McKinsey - Government designed for new times (Interesting Perspectives)

A very good compendium of ideas, views and thoughts by McKinsey.

To explore the approaches that governments around the world are taking to common problems, this anthology convenes political leaders and civil servants, economists and policy experts, generalists and specialists.

Are you concerned about your company's Online Reputation? If not, read on

A very interesting blog post spotlighting importance of Online Reputation Management (ORM) for companies of all sizes and shapes.

"You cannot control these exchange of views and what is being posted online (and legal recourse is not as simple as it sounds) and you cannot afford to be vitriolic"

Enterprise Resource Planning or Eagerly Reject the Proposal?

This article has been published in SME WORLD Oct 2012 issue.

A Discussion on ERP between “The Enthusiast”, “The Cynic” and “The Pragmatist”

I totally agree with the catch-line of Café Coffee Day. Indeed, a lot can happen over coffee. And especially around the coffee machines that adorn many offices which happen to be the location of confluence of ideas convergent or divergent. This is the actual place where people try to hard sell their ideas or vehemently condemn or discredit them. Unlike the board room or conference hall meetings where people are guarded and suave, armed with presentation files and supporting spreadsheets, case studies and mindless heaps of paper (which people often do not read), the cup of coffee in hand (and an occasional cigarette which I personally do not support) breaks lot of shackles and allows for free flow of views. Like it or not, much of the success of an initiative owes its origin to a handful of such informal discussion.

Let us see what a typical discussion would resemble between “The Enthusiast” (E), “The Cynic” (C) and “The Pragmatist” (P) on the matter of implementing ERP in the organization. 

E: I have read that it reduces redundancy and the sales pitch affirms the same. People will have less work.  

C: Yeah! And it means many of us will be handed the pink slip! And redundancy is a must. Why then do companies spend on backup devices and servers? (Thinks inwardly – if we do not spend longer hours in the office, how are we going to prove we are working “hardly”!)

P: If implemented correctly, I agree that it will reduce redundancy, free up resources and give people a fair amount of free time. But it can also mean that these same people can become more productive and take up newer challenges within the company.

E: And the system can compile data from multiple sources across functions; crunch the numbers to help in strong decision making for middle and top management.

P: Yes, but we will need to understand the implication of data across functions and configure the system accordingly to generate the consolidated view. It will not happen at the click of a button automatically. Though once done accurately, it can improve efficiency of decision making. And one can always fine tune it further.

C: If the system does everything then what is our need? The company can easily hire less educated, lower skilled people! This is absurd. It is we who do the number crunching and analysis not some computer.

P: Hold your horses! It is not as simple as you are trying to make it sound. The system will be able to do a much more veritable and meticulous analysis at a much faster pace. But that does not mean it will be able to decide for us. The use and comprehension of implication of the analysis will finally depend on us.

E: ERP is very transparent. It will break all information silos by making functions talk to each other and exchange data as well as link them logically. The ERP application sales presentation stated that systems like procurement, planning and production, sales order processing, finance and accounts will be interconnected and present a seamless view of information flow.

C: My dear friend, in companies, information is power. You do not empower everyone with the same kind of information. It will simply make the office environment competitive and vicious. Not to mention, people will start meddling and asking questions about things they have no knowledge or idea. That’s why we have hierarchy and chain of command. This linking business! Do you think it will stop here? They will decide to link all customers and buyers.

E: Yes it is called supply chain management. Suppliers will get to know what we want when we want and how much we want without us telling them. Inventory levels will go down and our store space will be optimally used.

P: Maybe some of the space can be re-allocated for some other useful purpose. Resource optimization is the need of the day.

C: Like it or not we all need some leeway for mistakes and shift the blame. In this “connected” scenario there will be too much transparency which can be disadvantageous.

P: Furthermore, transparency is not loss of power. It is how you empower people to become alert and responsible. Questioning is not always negative. Flow of information will help reduce waste, optimize inventory by ordering and stocking just the right item in appropriate quantity and improve the bottom-line. Sales and Accounts will be able to monitor accounts receivables and control outstanding and overdues. Lending organizations all look out for these factors. It is in the long term interest of the company and us.   

