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5 Business Process Lessons From The Oscars Goof-Up

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I had written sometime back that 2016 was a year of the unexpected. It now seems as if the trend is continuing into 2017. Who would have thought that the venerable Oscars would feature a monumental goof-up, wherein the wrong film was announced as the winner in the Best Picture category? For many, the processes behind the Oscars ceremony symbolised nothing less than perfection. No one would have ever believed that the awards, managed by global accounting firm PwC ( PricewaterhouseCoopers), could go wrong. But the unexpected did happen. People around the world saw what happened! PwC assumed responsibility in a press release and has said the accountants responsible for the mix-up (Brian Cullinan and Martha Ruiz) will not be back. Investigations over what really went wrong are still on, but my objective here is not to speculate but to take lessons from what happened.

All work is a process

All work that is a done to achieve a certain objective is a process. Even if an activity seems to lack a process, if it has some output to be achieved at the end, it is a process. No one can doubt that PwC had solid processes to manage the entire event. Remember, they have been associated with the Oscars for the last 83 years.

The learning for business leaders is that when you install processes in an enterprise, don’t forget exceptions’ management.

However, the question that comes to my mind is, did they look at the “act of announcing the winners” as a process which comprises things that would need to happen before, during and after it? I don’t know. But what’s important for us to remember is that even activities that may not appear to be a process could actually a process. If an activity has an input, output and has a larger objective to accomplish it is indeed a process. In this case there are activities which happen in front and of us and those we don’t see. All of them are a part of a process.

In a business organization, activities such as management reviews, ideation, innovation, talent development, sales, strategic planning, product design etc. are processes even if they don’t look like it.

Exceptions are the rule

A lot has been written about PwC’s process to manage the award event. Only two partners supervise the counting process, know the winners and even memorise the names of 24 winners. The two partners carry the names of the winners and travel separately to the event just in case there are traffic jams. But going by what Brian Cullinan told the Huffington Post, the “process of managing in case a wrong name was announced” seemed to be unclear. Even if the process was there, he did not seem to know about it. The way the whole thing was managed after the botch-up on stage was also not very professional. Even if procedures were there to manages such a mistake as “announcing the wrong winner”, they were not followed. It was likely considered impossible that such a snafu could happen.

The learning for business leaders is that when you install processes in an enterprise, don’t forget exceptions’ management. And having installed processes to manage exceptions don’t let them hide in one corner because of disuse. Make sure employees know it and simulate it often.

Make critical workplaces sterile

Critical workplaces are areas in an organisation wherein errors can directly lead to health hazards, reputational damage, customer issues, financial loss, loss of life, brand tarnishing and so on. Examples of critical workplaces include an operation theatre in a hospital, the cockpit of an aeroplane, a trading floor in a bank etc.

PwC should have made a rule ensuring that the two partners handling the award event be barred from using their mobile devices or social media during the show.

In these workplaces there can be no distraction—just a few seconds of disruption could cause huge damage. These workplaces often have rules to prevent activities that distract the attention of employees. For instance, many of them don’t allow mobile phones. In the aviation world there’s the sterile cockpit rule wherein pilots are not allowed to do non-essential activities during critical phases of the flight. As research done by George Mason University reinforced, distraction impacts quality of work. During the Oscars event, PwC’s Brian Cullinan was busy tweeting backstage, which may have caused him to hand over the wrong envelope to the presenters. In hindsight, PwC should have made a rule ensuring that the two partners handling the award event be barred from using their mobile devices or social media during the show.

The learning for business leaders is that areas which are critical for business operations should be made sterile and bereft of all distractions.

Making senior leaders adapt to process thinking is not easy

As mentioned in the PwC press release, there were protocols to manage a botch-up as a “wrong announcement” but the same was not followed. Remember, the two individuals who were managing the event were not junior people but partners of the firm. This brings up the issue of how to make senior leaders adapt to process thinking. This can be a big challenge in organisations.

Even if you have an established process, regularly ascertain how it can fail and what steps you can take to mistake-proof it.

Have we not seen companies wherein the senior leaders will stand on stage and talk about processes, yet when it comes to them they fail to comply? This happens because they don’t realise the power and benefits of processes. One of the ways to ingrain process thinking is to make it a part of the organisation’s “way of working”. This has to be driven by the CEO, owned by the top management and repeatedly reinforced in all forums through talk and actions. And whenever there is a problem in the enterprise, they should tell their employees: “Go and ask the process.” This means to drill down and rectify the processes that are not working.

Make processes fail-safe

Whenever there are manual processes, they are prone to errors, irrespective of who is in charge. There’ve been arguments that the problem could have been avoided if the font or designs of the envelopes were made different—certainly this would reduce the likelihood of an error. Clearly, the takeaway for business leaders is even if you have an established process which is running for some time, regularly ascertain how it can fail and what steps you can take to mistake-proof it.

Three strategies that any small business can use to innovate

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Innovation is the bedrock of all businesses. As is rightly said, if a business does not innovate, it will evaporate over a period of time. A company focused on innovation just does not launch better products, but also makes operations better, enhances employee productivity, involves employees in the company’s development efforts and increase competitiveness in the marketplace.

A company’s journey to becoming an innovative enterprise is the outcome of many things coming together with a solid leadership driving to make it happen. Before a small business embarks on an innovation journey, it should remember three things. These are:

Just not the product
When you think about Innovation, it need not just happen in the product. Innovation can happen in any part of the value chain. There could be innovation in supply chain, distribution, processes, business-model, distribution channel, sourcing, accounting operations, organizational structure, partners and so on.

Rather, it should be remembered that innovation can happen across the value chain. By confining one’s focus to a product, the organization can miss potential opportunities for differentiation. This is the reason it is recommended to do a detailed value chain analysis to understand how each of the elements contribute towards creating value for the customer.

This process should also help to assess the capabilities of the partners, how they work together, their pains, their competition and the vulnerabilities of your business. For example, Caterpillar differentiated its business by promising customers to deliver parts anywhere on earth within 48 hours or it is for free. How did it achieve this?

This was achieved by creating a network of suppliers – a great example of supply chain innovation. An example of business model innovation is when a company advocates customers to not buy a car, but provides car with a monthly rent with an option to have another model of car every year.

