Saturday, July 8, 2017
Below is a fictionalized case study that presents dilemma faced in real organization.And written by me is a recommended solution to the problem. This has been published in Business Manager July 2017 edition
Case Study - Dilemma at Infocom
Arun gazed wistfully at the picturesque view out of his window on the third floor of his Mangalore office. As the senior project manager at the Insurance Healthcare and Life Science division at Infocom Ltd, he hoped that the dark clouds were not an indicator of the times to come for his department. His meeting with Pradeep Shetty, the global division manager, had thrown up more questions than answers. Pradeep was not happy with the department’s recent performance and had expressed his displeasure quite openly. The stream of new projects from their main client, the US-based Insurance major Northwestern Mutual, had all but dried up. Even more worrying were the pressing conflicts within the sustainable support project groups.
Meenal Singh, a veteran with the most profitable project of his division had applied for a transfer. A programmer analyst and a team leader with Application Support in the past 4 years, she was well versed with the nuances of all the processes involved. Also, she was a brilliant team leader an always kept the morale of her team high. Having returned from a stint at the headquarters of Northwestern Mutual, Meenal had decided to get married and move base to Pune.
The support team that earned the bread and butter for Arun’s department consisted of two divisions: Application Support and Production Support. Meenal headed both the divisions. The members of the Application Support team consisted of Abhishek Singh, a software engineer with three years of experience. The senior most member of the team, Abhishek, had two years’ experience with a software start-up and had expected to be recruited at Infocom as a programmer analyst .Technically, Abhishek was almost as competent as Meenal and at the same time had also mastered the obscure insurance processes in a very short span of time. However, Abhishek lacked strong communication skills. Also, he was disgruntled with his role as a software engineer. Karan Ramakrishnan was another software engineer who had been involved in the project for quite some time. He had lesser total work experience than Abhishek and had been involved in the project for over a year. Karan was looking for a change from what he thought to be a mundane work of support and wanted desperately to get into a development project.
The other team members included Mukund Nair and Jathin Krishnan. Fresh recruits involved in the project for less than a year, they brought a lot of fresh blood and vitality into the Application Support team. Although quick learners, they were not mature enough to be put into positions of leadership of such a critical project so soon. Shilpa and Remy had just joined the company and were still in the induction phase.
Arun had decided on Mohan Kailash Gupta as the replacement for Meenal. Mohan had worked with the development team at the headquarters of Northwestern Mutual at Wisconsin. Although a software engineer with only two years of work experience, Mohan had shown tremendous technical competence on site. However, Arun was not so sure of how the Application Support team, particularly Abhishek, would take to this new leader. Meenal had been a very effective leader and maintained her relationship with the team even beyond the workplace, often taking them out for parties. Mohan, on the other hand, although very well versed with the system, was considered to be an introvert and not known to be a party animal. The interest and motivation levels of people involved with Application Support projects also seemed to wane quickly. People got bored quickly with the mundane support work involved and thus had to be kept motivated all the time.
Looming over Arun’s head like the proverbial sword of Damocles was also the newly started offshore support at Production Support. Production Support involved more of client interaction and consultation projects, while Application support primarily dealt with defect fixes. Although Production Support required a more in-depth understanding of the insurance processes involved and the system specific to Northwestern Mutual, the Client had insisted on appointing Shweta, a new recruit as a single-point offshore contact. Their rationale behind this demand was to have someone with a longer commitment to Production Support. Despite a slow initiation and a rigorous training programme, Shweta. Also, owing to health problems she was frequently absent from work.
Questions for discussions
1. How can you help Arun arrive at a decision that is beneficial for him as well as for Infocom?
2. What kind of decision-making strategies can be applied to solve the present problem?
3. Is there a possibility that Arun may revert to taking unethical decisions? How can he be prevented from doing so?
4. Will Shweta be a right choice in this present scenario? Why or Why not?
Case Study Analysis
The underlying solution to the dilemma at Infocom Ltd is absence of a process for preparing it's employees towards changing capability and capacity needs that will ensure smooth transition incase of need to help it in minimizing the impact in such a period. This is exactly the scenario that Arun as Senior Project Manager at the Insurance Healthcare and Life Science division at Infocom Division is facing.