C: (Internally trying to pick holes in the logic and counter it while sipping his coffee)

P: Try to view from the owner or management’s perspective. There purpose of adopting technology is not to make people redundant and to sack them but use the same resources for company’s growth and expansion through new projects and diversification. To increase per unit resource yield therefore reducing cost. There are two aspects to this growth plan. One is money. New projects cost money. Money comes from banks. Banks lend to companies that can establish and demonstrate their credibility. Prove their control, good governance and compliance. The other aspect is employees’ growth. New projects will be bringing new responsibilities, new challenges and a brand new learning curve to ascent.

C: We work for years to learn how to perform well and now you are advocating rocking our boat and to move out of our comfort zone. Start afresh. No Sir! Thank you. I am contented the way I am and where I am. Anyway with new projects etc., the management will be filling their coffer and not drastically improve my bank balance. And not to mention, will have to learn operating these new age applications. I left school twenty years ago. Who wants to learn again! It might add to my skills and sharpen my resume, make me more employable and open avenues but have I asked for it? No! It will simply change our lives (for better maybe but that is not the point!) There will be change. And change is never good. It is unsettling, scary and breaks the routine. It makes situations unpredictable. Business is about regimen and discipline. Quality comes from consistency.

E: There are some other benefits of ERP that cannot be negated. Paper work will reduce as most transactions become electronic. It will reduce overheads and we can become more cost competitive. Cheaper price can get us more orders, means more work. The filing cabinets can be easily replaced apart from the necessary ones as required for statutory compliance. All notebooks and registers get replaced by smart workstations and can also be operated using laptops, tablets and smartphones while on the move. It is said that much of the architecture of ERP applications is such that we can operate through lean desktops. The entire data is stored in centralized servers which have strong backup policies and systems aiming for near 100% uptime and availability.

P: Yes this is a good part of the application. Though I must add that management will get a complete view of the company’s operations sitting from anywhere. There will be swift dissemination of information and higher accountability. They will know who is actually performing and who is not. Wherever there is a bottleneck will be fixed with more resources or technology. The company will become agile and proactive which is always good for us.

C: (Becomes quiet and contemplates the repercussions. How will I shift the blame of inefficiency to a slow PC, virus infection or hard disk crashing! And it is all login based. Anyone can work from anywhere. And what happens to my beloved desk if we are expected to work from anywhere? Also if our offices do not adorn cabinets full of files will it not look like we are useless and not working at all? Clean office and tables with only a computer or laptop to complete all tasks means we are petty clerks and not big shot managers???? Whom will I complain to about hardship?)

P: Whatever said and done. The most important thing which we are not acknowledging is that everything will follow a system and procedure. There will be order instead of chaos and screaming. Company will know how much resources are truly required and when. There will be internal checks and set points to help check deviations and errors. It will become compliant with all regulatory and statutory requirements automatically provided the initial configuration of the application is done properly. Eventually, company will grow, there will be more people, opportunity for more personal growth, bigger teams to manage, newer ideas to implement and there will be vitality and enthusiasm.

E: It is going to be a game-changer. Mark my words!

P: As much as simplified it looks, ERP implementation will not be a cake walk. Decision to implement will be just the first step. The world of ERP has a long list of examples of failure and cost overruns. With all the positives and the negatives, only time will tell how well we have managed to map our business processes and identified the parameters and defined the performance scale

C: (Smiles a cynical smile) You people are getting too carried away with this ERP phenomenon. Trust me, finally the pen and paper, register and files are going to be around. It sounds very futuristic that we will work only on computers, paper-less office, work from anywhere etc. Changing people is not easy. Not many will be ready to embrace this new idea. Reality is different. There will be stock-out situation and chaos. There will be many rounds of long elaborate meetings required to solve the problems though people will be coming with consistent reports unlike earlier when different people had different data with no clue of the real situation. There will be goof-ups and squabbles. And yes, there will the quintessential blame game that is integral part of companies. That is the spice of life. (Thinks silently - I am pretty sure this ERP initiative will die a natural death. No one believes me when I say that this thing is evil. How will we spend longer hours in office proving I am working “hardly” to get a good appraisal!