Ideas are treasure troves
Every business owner should remember that ideas are treasures hiding within the organizational crevices which they can mine without investing any money. These ideas hide with stakeholders across the value-chain such as employees, suppliers, customers, partners and so on. This is something which business owners should know how to harvest.

This is, however, easier said than done. It requires the organization having an engine for capturing ideas from employees, partners and customers. Having captured them there has to be a mechanism for evaluating them and giving feedback to each individual who has taken the effort to share the idea. Remember, sometimes the best ideas for innovation come from the people who are close to the process. Never be stingy on getting ideas. More the number of ideas the better it is. A small business keen o ..

This could include ideation workshops, innovation schools, providing financial help to prototype ideas, pitch an idea to an executive team, Ideathons, create spaces for employees to innovate, celebrate smart failures, incentives, process walks, retail store visits and so on. If you want employees to be a continued source for ideas, you need to have a supporting culture and embed creative confidence among them.

Abhijit Sengupta, a leading quality expert based in the US who has helped small and large businesses in automotive and energy sector to become competitive says, “Without a continuous flow of ideas, innovation cannot survive in an enterprise. However, one should remember that a critical success factor for this is an engaged and trained work force which is willing to participate in the organization’s success. Communication is fundamental to the success of any effective organization. Despite having ..

Observe, observe and observe
Some ideas for innovation may emerge with serendipity but if a business owner is serious about innovation, he has to master the art of observation. While observing may appear to be a simple act which he can do with ease, this however is not the case. I am talking here about observation that throws up opportunities to address an unquenched need of customer. This has to be taught and comes only with practice.

So what does it mean to be a small business where the business-owner practices the art of observation? To know product performance, he just does not just talk to customers but spends time to observe the customers as they consume the product. He should be on the look-out for broad macro trends around economy, consumer behaviors, demographics and technology. He should see successful practices and innovations in another industry which he could pick and deploy in his organization. He should keep his ..

He should also question the existing assumptions of his industry and even his business. Remember, these are just not simple gaze but observations to gather insights for possible innovation. Innovation is not always about developing something new but transplanting a successful deployment from one context to another. What is critical to note is that your takeaway from observation should solve a problem. A forward looking business-leader ensures this skill of observing and getting value from it and ..

For example, when I was in ICICI Bank in the early 2000s, the then CEO nudged us to observe and learn. This led us to pick quite a few things from manufacturing shop-floor and use it to innovate our processes.

As Sengupta told me, “The art of observation sharpens through practice. One needs a curious mind that is constantly seeking answers to become better and competitive. The insights that one gathers from these observations can throw up opportunities which otherwise may not have been”.

Remember, innovation need not just be initiated by your Head of Product Development or Chief of Design. It can be triggered by employees who know how to observe and get value out of it.

The writer is an author and managing partner of Proliferator Advisory & Consulting. He is a Fellow of American Society of Quality and recipient of 2014 Phil Crosby Medal. To know more about him, please visit: www.debashissarkar.com

7 Reasons Why People Around You Could Be Phubbing

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Technology has quietly changed our lives, both for good and bad. Yes, technology has improved productivity, helped to digitally reconnect with friends, but it has also resulted in behaviours which are disengaging.

One such awful behaviour is phubbing, defined as: “To ignore (a person or one’s surroundings) when in a social situation by busying oneself with a phone or other mobile device.”

We don’t realise the impact of this deadly habit. It has the power to derail relationships, disengage teams, reduce productivity, peeve customers and cause errors.

Phubbing manifests in many forms. For example, when you are discussing an important matter with your boss, he is busy texting on his mobile phone. You are speaking at a conference but find your audience glued to their tablets or iPhones. You are talking to your daughter about a school in the US and she’s engrossed checking her Facebook feed. The security person in your building is busy with his phone while visitors quietly pass by. You are walking around a book shop when the salesperson tells you about a new bestseller but you seem are focused on your mobile device. Your son talks to you about his day at school but you only pretend to listen to him because you’re buying something from your mobile browser. You are having dinner out with your family but all of you are messaging on your phones rather than talking to one another.

We don’t realise the impact of this deadly habit. It has the power to derail relationships, disengage teams, reduce productivity, peeve customers and cause errors.

I have always been fascinated by why people behave the way they do. The behaviour I’m going to delve into today is phubbing.

1. Staying with our thoughts is difficult

We as humans find it difficult to be with our thoughts. A study even found that humans prefer an electric shock to being left alone with their thoughts! This happened even when they were just left with themselves for six minutes. Not surprisingly, we rush for mobile phone every time our mind is free.

2. Our deep desired to stay connected

Humans have this desire to stay in touch with others. In the 2016 sci-fi moviePassengers, Jim Preston (played by Chris Pratt) wakes up and finds himself all alone aboard star-ship Avalon and struggles with loneliness despite having every comfort. He then notices beautiful Aurora Lane (played by Jennifer Lawrence) in her pod and wakes her up. A great example of a human being’s urge to stay connected.

FOMO could be behind a lot of phubbing behaviour—people don’t want to be left out of all the action that’s taking place elsewhere.

People like to communicate constantly via their mobile devices because it makes them feel connected—this is a source of comfort; they feel psychologically reassured that their friends are never afar. One way to feel connected without direct communication is also to go through the social media accounts of friends and family members, hence the love of scrolling through Facebook, Twitter and the like.

3. Addiction to the internet

Some people are so addicted to the internet that they are virtually incapable of getting off it. Naturally, this frequently makes them guilty of phubbing. This is not a normal behaviour but a disorder which called PIU (Problematic Internet Use). They feel restless and uneasy unless they are online—for whichever purpose it may be.

4. Fear of missing out

FOMO could be behind a lot of phubbing behaviour—people don’t want to be left out of all the action that’s taking place elsewhere. They are afraid they will somehow lose out. Hence, they will visit social networking sites, check emails or browse WhatsApp messages. To them it’s crucial to keep their fingers on the pulse and to make their presence felt.

5. Avoiding an uncomfortable situation

People indulge in phubbing when they are in an uncomfortable situation. They are talking to someone and the other person pops a difficult question which they want to avoid. To avoid confronting this situation, the person looks at the mobile phone as a prop for defence—he can pretend something urgent has cropped up but in actuality he’s just stalling! Looking at the phone is also a good way to avoid making eye contact, which can make you feel vulnerable if you’re in some sort of precarious situation.