Meenal Singh, who was heading the project as well as both the profitable divisions i.e. Application Support and Production Support had applied for transfer to Pune as she was getting married. Meenal also demonstrated good team management skills by keeping her team members engaged & motivated in work like taking them out for parties. Her replacement Mohan though technically competent was an introvert and hence not considered as suitable replacement.
Other possible replacements for Meenal, Abhishek Singh, though equally competent, lacked strong communication skills that is essential when managing a team in a project management environment. Other incumbents like Karan, Mukund & Jathin lacked maturity & leadership skills for managing such critical projects. There were other possible candidates namely Shilpa & Remy, however they were in induction phase.
All these dilemma's also show the need for identifying Leadership Competencies within the team and necessary training. This is currently lacking right now resulting into this dilemma. If this were in place, perhaps the scenario would not have been that dim as currently faced by Arun and in his meeting with Pradeep Shetty, global division manager, that threw up more questions than answers.
This dilemma also shows lack of system of training employees in ensuring effective career progression path. A mechanism / matrix to help employees exceed performance expectations and address overall employee related strategic challenges like this one would support both the employees & the organization to go beyond minimum work performance related standards.
It is also to be noted that to add to the dilemma was the Project Client's demand to appoint Shweta, a new recruit as a single-point offshore contact. The reasoning behind their demand was to have someone with longer commitment to Production Support. Although Shweta was subject to a rigorous training programme w.r.t. future, she was found to be frequently absent from work due to health issues. Hence there is no question of Shweta being a right choice in the present scenario due to frequent absenteeism from work that will result in loss of productivity, problems for other employees & considering the criticality of project work nature.
There are chances that Arun may revert to taking unethical decisions due to complex nature of the dilemma that he is facing with so many parties involved, due to not understanding the complexity of the issues and also due to external factors like client pressure and meeting their expectations like client request for appointing Shweta, lack of new projects from their main client Northwestern Mutual
Arun can be prevented by doing so in case of this dilemma is by first recognising if the request is unethical. If found so, he can buy time to do some research on it, speak to his company's HR or legal department for expert advise on determining the best course of action. Poor decision making in this case here can have a negative impact here in terms of resignations of employees that can affect the project as well
Monday, June 26, 2017
Below are fictionalized case studies that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine June 2017 edition.
Here below are few situations wherein employees are engulfed with motivational issues. The situations describe the motivational problems of individual employees and of organizations as a whole. And written by me is the potential solution to each problem.
Issue No. 1 - Sarita Dewan is an engineer who has been working with a leading software company for the past 15 years. She is interested in a managerial post. Most engineers in managerial positions in the company have had some administrative experience as project directors before they were promoted. Although Sarita knows that she needs the administrative experience, she is reluctant to take on the responsibility as a project director because of the hassles in coordinating the activities of various functions.
Potential Solution - Sarita is working in her comfort zone in same position for the past 15 years in same company. So this implies that she is doing well in her current profile and company is satisfied with her performance. So Sarita's both physiological & security needs are satisfied as per Maslow's Need Hierarchy Model. At some point or the other in one's career life, an individual yearns for change or growth especially when the colleagues / peers around you are doing the same and one sees them progressing. However change and growth inadvertently comes with risks and that implies getting out your comfort zone. The risk factor involved may work (opportunity) or may not work (risk - effect of uncertainty). Incase of Sarita, additional responsibilities that come with promotion involve doing new things never done before which an employee after a certain period of time maybe reluctant to do so since the basic needs (physiological & security) are already satisfied. The suggested solution to this is to build confidence into the incumbent Sarita, get her to come out of insecurity. This can be further resolved by offering regular training and showing the bigger picture.
Issue No. 2 - The Infogem TV Manufacturing Company has been using a performance-based bonus system to boost employee productivity. Quarterly bonuses are paid to work group that exceed the quarterly performance goals stipulated by the company. The initial response to the incentive system was highly favorable with more than half the number of work group exceeding the performance goals. However, as time passed, the human resources department started receiving complaints from a number of supervisors about low morale and motivation among their team members.
Potential Solution - Many employees equate compensation with the important activities the organisation wants to achieve. For example, incase of Infogem TV Manufacturing Company, quarterly bonuses are paid to work groups that exceed the quarterly performance goals stipulated by the company. In this situation, everyone clearly understand the importance of performance bonus because their own compensation and rewards are tied to it. However, as time passed, the HR department started receiving complaints from a number of supervisors about low morale and motivation amongst their team members. Hence Infogem TV Manufacturing Company needs to evaluate its approach to employee performance, recognition and rewards to determine the extent to which the employees are satisfied with them, the extent of their participation, and the impact of the system on improved performance.