E: Well I got to go. Have to finish a presentation. Let us grab some coffee after some time. (This ERP is coming for sure)

P: Yes see you around. (I hope the management knows what they are getting into with this whole ERP thing. But if it comes, it is going to be a good learning experience)

C: Okay! (I am sure this ERP thing is not coming. Or is it? Nah! What if? It will be a disaster. But what do the others think? Maybe I need to gauge the view of others. I am pretty sure most of the people feel the way I do.)

What do you think happened in the company? Did they go ahead with the implementation? Wait till the next coffee break. 

Author of “Going Soft is the New Normal” available on Amazon - (http://www.amazon.com/dp/B008IUL81O)

Once a Day!

This article has been published in the Oct 2012 issue of TISA.

Einstein said – Insanity is doing the same thing again and again and expecting different results. 

Developing a Habit

Excellence in anything is never God sent or inherited. It is the outcome of will, humility, sheer hard-work and perseverance. But working hard aimlessly and expecting results is also inappropriate. What we need to do is evolve everyday of our lives. We have to add something extra in our repertoire and push our boundaries. We have to constantly try to do better. This holds true for every human being working in any capacity. Patanjali Yoga Sutra stresses on two specific vikshepas (disruption) – inability to progress and instability in maintaining progress.

How do surgeons become talented? How do actors become brilliant? How do musicians become versatile and magnificent? They practice every single day. Initially, they do the routine stuff and focus on correctness. Soon they start doing it correctly but in shorter duration. Then they focus on developing their own technique, doing it in shorter duration with minimized steps. At the next level, they take up bigger challenges and try to master them. In all this, they never lose focus of the basics, but they never do the same thing in the same way forever.   

This is the crux of business growth and sustainability too. Businesses of all sizes either survive or die because of these reasons. What is in the external locus of our control; we cannot do much about it. But what is within our means, we must endeavor to do and do it every single day without fail. That is how we form a habit; to excel in everything that we do however small or big.

What you should do habitually?

There are six areas business owners should try to scrutinize every day to create business excellence.

1.      Employees – Who are your employees? What are their aspirations? Do you know each one of them by first name? What work do they actually do? How long have they been working for you? What do you know about their families? What are their needs? How can you help them to help themselves? How strong are the communication channels in your organization?

We all have a need for belongingness. It matters more than money. People do not accept this fact outright but they often tend to work in the same place if they find acceptance, space to grow and a feeling of family in the organization.

The employees are the ones each of whom generate small results which have huge compounding effect on the overall business performance. A business never grows because of one single employee but due to the combined efforts of all of them however big or small their task and responsibilities may be.

Apple is not great because of Steve Jobs. He was the face that was seen in the media. They owe their success even to each of the workers in the Chinese factories where their products are being made.

Rome was not built in a day; it was also not built by one person.

2.      Customer – Your customer is a company but you deal with a “person” who is giving you business on behalf of the customer. You need to know your customer – the company; you need to know the decision maker and influences – the key employees of your customers. At a superficial level, you must know who is making the purchase decision but as you go deeper, you must know who is the end user of the product (the production department), and anyone else who influences in the product choice and decision making.

What does the customer think of your product or service? What are their informal suggestions for improvement? What else are they observing with your competitors which you can try to serve? What are the company’s prospects? What are they planning to do to reach the next level of growth? Who are their key customers? What are they looking for in your customer’s product part of which is delivered by you?

It might sound unrealistic but people love to talk. Prodded in the right way you might gather lot of business intelligence which will help you in improving your own strategies. Including your customers in your business decision making is not intrusion but empowerment.

The closer your ears are to the ground, the better will be your choices and decisions.