6. Lack of self-control

Phubbing is sometimes an outcome of being helpless in the face of certain impulses. Some people find it harder to regulate their urge to act—so if they hear a ping on the phone—even if it’s just an app update notification—they will feel compelled to check their device. It’s a reflexive action—it happens without much thought. They do it even if they are in the middle of a crucial presentation or at a romantic dinner. They are just not able to control themselves.

7. Fear of losing control

Some people become phubbers because they are trying to control events and people that are not physically near them. They may have a need to micro-manage others or to be constantly involved in discussions so they do not miss any details. It’s their way to maintain their grasp on a situation. As for the situation in their physical proximity? That’s another story!

Some people believe that phubbing is a normal behaviour and one should not worry about it. They think it’s a just a side effect of belonging to a connected world. I disagree with this view. It’s a disorder and one has to make a conscious effort to eliminate it before it impacts your relationships, workplace performance and productivity in general.

Is This A Lost Decade For Business Quality In India?

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Quality has been a key pillar for enhancing India’s competitiveness. We have world-class institutions known for quality as well as businesses that produce flawless products. These achievements have been possible because of the efforts of the last three decades.

If you closely look at the last three decades, business leaders not only transformed their organisations, but also set new industry standards, inspiring others to adopt their methods. This seems to be missing this decade. Yes, companies are becoming world-class, but one does not see industry-wide impact of 1990s and 2000s. The industry-wide efforts which are underway seem to be at most incremental in nature.

The industry-wide efforts which are underway seem to be at most incremental in nature.

If quality efforts between 1990 and 2010 had a significant impact on manufacturing, financial services and technology companies, which industry will get transformed in this decade? I am not sure.

The question that I am asking you all: Is this a lost decade for the practices of quality?

1980s: Decade of quality assurance

Prior to the 1980s, quality was all about inspection and checking products for defects before sending them to the market. However, beginning in the 1980s companies started shifting their focus from finished product inspection to installing quality in the process. For western multinational companies which operated in India, they adopted the practices that were being devised by the parent. The Confederation of Indian Industry (CII) started The Total Quality Management (TQM) Division in mid 1980s which later morphed into what we know as the CII Institute of Quality. In 1981, S R Udpa of Bharat Heavy Electricals first introduced Quality Circles at their operations in Hyderabad. Seeing the success at BHEL, Gaur Hari Singhania institutionalised Quality Circles in two of their companies: JK Synthetics Ltd. and M/s JK Jute Mills Ltd.

1990s: Decade of total quality management (TQM)

In this decade, companies for the first time started adopting ISO 9000 standards. I still remember my visit to Crompton Greaves factory in Mumbai, which was one the first companies in Indian to be awarded an ISO 9000 certification. This decade also saw the adoption of TQM, with Tata Steel beginning its journey under the leadership of JJ Irani in 1990. The year 1994 saw two big announcements: Ratan Tata introduced the Tata Business Excellence Model (TBEM) to ensure that the brand Tata stood for quality globally. Meanwhile, CII and Export Import Bank of India jointly established the CII-EXIM Bank Award for Business Excellence.

Such was the impact of Ratan Tata’s TBEM model that it inspired many other companies— Aditya Birla Group, Bajaj Auto, Marico Industries, Mahindra & Mahindra, companies in TVS group—which embarked on a TQM journey. Suresh Lulla brought in Juran’s approach to quality improvement and popularised it in India. He also played a stellar role in guiding Indian corporations on the TQM journey.

Along withTQM, companies also adopted TPM (Total Productive Maintenance). Vikram Cements became the first company in India, in 1995, to get the TPM Excellence Award from JIPM (Japanese Institute of Plant Maintenance) followed by Sundaram Fasteners in 1998. Such was the impact of TPM implementation at Vikram Cements that one could eat on the floor in a cement factory. Two Japanese quality gurus who made significant impact in the 1990s journey were Professor Yoshikazu Tsuda and Sueo Yamaguchi. The former helped companies in TQM, and the latter in TPM.

In 1997 CII along with Maruti Udyog, put together two clusters of Maruti suppliers to get mentored by Prof Tsuda. Similarly CII put together a cluster of five Maruti Udyog vendors to be mentored by Yamaguchi. K Krishna Kumar, then director at Maruti Industries worked behind the scenes to make this happen. While all this was happening Sundaram-Clayton of the TVS group became the first company to get the Deming prize after many years of hard work. While the quality deployment in manufacturing was very visible, the new technology companies were also doing their bit to raise the bar. Infosys was accredited the CMM (Capability Maturity Model) Level 5 standard for software development in 1999 when it reached the $100 million revenue mark.

2000s: Decade of Six Sigma, Lean and quality in service

The TQM efforts paid off in this decade and many companies were awarded the Deming award. The cluster efforts which started in the last decade spilled over in the 2000s. The late Surinder Kapur brought on board Shoji Shiba from Japan into India to teach Indian manufacturers “Breakthrough Management.”

However, what this decade really achieved was embedding quality into service companies. ICICI Bank became the first services company to have deployed Lean and 5S which was solidly blessed by then CEO KV Kamath. Companies such as Max New York Life, Standard Chartered, HDFC Bank, Yes Bank etc all launched their respective quality journeys.

There have been individual success stories but what’s different in this decade is that I have not heard of examples of quality transformation impacting industry and the nation…

Technology companies followed the footsteps of Infosys and got certified for CMM. Wipro made a significant mark in Lean deployment and Harvard Business Review covered it. As call centres started mushrooming in India, many of them adopted Customer Operations Performance Center (COPC) certification. However, what stood out in this decade the passion demonstrated by companies to adopt Lean and Six Sigma as approaches to business improvement. Six Sigma, which had been popularised by Jack Welch in GE in the 1990s, particularly caught like wildfire. What attracted both business leaders to both Lean and Six Sigma was that top line and bottom line impact could be measured. Not surprisingly by the end of the last decade India had made a mark as an outsourcing capital of the world.

2010 onwards: Is this the lost decade?