Issue No. 3 - Last years, Image Motor Company used a sales contest to motivate its sales staff to increase their sales revenue. Two salespersons were selected from each regional sales office for grand prizes. The first prize was an automobile and the second prize was an all-expenses-paid vacation to Manali. The company has decided to continue the programmed because of the positive response to the contest in the first year. Yet, regional sales managers indicate that their sales personnel are not as excited about the contest as they were in the first year. Very few are even talking about the contest.
Potential Solution - Although research indicates that the main elements / key drivers of employee motivation and engagement include being valued and involved, other factors that affect employee motivation and engagement can vary significantly from organization to organization or within an organization from site to site which is exactly the case with Image Motor Company. One size fits all approach will not work. The Company should differentiate its employee motivation and engagement methods amongst the different group of regional employees. Also employees will be motivated and engaged when the company also identifies and corrects a problem that adversely affects their motivation and engagement (dissatisfaction). Just having a sales contest to motivate the staff to increase revenue will not work. For employees it's not just about rewards. They would like their other day to day work related concerns to be addressed as well for them to remain motivated and committed to their work.
Issue No. 4 - Enigma Corporation is an engineering company that designs and constructs industrial facilities. Its main line of business involves oil refinery and coal-gasification facilities. The company’s business has increased substantially in recent years because of energy shortages around the world. Enigma recently hired a large number of engineers just out of school and some from other companies in order to meet the increased demand. The main attraction is financial; Enigma offers higher-than-average pay and fringe benefits. However, thought it attracts a large number of engineers, very few stay for more than 2 years. The president of the company is concerned about the attrition rate of the company.
Potential Solution - The solution to the problem lies in absence of a career progression plan. It is the responsibility of the Managers at Enigma Corporation to help the newly hired engineers with work related development, learning and career progression. Else they run the risk of weaking employee morale and motivation. This adversely impacts employability and consequently organization's ability to maintain a viable workforce to compete effectively. Career progression and worker development programs provide evidence to workers that they are valued by the organization and it's leaders. This, in turn, enhances employee engagement, which enhances productivity. Sometimes, it's not just about financial benefits attraction.
Issue No. 5 - You have recently become the chief operating officer (COO) of a telecommunications company. You are very keen to improve the diversity of your workforce; however, a master plan has to be developed to pursue this goal so as to have support from other groups in the organization. Until now, your organization has been very selective in terms of employing people. The previous COO was generally reluctant to employ women and people belonging to certain minority groups as he felt they would not be able to adjust in the company. As a result, very few women and employees from minority groups occupy top or middle management level positions in the organization.
Potential Solution - In a competitive industry such as telecom, inefficient recruitment and bureaucratic bungling in the hiring process also provides a glimpse of the true management system and can scare off the best prospective employees. In addition, the hiring process represents a terrific opportunity to attract and hire workers with diverse ideas and cultures, without which it will be difficult to capitalize on diverse ideas, cultures, and thinking. This is turn may limit the ability of the organization's workforce to be engaged, innovative and empowered. Productivity suffers, as does the organization's ability to meet the challenges of today's highly competitive environment. Senior Leader i.e. The chief operating officer (COO) has to build a work climate that addresses the needs of a diverse employee base. Recruitment and training are tools to enhance the work climate. Employees are cross-trained to prepare for changing capability and capacity needs. Cross-training, job sharing and rotational assignments promote a more engaged worker and make that worker more valuable to the organization.
Issue No. 6 - Vikas owns two fast-food shops in a small town in Maharashtra. Each shop sells items such as burgers, pizzas, sandwiches, ice creams, milk shakes, and aerated soft drinks. He employs the local high school and college students to work for him as waiters. He pays his employees on an hourly basis. He has recently observed that they do not process customer orders as fast as they should and customers end up waiting a long time for the food. There is also variation in the quantity offered to customers, with some employees serving very generous portion while others serve very small portions especially while serving ice creams and drinks. Vikas wants to improve customer service and product consistency by changing the reward structure.
