff. In turn they would ensure that the transporter’s bills were passed with minimum of delays.

Bikash Kalra, Manager distribution accepted that he charged a premium whenever the products were shipped to dealers prior to a price increase. The differential between the new price charged to consumers and the old price at which the goods were shipped would be passed back for a consideration to Bikash.

Deepak Battacharya: The ad agency and printers were mandated to pad up the fees charged on their services in order to accommodate the princely life style maintained by Deepak.

Sunil Srivatsava’s popularity with the dealers stemmed from his arbitrary division of territories and induction of new dealerships for a consideration of course. He was always kept in good humor both ways; existing dealers rewarded him for not further fragmenting their territory while the new ones were fed the hope that their allotment was imminent any time.

Kishore Rajavanshi, made a cut on every real estate deal and government liaison, while Om Prakash Gupta, Head of Procurement and import licensing collected a fee for faster goods inwards and acceptance past the income QA. Raj Sekhar, the Head of HR ran his own private agency for testing candidates and intake of temporary and full time manpower. Meenakshi Khatri handled outbound tours for her ‘friends’,which explained her being spotted in Singapore.

Peter shook his head in disbelief not so much at the recommendations made by the subcommittee on how to deal with them. It was more to do with how naive he was in assuming his deputies to be above board and the image of themselves they revealed to him thorough such a disclosure.

Preetam computed the loss to the company to be of the order of 85 crores apart from the lost productivity, internal politics and a bad reputation for being a value compromising institution. Erosion of share holder value stared Peter in the face. Should he keep them or let go?


Friday, November 5, 2010

How to blend diverse management cultures

Kaz Petrosky was the head of sales. His ancestors came from the Urals in Russia but he is a naturalized US Citizen. He was on deputation to India and ran his sales team like the US Army. His team was disciplined and very sales focused. When they are given a target, they have to go after it like war had ben declared. It did not matter what it cost or who came in the way. You just went ahead until the victory was all yours. They were ethical in what they did but were mercenary like. They believed that rules were meant to be broken and relations bent at will to get the job done. They were all very focused, sure of their financial figures and up to date in the facts that mattered. Speed and surprise were the name of the game and the sold like it was an extreme adventure sport. They worked alike a great team, consulted each other, partied together and went about their work and life in a no nonsense and business like. Kaz was very proud of his team; he rewarded them well when they delivered the results. As long as they met their goals, Kaz was completely hands of and gave them full freedom.

Louis Camino, headed manufacturing. He was a quint essential European of Spanish origin. Very soft spoken and always well dress in his three piece suit, he was meticulous about meeting, reports, schedules and protocols. Every activity was planned well in advance and life happened like clock work, all on time per scheduled time. He was focused and time conscious; met people only by appointment and went about his work in an unhurried and purposeful way. He too hated surprises and relied upon methodical working, detailed documentation and maintained a factual historical record of everything as if someday he may be required to reexamine the history of how he functioned. The team in manufacturing adopted his work style.

Hitoshi Kobuse, is a quintessential Japanese. As the Head for customer Service,work is religion for him. Accordingly he cultivated a team oriented work culture where everybody was equal. He believed in keeping his team fully knowledgeable on all the products technically that required every one of them to attend training programs regularly, make intensive research and present proposals for simplifying work and generate savings. He rewarded people’s effort to publicly announce and track the incidence levels of problems and recognized their efforts at problem solving. He made hero’s out of anyone that recovered a lost or annoyed customer. He never behaved like a boss, he was a coach.

Ravindranath is a profit conscious and bottom line oriented Purchase manager. He was relentless in negotiating opportunities for waste avoidance and cost reduction. There was a popular joke in the office where a beggar took pity and donated his days collections of coins after meeting Ravindranath! He had cultivated a solid reputation for demanding justification for every paisa invested. His motto was: if you do not survive the short term, there is no long term. So, focus on managing profits at any cost; even if it meant overcommitment because people have short memories anyway.

The CEO was perplexed by the sheer contrast in the styles of the four key managers at work and wondered if he can get them to subscribe to a common work culture. We must value diversity, no doubt; but wonder what is may be costing the company?