The extraordinary efforts of the last two decades did spill over to this decade. There have been individual success stories but what’s different in this decade is that I have not heard of examples of quality transformation which have impacted the industry and nation at large. We are already in 2017. India needs leaders like the ones in 90s and 2000s who can spearhead movements from the front. So many industries badly need quality adoption, including healthcare, real estate, education and several others.

With the Narendra Modi government’s announcement of “Make in India” and “Swachh Bharat” initiatives there is this great opportunity to take the quality movement to the next level. The Modi government also appointed Adil Zainulbhai, former boss of McKinsey India, as chairman of the Quality Council of India (QCI) and various other initiatives are underway as well.

These are great efforts but will they create businesses known for quality? While industry bodies, associations and societies are taking steps forward, they all seem to be incremental in nature.

Is this a lost decade for quality? What are your views?

6 Reasons Why Forgetting The Bitterness of The Past Will Make Your Life Better

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We often struggle to heal the wounds in our lives. These are hurts and bitterness from the past that continue to haunt us. There could be myriads of reasons for these hurts—you felt left out in the last promotion, someone you held dear deserted you, you were not treated well while quitting the organisation you tried to build, a person you hired and nurtured plotted to oust you from your role. Someone plagiarised your book and turned it into a movie and did not even give credit. You felt your boss did not give you your due. You underwent a bad divorce. Though all the events may not be the same, what they do is leave a residual bitterness (in varying degrees of intensity and duration).

Would you like to squander your beautiful life brooding about something that’s over? Or learn from it and move forward?

Interestingly, a friend of mine was once advised to never forget the wounds of the past since it would come handy in exacting revenge! How myopic. Would you like to squander your beautiful life brooding about something that’s over? Or learn from it and move forward?

Here’s why I think we should shun the bitterness of the past.

1. You have one life

You have one life. Every moment on this earth is precious. Every interaction, every experience is unique and always has a teachable lesson. It’s a kaleidoscope of experiences comprising the good, the bad, the extraordinary, the average, the wonderful, the inconsequential, the noxious and so on.

To put things in perspective, overall it’s a great journey, even if there are bitter moments. How boring it would be if we only had things happen one way. It’s the downs that sometimes make the ups more scintillating and satisfying.

I think we need to be more like ducks… they gulp down a bunch of stuff, but swallow only what they want to eat, expelling the rest. We experience good things and bitter things, but it’s important to keep only the things that make us better.

2. Time heals everything if you use it well

Time heals everything. However big a wound, it does heal over a period of time. However, to make it happen you need to use time effectively. As a University of Arizona study found, humans are not born resilient. They take varying amount of time to recover after a difficult experience. So one has to work on building this mental strength. After a bitter incident you have to take actions to overcome it. You have to engage your mind in activities that distract you from brooding and encourage you to move ahead. This could require going to a therapist, taking up new hobbies, changing behaviours etc.

Clearly, time will help you to heal if you use it well. Otherwise, there’s no guarantee.

3. We can forget past events if we play with our context

We can forget the bitter memories of the past if we really have a desire to do so. One very effective way to do this is to do is to manage or change the context, according to recent research. We tend to remember things amidst locations and context. The context includes things such as sights, sounds, times of day etc.

Do something so meaningful and satisfying that when you think back on the bitterness, you will feel thankful to it for setting you on a better path.

So if you change the context, and not think about these cues or the scaffolding that went into the creation of a memory, you tend to not remember the event. For example, if a song reminds you of an ex, listen to the song in a different context/environment such as during a morning walk or while returning from work.

4. Forgiving is divine

People talk about physical strength, mental strength, cerebral strength etc. But one thing which people don’t talk about is “forgiveness as a strength.” If people develop forgiveness as a life skill they would have a much better existence. Forgiveness is the art of letting go of the resentment and anger of the past which someone may have caused to you. It’s a deliberate effort to get rid of negative feelings about an individual or group of people and not holding any grudge against them. Whether it’s Hinduism, Buddhism, Islam, Christianity, Judaism, Jainism—all religions urge people to forgive those who have hurt them. Forgiveness has many benefits. It reduces stress, helps to improve relationships, enhances self-esteem, lowers blood pressure and improves overall psychological wellbeing.

5. Workplace relationships aren’t worth brooding over

Many of the relationships we have with people in our workplace are transactional in nature. They are based on power equations, what you bring to the table. Many of the relationships that you make are based on give and take.

People will be with you as long as it serves their interest; the day they feel that you are of no use to them they will quietly discard you. Have you not seen how people behave with us when we are in a position of power and when we are out of it? As a matter of fact, your entire connect with your enterprise is based on what you bring to the table. While nice things will be said about your past achievements, your existence in the company is based on your future relevance, and not what you have contributed in the past. This may sound crude but it’s the reality. So the point is, why brood over workplace events when they are inherently transactional?

6. Disappointment is an opportunity to reinvent yourself

The best way to get over the after-taste of a past bitterness is to make an effort to do something meaningful and reinvent yourself. Do something so meaningful and satisfying that when you think back on the bitterness, you will feel thankful to it for setting you on a better path. Don’t we remember what happened to Steve Jobs? He was thrown from the company he had created. He then went ahead to found NeXT and later bought Pixar. He returned to Apple after NeXT was bought by Apple. As he mentioned in the now famous Stanford commencement speech: “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me.”

Fortune favours the brave. And I have always believed when all doors close a new one opens.

How small business owners can make their customers raving fans

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All small businesses have an aspiration that their product or service should be so good that customers become raving fans. A customer who is a raving fan does not just repurchase the product, but also recommends it to others.

This is achieved by designing and providing a high-quality product backed by impeccable service. However, one thing that is not discussed is the role played by the business owner/CEO to make this happen. As a matter of fact, these individuals demonstrate a certain set of habits which play a significant role in creating this bond with customers. So what are these traits that are demonstrated by these leaders. Let us look at them.

Give top priority to customer issues
A CEO or a business-owner has many things big and small on his plate. However, when the mission of the company is to make customer’s their admirer, they make sure the customer issues and concerns get top-most priority. These leaders typically begin a day with a morning meeting with their leadership wherein the first thing they discuss are matters around customers.