Potential Solution - In order to optimise performance, the employees that have been hired by Vikas must be aligned to the objective that he has in mind which is that of improving customer service and product consistency. Failure to do this forces the employees to decide for themselves, subsitute their own ideas instead of being driven / guided by their manager. Failure to provide rewards or recognition that support a customer focus may cause employees to behave as if customers are unimportant. Rewards (or the absence of them) drive behavior and motivate people to respond in certain ways. Recognition, and rewards/incentives could be provided for results, such as for reductions in waiting time for service to customers and for providing error-free services e.g. serving the right portoin of ice creams and drinks.
Sunday, May 28, 2017
Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine May 2017 edition.
Case Study - What makes or break the organization culture?
Alpha Corporation is an organization that takes care of its employees in a number of ways. The company has initiated many steps to make things easier for the employees and to promote positive organizational behavior. On the transportation front, the company provides AC cab facilities to the staff to commute to the company. This service is provided free of cost. Among other free benefits, food is catered to the employees . Employees are strongly urged to work to complete their tasks during the scheduled working hours. All facilities are provided for people working overtime.
The senior management team closely interacts with junior team. Often managers come to the desk of employees with bouquets and organize small celebrations for employees on occasions such as birthdays and anniversaries. This encourages informal interaction and teaches employees a lot about the culture of the organization. Festivals such a Holi and Diwali are celebrated with lunch or dinner parties.
The culture of the organization is open and non-hierarchical. Many members of the staff are so impressed with the culture and the management style of senior managers that they have made them their role models. This has gradually resulted in building harmony in the organization. The regular interactions between senior management and employees enable younger employees to adapt to the organization much faster. They are given all possible opportunities to seek opinions and explanations from the senior management about any doubts that they might have.
There are regular training programs in the company. The training programs are on different aspects such as behavioral training, technical training, and domain-specific training. This contributes towards the overall development of the employees along with development in their technical skill. This also helps in making employees more congruent with the company policies and objectives.
The reward and recognition programs at the company are based on merit. The pay structures as well as the extra rewards are given on the basis of performance in different projects. The compensation offered by the company is competitive though not the highest in the industry. Employees are recognized for the work that they do during regular summits in order to honour leading performers.
The offsite programs for employees are arranged team-wise, business unit-wise, and pan-company wise. The general atmosphere in the company is that of stability and calm, and is conductive to learning and improvement. It has a great brand name internationally and maintains the same working conditions and policies for its employees in India.
Although the organization promotes positive behavior among its employees through various initiatives, there are some issues which need to be tackled. First, as a result of the free culture, the level of competition that can drive employees to greater success is lacking. Also compared with its peers, the organization does not provide fast career growth to employees, which may discourage and frustrate ambitious employees. As most of the organization’s systems are set and structured, there is limited scope for feedback and change. Also, as the organization is relatively large, it does not promote an entrepreneurial mindset in its employees, and takes fewer risks.
As projects are assigned arbitrarily to teams, some teams get to work on more challenging and exciting projects than others. This creates feeling of discontentment, irritation, and resentment in employees who are assigned less exciting projects. As employees are used to working only until 5:30 p.m, some of them are unwilling to put in longer hours when a larger project or assignment is due. As the organization tries to promote stability, it is also soft on all employees-including incompetent and unmotivated employees. Thus, the organization has to support more than its fair share of “deadwoods”, which affects and hampers the productivity of other employees.
Although the company sponsors several festivals, celebrations, and contests, participation is limited to a few enthusiastic employees. Finally, despite several fine initiatives, several employees are dissatisfied with their monetary compensation. Thus, this may be the primary reason why many employees are always on the lookout for an opportunity to quit the organization.
A few interesting trends were observed in the organization over the past few years. According to a survey conducted, most employees admired the organization and its values. Most employees who quit the organization did so within two years of joining, and were generally new graduates. Employees, who quit when at mid-management level are highly sought after and get attractive offers in leadership roles within the industry. Among the older employees, many have spent their entire career comprising more than 20-30 years in the organization. The top management comprises of a large percentage of women and non-resident Indians based in the United States.
Questions for Discussions and Solutions
1. How would you classify this organisation on cultural parameters?
The culture of Alpha Corporation seems to be that of family owned & managed based on traditional relationship value. This is evident from various examples like open & non-hierarchical culture, company wide celebration of festivals such as Holi & Diwali with Lunch & Dinner Parties, provision of employee facilities like AC cab for commuting, food, urging employees to complete work during office hours only, etc...