3.      Financial Position – How stringent and compliant are your accounting procedures and financial reports? How transparent are they? Do you get your actual business position on a day to day basis? What are your costs? How can you bring it down? How competitive is your pricing strategy? How can you provide more value at the same price? Where can you cut down on waste? In today’s world of technology, it is absolutely possible to see your company performance each day.

Business is all about dynamics. And the environment evolves each moment. While you are sleeping some other market is in action. There are changes occurring which may impact your business. You can no longer depend on the balance sheet at the end of the financial year to plan for the future.

You have to be agile. You have to be proactive. You must know where your business stands at the end of the day. And it is not a difficult or cumbersome task to check your financial position. The faster you see the red flags, the faster you handle them and move forward. That is the difference between sickness and health. Your hand should always feel the pulse.

4.      Market Trend – You might have been a pioneer in your business idea. You may have the best systems and product features but somewhere in the world someone is working at this moment to step up the competition, to render your offering obsolete. Are you aware of it? What are the international trends in your business? (Do not give the excuses like – how can we implement it? It is too costly or cumbersome? We do not have a need for such features in our country) Ponder on how you can implement them in your offering. How you can explain the benefits (and the added cost) to your customers? They have to see value in what you are offering. Try and understand why a particular feature has been included in the product elsewhere in the world.

What related innovations and changes are happening in the market currently unrelated to your product? Mobile phones with cameras ate into the digital camera market. Multi-featured printers with scanner and copier are preferred in home and small business. Photo printing became less desired with increase in digital photo frames and small storage devices. Changes are happening everywhere and some unrelated change might just wipe off your business. Keep your eyes and mind open. Read, discuss and ponder.

5.      Networking – You must have a veritable network of friends, well-wishers, experts and people in general when you are in any business. You need to know the policeman, the traffic person, the courier guy, the postman, the clerk in the government office. These are few examples. The list is unending. You need to know them well enough to approach them (only in case of dire need) but meanwhile you need to cultivate relationships and keep watering them.

Ellen Kullman, CEO of Dupont was quoted in a McKinsey interview (Sep 2012) titled “Leading in the 21^st century” – “If you don’t water it, it is going to die”. Watering for Ellen is investing today for growth tomorrow.

There is a concept of six-degrees of separation of Frigyes Karinthy. Loosely explained it means that for every person you know well, he/ she will know someone within six steps directly or indirectly who might be of value to you.

6.      Introspect – In life and in business, one thing we should never forget is to think where we are and where we want to be. Are we in line with our goals or drifting away? If we are drifting what is the cause? Address it NOW! If we are in line with our goals then are we going at the required pace or slower? Why? What can we do to improve it?

Which area of the self or business needs improvement? Why? What needs to be done? How will it help in the long run?

Introspection helps in stronger strategies and strengthens the vision. It helps us analyze our current performance and stand. It points towards the path for improvement. It is the lighthouse and compass in our minds which gives direction. 

Habit is habit and not to be flung out of the window by any man, but coaxed downstairs a step at a time. ~ Mark Twain

Follow Through

As a business owner, accept the fact that you are not meant to do mundane things. You have employees and technology to do the routine, repetitive functions and with greater efficiency. Yes, you have done the basics at the inception of your business but do you intend to remain stunted or you wish to grow bigger?

Don’t you brush, bathe and wear clothes each day? It is not a daunting task to do the six things each day. Doing it piece by piece you will be able to form a pattern and system which will help you accomplish all this everyday and in a reasonable time.

If you are not monitoring and keeping yourself abreast with all these then what are you doing everyday that is of value to yourself or the business? What are you doing that can be done only by you and no one else? The businesses which have made it big are the ones where the top management started focusing on macro issues instead of micromanaging things like reviewing purchase orders, making invoices, procuring raw material, and taking inventory.

End of the day you must honestly feel you have made some progress, you have learnt something new that will help you advance yourself and your business, you have done what you had to do and you know what you should be doing the next day and in future.

We are what we repeatedly do. Excellence, then, is not an act, but a habit. ~ Aristotle

Author of “Going Soft is the New Normal” available on Amazon - (http://www.amazon.com/dp/B008IUL81O)