During the day if there are complaints they do not wait for the next day’s morning meeting for initiating actions. Instead they immediately initiate actions to ensure the customer concerns are closed. Once a week they keep aside some time to go through the root cause analysis done by their teams. In these meetings, he is just not a mute spectator, but delves deep to understand that the teams are addressing a root cause so that the problem does not recur again.

They make regular visits to customers’ place to see how their product is performing and if there are any customer issues. Even if they are travelling outstation they are in touch with their teams to check if any customer issues have been reported. As a matter of fact these leaders create a framework within their company where any potential and actual customer issues are reported to them at the earliest. These business-owners know their success and business growth depends on the customers.

On this matter I spoke to Jacob Mathew, the CEO and Founder of Mangalam Plastics, a leading manufacturer of plastic blow moulded and injection moulded products in Jharkhand. He pursues customer issues with a maniacal zeal. He told me, “When I started my business almost two decades back I was clear that I will start small, but always follow a ‘customer-first’ philosophy. If there are customer issues which I get to know I make sure it get’s required priority above everything else.” This has clearl ..

Create a ‘measure to manage’ culture
A business-owner passionate about customers focuses on building a measure-to-manage culture. He focuses on creating a metrics-based organization where decisions and actions are driven by data.

The underlying principle driving this philosophy is what you cannot measure you cannot manage. With this objective in mind he focuses on broadly two types of metrics. One set targeted towards ascertaining economic performance. While the other set is targeted towards assessing the operational performance.

The metrics targeted towards business performance include things such profit margin, gross profit, working capital, return on total assets etc. The operational metrics include things such as machine utilization, productivity, lead time, customer order cycle time, inventory turnover etc.

What is critical here is to make sure the right set of operational metrics are installed. These metrics are externally focused, end-to-end and connect with the customer. What differentiates a customer-centric business-owner from others is that these metrics have guided and helped him to predict the business outcome. As Jacob Mathew told me, “Metrics help me to sense and respond to my business challenges”.

Act as advisors and not mere suppliers
What a forward looking business owner does very effectively is to change the relationship game. He does not behave as a supplier groveling in front of the customers. He turns the relationship on its head and behaves as an advisor who works with the customers to meet its organizational goals.

He does not act as a supplier who quietly takes orders but acts as a partner who sits with customers to understand his needs and then supplies what best meets the customer’s needs. Over a period of time he develops such a relationship with customers that he becomes the first port of call for any queries. His relationship is so robust that the customer regularly invites him to participate in product development process, strategy development and so on. These business owners also keep the customers ..

Spend a lot of time at customers’ context
A business owner passionate about customers spends a lot of time at the customer’s place. The objective of this is not just to meet relationships with influencers, but to understand how the product or service is performing at the customer’s end. What drives his actions is to learn about issues which the customer does not express but is important for the product performance. He knows that these issues can be understood by observing them using the product or service. I call it the customer immersion. His objective is to understand the behaviors, practices and motivations of users of the products or service which the customers are often not able to convey.

Never compromise on quality
A business owner who relentlessly focuses on customer’s interests makes sure that the quality of the product is never compromised. He works towards embedding a quality system that touches just not the processes within the organization but also touches its suppliers and partners in its ecosystem.

They work towards embedding quality as a larger organizational value and make sure all actions that employees take do it keeping the interest of product quality and customer in mind. Most importantly, they never make sale at the cost of quality. So if he knows that a certain batch of products does not meet the required quality standard, he will never send it to the customer even if it means missing on sales and losing the associated financial benefit.

The writer is an internationally recognized name in Lean Management & Customer-Centricity and author of eight books. He is a Fellow of American Society of Quality and recipient of 2014 Phil Crosby Medal. He is currently the managing partner at Proliferator Advisory & Consulting. To know more about him, visit: www.debashissarkar.com

5 Management Lessons From The Samajwadi Party Imbroglio

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The recent developments in the Samajwadi Party are much like a Bollywood pot-boiler, engaging the audience and also requiring suspension of disbelief! No one ever thought that the strong man of Indian politics and a powerful regional satrap would be challenged by his own son, but there you go. Truth is, anything is possible when power and aspiration are at play. However, if you look beyond all the noise, there are some great lessons in leadership and management hidden in all the melodrama.

People congregate around power

When Akhilesh Yadav took control of the party, it surprised many that those who were believed to be staunch supporters of Mulayam sided with his son and supported him openly. On the stage, during the special national convention, there was Rewati Raman Singh (co-founder of SP), Kiranmoy Nanda (party vice-president) and many ministers and MLAs whom Mulayam Singh had nurtured. There were also many people from the extended Yadav clan.

Don’t be surprised when in a company you see the employees hobnobbing with the person who could be the next CEO.

Like it or not, people hover and congregate around those they perceive to be powerful. Let’s say you founded an organisation, hired and nurtured your employees nothing moved without your consent. You were like the sun in the solar system. You were the power centre. However, if an alternate power-centre emerged, those who looked upon you as their beacon could easily follow him or her instead if their light burned brighter. They would forget your investment in them because they’d know that their future hinges on this new power centre. This is what happened in the Samajwadi Party. So many leaders who had been hand-picked and nurtured by Mulayam Singh Yadav did not hesitate to join the fold of Akhilesh Yadav as he is the future. They all know that Mulayam Singh Yadav is aging and may not be in active politics for long. Why not put bets on Akhilesh Yadav who is already a successful leader, has a strong following and is the heir apparent of the party? So when the party split it was not surprising to see most MLAs with him.

Don’t be surprised when in a company you see the employees hobnobbing with the person who could be the next CEO. Even the people who don’t like him suddenly start singing his praises. We as human are focused on our survival and will do anything to hold on to power.

Know when to pass on the baton

A leader should know when to pass on the baton and take an advisory role. If not done on time it can create a lot of turmoil. Mulayam Singh had a great political run as a three-time Chief minister and one-time Union defence minister, but he is now approaching his 80s and cannot be the force he once was. It would have been great if had passed on the baton and taken up an advisory role. Things might never have come to such a pass and the party he founded would not have fractured.

A leader should know that the organisation that he has created can’t be with him for keeps.