The culture of Alpha Corporation can also be viewed as not so professionally managed & maybe equated to that a start-up culture given by the fact that compensation though competitive is not as per industry standards leading to employee dissatisfaction and ultimately leading them to quit for better prospects. Most employees who quit the organisation do so within 2 years of joining & are generally new graduates. So Alpha Corporation can be deemed as Training Institute for Freshers or from where competitor companies can pick up skilled and trained employees ready to perform on the job from Day 1. No training investment required by them.
It also seems that all the employees seem to be working in their comfort zone and there is no competitive pressure on them to perform and sustain their positions. This is evident from older employees having spent their entire 20-30 years career or employees not used to working beyond office hours or putting in longer hours when a large project or assignment demands so. Alpha Corporation in its endeavor to promote culture of stability and care for the employees makes do with incompetent and unmotivated employees and supports dead woods, doesn't take any performance based action against them.
2. Identify the initiatives taken by the organisation to promote its strong culture
Alpha Corporation has undertaken many initiatives to promote its strong culture. This includes provision of free AC cab facilities for employees for commutation, food provision, facilities for working overtime. Senior management participates with junior team for celebrating occasions such as birthdays and anniversaries thus encouraging informal interaction. Lunch & Dinner parties are organised for major festivals such as Diwali. Thus Alpha Corporation has various employee engagement activities in place.
Due to open and non-hierarchical work culture, senior managers serve as role models for juniors and newcomers in the organisation. Juniors are free to seek opinions and explanations from seniors for any doubts that they might have without any hesitation. This has also resulted in younger employees adapting to the organisation work culture and its procedures much faster. This has also resulted in building harmony amongst the employees in the organisation.
Structured training programs exist in the company on different aspects such as behavioral, technical and domain-specific. This helps them to develop their competencies and also make them more aware of company's policies and objectives.
Alpha Corporation also has various reward and recognition programs. Employees are recognized for the work that they do and leading performers are honored.
3. What are the problems encountered by this organisation?
Alpha Corporation in its endeavor to be an open and non-hierarchical organisation and promote traditional values like culture of caring & harmony amongst its employees, firstly faces the challenge of retaining skilled, ambitious, enthusiastic, professional and career growth oriented employees who would like to move up the career ladder. Attrition is an issue in the organisation.
Also due to cultural issues, employees do not seem to strive to work hard or put in extra efforts in their work when it is required of them. They are used to fix working hours. Employees are used to work in a routine and do not wish to go beyond it.
Also due to non-professional and non-competitive work culture wherein employee performance is not reviewed regularly and feedback given, the company supports incompetent and unmotivated employees (deadwoods). This in turn affects and hampers the productivity of other employees. They in turn get demoralised, disconnected & disengaged with the organisation. One issue leads to another. The company though it sponsors festivals, celebrations and contests, only few regular & enthusiastic employees participate in it.
4. If you were the CEO of this organisation, how would you bring about a positive culture in the organisation
The culture at Alpha Corporation is in need of a revamp. And this can only happen when it's driven from the top, when it's leadership driven.
The CEO must walk the talk in leading systematic performance improvement throughout Alpha Corporation. This can be done by carrying out many visible activities like setting goals, planning, recognizing & rewarding performance. A significant portion of the time of CEO has to be spent in performance improvement activities if a positive culture change has to be brought about.
Job definitions with performance targets must be clearly delineated for each level of the organisation, objectively measured, and presented in a logical and organised structure. Systems and procedures must be deployed that encourage cooperation and a cross functional approach to management, team activities, and problem solving. Actions must be taken to assist those employees that are not meeting their goals or performing to plan.
Promote the concept of cross-training and job rotation. Cross-training, job sharing, and rotational assignments promote a more engaged employee and makes that employee more valuable to the organisation.
Assessment of employee satisfaction & engagement. Although Alpha Corporation claims to have many employee engagement initiatives in place, a systematic process must be deployed to evaluate and improve the effectiveness and extent of employee satisfaction & engagement initiatives. Consistent and prompt action must be taken to improve conditions identified through these surveys.
Sunday, April 30, 2017
Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine April 2017 edition.
