The
sudden death of Tata Motors Managing Director Karl Slym was in the news on Jan
27th 2014. He died on 26th Jan in a Bangkok hotel while
attending some work engagement. Immediately the papers started reporting who
will be taking over at least for the short term. However, there were some
statements of leadership gap, vacuum etc.
Imagine
what will be the plight of a MSME if they incur such a sudden loss! Forget
death, what if the owner is suffering from a debilitating illness and is
bed-ridden or one fine morning some key person resigns and quits. It might
sound horrible but disaster does strike and problems come unannounced. The
impact is horrendous in certain cases.
I
met a person few days’ back who quit his erstwhile company and now the company
is cutting down production and shedding human resource since they are unable to
manage.
Companies
like Tata have layers of management staff and professionals. They can easily
shift people laterally to fill up a vacuum to tackle any crisis. They also have
a well-thought of succession plan. Thus, there is not much dearth of talent and
people rise to the call in such occasions. But the most important feature of
these companies is the way it functions on a daily basis. They are completely
system – driven. Of course some decisions and deliberations are dependent on
human intervention but the assembly line and production will continue like any
other day.
Slym’s death again brings back the focus on the routine
topic of making system-driven organizations. The case is strongest for SMEs.
They must have a strong operating system because they do not have large number
of people working at various levels and there is no redundancy of responsibilities
or skills.
No one is indispensable, but in SMEs . . .
Though
we often say no one is indispensable but in small businesses the case is
different. Here a single person often multitasks and handles disparate
activities too. Due to the lack of a well-defined system and proper training,
lot of work is done haphazardly. Information is stored in bits and pieces often
on scrap of paper lying on our table while having a telephonic conversation. A
buyer might just call up and change the dimension of an item. The person
receiving the call in all probability will forget to communicate it to
production and the wrong item will be delivered.
There
are extreme issues in small businesses like information is jumbled into a
single file or too many files are made with no clue of the purpose of each.
Sometimes any person handling the function as stop gap starts making his/ her
own filing system.
Computer
system is another black hole. Files are saved randomly with no regard of
version, content, obsolescence etc. If a computer crashes, no one knows what
data has been lost until the need arises.
At
times it seems like small businesses thrive in chaos. Fact is they have poor
efficiency and suffer huge loss of productivity.
What should we do?
Start
building your small business with proper systems and processes. Use the right
tools and methods to overcome such catastrophe. They create adequate support
for people to function efficiently. For
example: Order Management is a system.
You
get an order, manufacture the item and ship it. There is an input, process and
output. Process is how you make the system work. How will the order be
received, who will receive it, where will it be stored, who will process it,
when, how, how will the packing be done, who will ship it, who will confirm
that the shipment has been completed and all statutory information is correct.
Who will inform the customer about the completion of the order? Who will manage
customer queries and how?
A
detailed process for any system is the golden key for efficiency.
Have a look at the Total Integrated Baldrige Excellence System Framework.
It is a good model for developing your company’s operating system. It will give
an idea on which areas need to be focused on and standardized. How will you
manage your customers and employees? How will you plan for the future and
expand the knowledge that you have gained? How will you create the Leadership
pipeline? How will you get work done in your business everyday without fail?
Start with the basics. Identify the functions. Establish systems. Define
process and workflow on paper. Create formats and fonts for data collection,
communication and reporting.
Go to each and every work area regularly and see how things are done. It
will give you an idea to define systems. Routinely audit your systems to
improve and check deviation. As Deming suggested – Plan – Do – Check – Act.
Deliberate
Any business has common functions like order, procurement,
production, planning, IT, materials and distribution. If you are able to create
the right operating system for each function and develop strong processes, your
business will remain resilient and prepared to face distractions, anomalies,
calamities.
Benjamin Franklin said – “By failing to prepare, you are preparing
to fail.”