The problem with leaders is that they often find it difficult to call it a day for the organisation that they may have created. A leader should know when it’s time to hand over the reins to the next generation even if the organisation has been created, built and grown by him. If this does not happen, the next generation (that he has created) will rebel against him as they too have leadership aspirations. Don’t we remember what happened to Nobel laureate Muhammad Yunus who founded the now famous Gramin Bank and later refused to quit? The Bangladesh government felt he was past retirement age and there was a huge hue and cry. He finally had to quit when the Supreme Court decreed it.

A leader should know that the organisation that he has created can’t be with him for keeps. He has to be relinquished one day for the success of the organisation. If he does not do so, others around him who have aspirations will force him to quit.

When you quit, do it whole-heartedly

What happened in the Samajwadi Party is that Akhilesh was appointed as Chief Minister in 2012. Everyone thought that the discussions around succession would come to an end. However, even sitting in the CM’s chair, Akhilesh did not really get a free hand. There was repeated interference from his father and uncle Shivpal Yadav. Several times, his efforts were undermined.

When a leader hands over the baton and bows out, he should not keep popping back in! He should go the extra mile to ensure that he stays out of the day to day running of the organisation. This must be a conscious effort. Even if his erstwhile team members seek his intervention on issues pertaining to the organisation, he should politely tell them to go to his successor. He should learn the art of quietly fading into the background. That way he will ensure his credibility and respect

Know when to put on the brakes

When a person does not get the required freedom to function and gets pulled from all sides, he will do what he can to unshackle himself. First he will try to do it quietly but when that does not happen he will take drastic steps to get rid of the bondage. I am sure what Akhilesh Yadav did—such as sacking his uncle Shivpal Yadav from the UP cabinet—was probably the last resort.

Never push a loyal person so much that he has to take drastic steps. No one will tolerate unfairness forever.

Then, Akhilesh was sacked from the party for coming up with a parallel list of candidates for the upcoming elections. This was the last straw for him. He called a convention wherein he was elected as party president.

The lesson is to never push a loyal person so much that he has to take drastic steps. No one will tolerate unfairness forever. In a workplace, it should be remembered that as a boss or a leader you can’t push your subordinates so much that one day they retaliate in a manner that hurts you.

Know when to forge alliances, even with opponents

When you know that the going is going to be tough, it makes sense to partner with someone who can help you achieve your objectives. Let’s not forget there are no permanent enemies in politics.

The Congress and Samajwadi Party have never seen eye to eye, but Akhilesh knew that he had to face the wrath of anti-incumbency and the gargantuan political might of the BJP. Also, there was this feeling among OBCs that in a Samajwadi Party regime, it’s the Yadavs who gain the most. Hence the non-Yadav OBCs have been looking to the BJP and the minorities (Muslims) seem to be going towards the Bahujan Samaj Party. With the alliance, the SP hopes to reduce the antipathy that non-Yadav OBCs have towards it; there are even plans to get Nitish Kumar to campaign for them. Also, the alliance will assure the Muslim voters that there’s a credible attempt to defeat the BJP.

The take-away for a business environment is that there are no permanent enemies in the workplace. A business leader has to have the political competence to understand with whom he has to forge alliances to achieve his larger objectives. The alliance could even be with someone with whom he has had a very difficult relationship. A business leader should know how to work with opponents. This was amply evident when Abraham Lincoln as the President had people who were his opponents by his side, such as Attorney GeneralEdward Bates, Secretary of the TreasurySalmon P. Chase and Secretary of StateWilliam H. Seward. Or very recently when President Obama appointed Hillary Clinton as Secretary of State even though she ran against him

‘Quality’, the biggest differentiator for your business: Why SMEs should take note

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Irrespective of the type of an enterprise, quality is an anchor that gives credibility to a business. As far as MSMEs are concerned, quality is a sina-quo-non for business success. It has to be looked as a strategy for scaling up for survival. What drives repeat purchase for MSMEs is the trust that develops due to superior product quality and flawless service. If this trust is broken, customers will not shy to move to other players. Unlike large corporates, MSMEs do not have deep pockets to spend on marketing and to attract the customer’s attention and influence purchase.

I am not trying to scare MSMEs, but the fact remains that quality is at the centre-stage of their entrepreneurial effort. Creating a business known for quality is not easy and requires a whole lot of things that need to be done in tandem to get things right. To get this agenda going, I would recommend MSMEs to follow the LIMCA principles of quality. ‘LIMCA’ is an acronym coined by me and refers to the five strategies that a business owner should adopt and relentlessly follow them. So here are the LIMCA principles:

L = Leadership is the prime driver of quality
Quality has to be the agenda of the business owner or the CEO driving the business. You ca not delegate this to someone junior and continue to have the aspiration to provide quality product or service to your customers. Quality has to be treated as a key strategy for business success.

As the father of modern quality management, Edward Deming, rightly said: “94% of quality improvements is the responsibility of management (business owners in case of MSMEs). Commitment to quality for a small business owner means being hands-on in his effort which is doing things such as regular performance reviews, keeping an eye on metrics, building a culture, getting deep into complaints and never comprising on quality to make sale.

As Godrej Tyson Foods, COO, and Vanity Case ex-CEO, Arabind Das says, “It is leadership and only leadership that makes quality possible. MSMEs which I have mentored have been successful because they had a business-owner who was passionate about quality. The owner had an open mind and knew that getting the quality right was not a matter of choice but a must for business success.”

I = Improvement and not certification is the name of the game
I have come across business owners of MSMEs who have this notion that getting a quality certification such as ISO is the end goal of a quality implementation. A journey of quality improvement does not have an end. It only has many milestones. An ISO certification is one such milestone which indicates that the business has well-defined quality systems. However, what a business needs are to move beyond and embed an engine of continual improvement which ensures existing systems and processes are improved on an ongoing basis.

It is about following a structured approach to make an organisation better, bridge its shortcomings and sustain leadership in marketplace. As a matter of fact, a business owner should get worried if things are status-quo. These improvements could be triggered by customer feedback, complaints, competition, future requirements and so on.