Case Study- Change For better but how?
1991 ushered in a new era for Sea Side, the email order retailing agent. The company with a turnover of over a billion rupees was growing faster than ever before and was no longer the small, home-grown catalogue store. Located in south Kolkata, its 5,000 employees adhered to its culture and its management practices as well as the philosophy of its founder and chairman, Shantanu Das, “Take care of your people, take care of your customer, and the rest will take care of itself.” In 1991, Das decided that the company needed to apply modern management practices to keep up with its growing size and complexity.
The first step was the recruitment of a new executive vice president from competitor Mountain View, Subodh Marwah to lead the changes. Marwah quickly made numerous changes to modernize the management systems and processes including team-based management, training programs for trainees at all levels, a new multi-rater evaluation system in which managers were rated by peers and subordinates as well as their supervisors and the use of numerous consultants to provide advice. The company reworked on its mission to provide excellent products and services and to turn every customer into a friend. In addition, the company entered into a new international venture and a new business segment each year, resulting in solid businesses in the UK, Japan and Germany. Marwah was promoted as the chief executive officer in 1993. In the continuation of the modernization efforts, he hired seven new vice presidents, including Ankit Verma as the new vice president of human resources to oversee all the changes in the employee arena. In the first two years, the changes seemed to be working as the company added 100 million rupees to its revenues and posted record profits.
However, all was not as rosy as the profit picture seemed to show. In spite of the many programs aimed at employee welfare, training and team building, many employees complained of always having to meet production and sales targets. The new employee performance evaluation system resulted in numerical rating which seemed to depersonalize relationships. No matter how many pieces she monogrammed per day, one employee felt that her work was never appreciated. Other employees complained of too many meetings necessitated by the reorganization and the cross-functional teams. One team of catalogue artists, buyers, and copywriters needed numerous meetings each week to coordinate their activities. A quality assurance manager complained that his work week had increased from 40 to 55 hours and that the meetings were taking time away from his real job. Many employees complained that they did not need to go to training programs to learn how to take care of customers and communicate when they had been doing that all along.
The doubts grew until late 1994, when the board led by Das decided that the new management was moving the company too far too fast and moving far away from the basic philosophies that made the company successful. On 2 December 1994 Das and the Vice Chairman Nikhil Rao asked for Marwah’s resignation and fired Verma citing lack of confidence in the direction the company was heading under the present management and the need to return to the company’s basic philosophy.
Mr. Das then chose 34-year-old Vikash Sen as the Chief executive officer to steer the company. Sen and 11-year veteran of Sea Side (his entire working career), immediately started the about-face by dismantling most of the terms, reorganizing the others and returning to focus on what the company excelled at previously-top-quality classic clothes and excellent customer service. Three other executives left the company shortly after Sen’s appointment.
Shortly after his takeover, however, paper prices doubled, postal rates increased, and the demand for clothing dropped sharply and profits for the third-quarter dropped by 60% as the year ended, overall profits were down to 30.6 million rupees on barely Rs 1 billion in sales and Sen had to cancel a mail order to save money. Rather than cutting quality and laying off people, Sen spent even more on increasing quality and employees benefit, such as adoption assistance and mental health referrals. His philosophy was that customers still demand quality products and those employees who feel squeezed by the company will not provide good customer service. Early results were positive, with the company’s first-quarter producing profits three times as those produced the previous year.
Critics of Mr. Sen’s return to basic philosophy argue that the modernization attempts were necessary to position the company for global competition and faster reaction to competition in several of its catalogue lines. Its return to growth occurred primarily in acquisition and new special catalogue lines and not in the main catalogue for which it was so famous. Mr. Sen has put further acquisition and global expansion on hold as he concentrates on the core businesses. Employees say that they have fewer meetings and more time to do their work.
Case Analysis - To bring change, reinforce trust amongst the employees
Questions for discussions and solutions
1. How would you characterize the two sets of changes made at Sea? Which set of change is really modernization?
The first change process initiated by Executive VP Subodh Marwah should be perceived as modernization. He made numerous changes to modernize the management systems and processes through a slew of measures including reworking on company’s mission statement, new international ventures and markets. He even recruited a new team to give him new ideas and perspectives to support the growth plans. All of this showed in the results as the company added 100 million rupees to it’s revenues and posted record profits.