M = Mindsets are the silent force
As you create a quality organization, do not forget employees and their mindsets. If processes make products, it is the people behind them who make it happen. It is employee habits, beliefs and behavior towards quality that will drive enterprise culture. Among all the five LIMCA principles, this is the most difficult and takes time to accomplish. There are no short cuts here. To change mindsets, one has to use tools such as training, communication, performance review, rewards, recognition, quality circles, etc. As Das further adds, “One of the main reasons why MSMEs are not able to produce a high quality product at low cost is because they focus on the wrong or incomplete set of metrics. They do not realize that it is both efficiency and effectiveness measures that need to be kept on the radar.”

C = Costs get reduced as quality deployment matures
It is commonly believed that focusing on quality adds to cost. Well, this is not true. As a matter of fact it is just the opposite. A successful deployment of a quality improvement programme leads to a reduction in costs over a period of time. How does this happen?

This is due to reduction in ‘cost of poor quality’ (also called: COPQ) which refers to costs that get incurred due to defective products or sub-par service. It includes things such as rework, defects, scrap, spoilage, supplier quality issues, warranties, replacement etc. It has been found that COPQ can be as much as 15%-20% of sales revenue. So when defects reduce, complaints go down or there are lesser service breakdowns, the COPQ automatically reduces. And this has direct impact on product cost which makes it more competitive in the marketplace. This should be music to the ears of an entrepreneur.

A = Ascertain performance of quality effort
At the heart of a quality deployment are the organizational processes. The outcome of quality is measured on how these processes perform. Typically, when people think about quality, they just think it is ensuring that the product or service meets the customer’s requirement. Actually it is much more. ‘Effectiveness’ or meeting customer requirement should be the first milestone of a quality journey. However, a holistic quality deployment positively impacts two other metrics which are ‘Efficiency’ and ‘Adaptability’.

‘Efficiency’ is about how effectively resources get used in a process and includes people, materials, other inputs etc. Remember, a good quality product should be both effective and efficient which means that the product not only meets the customer’s requirement, but also be produced in the most cost-effective manner. A business owner should keep a sharp focus on both these metrics. However, as his business matures, to remain competitive in the marketplace, he should also track ‘Adaptability’ which is the ability of a process to manage the changes in the requirement of customers and larger business context without impacting effectiveness and efficiency.

4 Lessons On Survival From 2016

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The year 2016 was rather unlike the last few that preceded it, in the sense that it was inundated with events that one did not expect. In my opinion this year has given us four lessons that we should keep in mind as we tiptoe into 2017.

Expect the unexpected

This was a year of the unexpected. What seemed unthinkable not so long ago became the new reality. Not surprisingly, a few writers have said this to be a year of black swans or events that come as a surprise and have a major impact.

Even the Nobel committee surprised us when Bob Dylan won the prize for literature!

It started with Brexit when Britons voted to exit the European Union in a referendum held in June. The event cost Prime Minister David Cameron his job and has put Britain on a path of uncertain future. This was followed by Donald Trump winning the US elections, leaving much of the world gobsmacked—wasn’t he just supposed to be a bad joke?

In Italy, citizens voted against Matteo Renzi’s constitutional reforms, pushing the country into a banking crisis and indicating the rising wave of populism in Europe. In Austria quite the contrary happened. In the elections held in December, the belief was that it would go the Brexit and Trump way instead Austria rejected anti-immigration and eurosceptic Norbert Hofer and elected Alexander Van der Bellen.

Closer home, in early November the sudden announcement of demonetisation of ₹500 and ₹1000 notes took the nation by surprise. While there are definite benefits of the push, Indians are still waiting for the banking situation to normalise.

And forget politics and political moves, even the Nobel committee surprised us when Bob Dylan won the prize for literature!

Go digital, or sink

For many who have been playing truant from the digital world, 2016 had a clear message: adopt a digital life or be prepared struggle. Earlier in the year it was formally announced by Klaus Schwab, Founder of World Economic Forum, that we have already embarked on the fourth industrial revolution. In the first industrial revolution, steam power was used to mechanise production; in the second industrial Revolution, electric power was used to create mass production while the third used electronics and information technology to automate production. This fourth industrial revolution is wherein the lines are blurred between the physical, digital and biological spheres.

Terrorism knows no borders, and nor do other types of violence. So, if you think we are safe anywhere, think again.

With progress in artificial intelligence, robotics, nanotechnology, biotechnology, energy storage etc, we will live in a very different world. With so many people connected on mobile phones and internet of things (IOT), devices will be connected over the internet and will talk to each other. Just imagine if your fridge was smart enough to tell you if a certain food product was out of date! Yes, that’s the world that we are moving in. So for someone who is not digitally savvy, life would be very difficult. Closer home, the demonetisation program and the subsequent push by the Prime Minister to go for cashless transactions clearly indicates that we are moving towards a digital society. While we may never be counted among the top cashless economies such as Belgium, France and Canada, I see our metropolitan cities making significant progress in this direction. Don’t be surprised if there are stores which just prefer to do digital transactions.

No place is really safe

No longer can any nation be considered “safe.” With the rise of terrorist outfits such as ISIS and other dysfunctional “lone wolves” waiting to unleash mayhem in society, no country is safe—not France, not Belgium, not Germany, not even sunny Thailand; you can see the entire depressing list of terrorist attacks in 2016 here. Terrorism knows no borders, and nor do other types of violence. So, if you think we are safe anywhere, think again.

Be prepared for the final frontier

This been an interesting year for humans as far as engagement with the universe beyond earth is concerned. President Obama set out a clear goal of sending humans to Mars by the 2030s and getting them back safely to Earth, with the final focus being to make humans stay there permanently. The Elon Musk-led SpaceX too announced its plan to send a spacecraft to Mars as early as 2018. The Jeff Bezos-led space company Blue Origin successfully launched and landed its suborbital rocket New Shepard couple of time, after flying it to the edge of space.

Richard Branson’s Virgin Galactic unveiled its second space plane SpaceShipTwo and successfully performed its first glide flight (the first spaceplane had failed mid-flight. Similar progress was made by SpaceX run by Elon Musk. Clearly space-travel at a lower cost became closer to reality. Meanwhile, scientists at University of Texas at Austin discovered a planet orbiting Proxima Centauri—the closest star to our sun—which seems to be habitable as it has water. In addition, Luxembourg decided to pioneer mining asteroids for precious metals such as gold, platinum and tungsten. It even passed a law to allow companies the right to keep whatever they find in asteroids; the US had passed a similar law in 2015.

5 Lessons For The C-Suite From The Wells Fargo Banking Scandal

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Wells Fargo had been a darling of sorts in the financial services world. It was one of the few American banks which reported a profit increase the financial crisis. Until the news of the scandal broke out in the first week of September, Wells Fargo had been the biggest US bank by market capitalisation since 2013. It overtook the Industrial & Commercial Bank of China in 2105 to become the world’s most valuable bank. Investors just loved this money-making engine. It is one of the two US companies (other than Apple) that made more than $5 billionnet income in 14 quarters. Not surprisingly Berkshire Hathaway, led by Warren Buffet, owns 10% of Wells Fargo shares. While competing American banks have been reducing their number of branches, Wells Fargo’s strategy has been to stay with its branch footprints as it believes it is its best client acquisition channel. Top consulting firm McKinsey has written about their customer-centric practices and how they have been successfully acquiring customers. The prestigious magazine The Bankerdeclared Wells Fargo as the world’s most valuable banking brand for the fourth year in a row last February.

Wells Fargo has a 37-page booklet describing how employees should behave and treat customers. However, many of these guidelines don’t seem to have been translated into action.

Wells Fargo was a shining star in the banking firmament. I have seen bank CEOs exhorting their employees to learn from it and adopt its various banking practices.

So, when it was reported that Wells Fargo employees opened 1.5 million bank accounts and applied for 565,000 credit cards unbeknownst to customers, the world—especially bankers—was shocked.

Clearly, the problems that were reported are a symptom of deep systemic malaise in the enterprise. Who knows, there could be similar problems in other banks. Leaders in the C-suite, not just banks, should understand some of the key things that they should avoid to get into a similar trap.

Values are not for glossy booklets

Values are rules which should govern all our actions. Wells Fargo has an attractive 37-page booklet to outline its vision and values, signed by John Stumpf. It describes beautifully how employees should behave and treat customers. However, many of these guidelines don’t seem to have been translated to action. Among the values are “ethics“, “leadership” and “what’s right for customers“. And it’s clear to see how the organisation has messed up living these values. The front-liners adopted unethical approaches to meet their cross-sell targets.

The booklet talks about the accountability of leaders, but that’s not in evidence either. Though John Stumpf has stepped down I thought this was quite late. Other than him, we have not heard any other senior level leader who has been held accountable for the actions—not even the head of community banking Carrie Tolstedt, under whose nose all this happened. She took early retirement and is entitled to about $95 million in accumulated stock and options.

As for customers, they were clearly duped and the organisation did not have their interest in their mind.

Revisit sales practices

The Wells Fargo incident should make banking C-suite review sales practices. The philosophy of selling to existing customers is well accepted. Not only does it reduce the cost of sales but also deepens relationships. But the question is what should be the depth of this relationship and how should the sales process be managed?

At Wells Fargo, teams had this cross-sale ratio target of eight per household… because eight rhymes with great.

At Wells Fargo, teams had this cross sale (selling existing customers multiple products) ratio target of eight per household. The target of eight was not based on any scientific reason but because eight rhymes with great. Hence it was called “Gr-eight”. And there were conference calls at 9AM, 11AM, 2PM and 5PM to ascertain progress. Organisations should decide the cross-sales target based on the profile and potential of customers. It can’t be a mindless exercise. Also, the Wells Fargo’s sales review process is nothing but micromanagement. The frequency of review can be decided by the company but it should be a session for stock-taking, reflection, coaching and uplifting the morale of the sales force. It definitely can’t be a session to force sales to achieve something even if they tell you with data that it’s not possible.

HR leaders needs to have the gall to take on the high and mighty

The Wells Fargo saga also highlights the inept culture and faulty incentive system that had pervaded the organisation for some time. I wonder what the head of human resources was doing when all this happened. While managing people is the job of line leaders, it’s the human resource function which is the custodian of culture and performance management. I would have expected the head of human resources to have sensed and responded to these practices when they were happening. Clearly they allowed things to fester.

One reason could be because human resource leaders are many times not able to stand up to the CEO and other powerful business leaders. The message for HR leaders is that if you want to sit in the C-suite don’t hesitate to call spade a spade—even to the CEO. Get out of your office and spend time with the frontline to know what’s happening. It’s easy to get wrapped in soft things like compensation, recruitment, learning and development etc. They need to have the gall to do difficult things such as confronting the leaders who matter in the organisation when the need arises.

Not about employees but processes and leadership

At Wells Fargo 5300 employees were fired for their actions. But this is just addressing the symptom. Remember, issues like these are manifestation of deficits in processes and leadership. CEO John Stumpf’s famous proclamation—”We call our employees team members, not employees. Employees denote an expense to be managed. Team members are an asset to be invested in”— appears so corny, especially when more than 5000 of those employees had to be sacked.

When all the fake accounts were being opened, the compliance processes should have thrown up the gaps.

Also, management processes around compliance and whistle-blowing seem to have also failed. When all the fake accounts were being opened, the compliance processes should have thrown up the gaps. Also, there are reports wherein employees were not given full protection when they spoke up and were later fired. Clearly, these are process issues which the organisation seems to have overlooked. Whenever there is a problem the first thing that an organisation should do is to check the process and ascertain the leaders’ roles around it.

Get a pulse of the front-line/shop-floor

It’s very easy for the C-suit to confine themselves to their corner offices. How often do they spend time with the frontline? It’s quite common among CEOs of FMCG/manufacturing companies to go on a sales beat to get a pulse of the market and get a feel of what’s happening there. How often do you see a bank CEO selling a credit card or a savings account? I am not saying that bank CEOs don’t meet customers but very often it’s a confined meeting with key corporate customers, or a few high-net-worth individuals. After all, it’s physically taxing and unglamorous to spend a day like a sales person in a bank who goes from one customer to another sell a mortgage or a person who stands in the shopping mall to sell a credit-card. I have seen bank CEOs meeting customers but usually with a TV crew and media in tow to depict how customer-centric the CEO is. I would recommend the members of the C-suite to spend at least one day a month doing a frontline /shop-floor employee’s job. This will throw up the rough edges and discrepancies that might otherwise get missed.

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