However it seems that the employees weren’t able to keep pace with the rapid growth rate of Sea Side. Obviously when the company is undergoing change and transformation and focus is on growth and results, performance measures and accountability will be in place. There will be targets to meet. It seems that the employees were not prepared for this rapid change management process that was happening and could not keep up pace with it. This resulted into them being unhappy with the current scenario at work and thus disengaged. They started complaining like increase in work hours, unproductive meetings, lack of appreciation at work, etc…
The board led by Shantanu Das saw that the company was moving away from it’s core philosophy of taking care of it’s employees and customers. So they asked Subodh Marwah to resign and fired VP – HR Verma citing lack of confidence in the direction the company was heading and need to return to company’s basic philosophy.
The Board hired a new chief executive Vikash Sen who immediately began dismantling and reorganizing most of what the previous team had done and focusing on past excellence history of the company i.e. quality classic clothes and excellence in customer service. However much to his and company’s dismay, things did not work out as planned as raw material and production costs increased and there was seen drop in profits. The company had to cancel a mail order to save money. Sen was seen even spending more on increasing quality and employee benefits even though business performance was dismal. Eventually Sen had to put further acquisition and global expansion on hold.
It seems that there was no planned strategy in place by Sen. He was just following the mandate given to him by the board of returning to the company's basic philosophy. It is fine that one should stick to it's core value or philosophy of what it is good at but this should be regularly revisited in tune with the changing internal & external business environment or context or issues. And based on review results, can then decide to continue doing as usual or fine tune or modify where necessary. One cannot keep on doing the same things repeatedly and expect to grow. There needs to be change however it should be in a planned and systemic manner and it should be given time. Don't expect immediate results. Change takes time.
2. How did the change processes differ?
The first change process initiated by Marwah failed to understand properly the needs and expectations of important stakeholder groups like the Board headed by Das and key employee concerns. If that were in place as a preventive action measure in terms of what is likely to go wrong if not addressed or fulfilled, then the resultant reactive measures that occurred later could have been nullified or reduced to some extent. Example – employee grievance like increase in number of working hours or meetings, unhappiness with the performance rating system, board unhappy with new functioning style or pace at which rapid transformation was taking place, etc....
Also it needs to be pondered as to whether the leaders understood as to what is expected of them as leaders of organizational change and making sure that their actions and words support the change management initiative.
The next round of change process set off by Sen was typical that of a new person in helm of affairs would do things his way or follow instructions of his boss just because the earlier person failed to live up to expectations and causes disarray in the organization. He went about dismantling, reorganizing things set in motion by his predecessors and bringing in his own viewpoints which he felt will bring in the desired results that the company wanted in first place itself. Sen should have instead used the opportunity given to him firstly to realise as to what exactly went wrong, there should have been learnings from past wrongs or mistakes and that should have been utilised as an opportunity to set things right the next time around. There should have been organizational learning in place especially after a disastrous first attempt that failed badly.
3. How do you think employees will view future attempts to implement change at Sea Side?
Employees will think that continuous change is not important. It will not be taken seriously. Employees will think that all this will keep on happening at top level. We just keep on continuing with our daily routine work as usual. This also implies that any major announcement by the top leadership at Sea Side will not be viewed in the usual serious manner as it should have perceived to be. Because employees cannot see continuity in what is being said and what is happening in reality or in actual practice.
An organization's success depends increasingly on an engaged workforce that benefits from meaningful work, clear organizational direction, and performance accountability and that has a safe, trusting and cooperative environment. By asking the CEO to resign and firing VP HR citing lack of confidence in direction in which the company was headed, employees down the line will begin to ponder as to what exactly is happening in the organization. Where is it headed? What is its future? Do they also have a safe and secure future career in the organization or should they also be looking at other opportunities. The rumblings at the top level will undoubtedly have a cascading effect down the line as is seen by three other executives also leaving shortly.
All in all the employees will not view seriously the change management attempts at Sea unless it is leadership top driven and there is stability and continuity in the initiatives. Also everyone's views must be taken into account and there must be involvement of all stakeholders concerned.
Sunday, January 1, 2017
Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine October 2016 edition.
Aravind Engineering Company is one of the largest engineering and manufacturing enterprises in India. It is engaged in the production of heavy electrical equipment like heavy boilers, and power generation and transmission equipment. This company is well known for its high quality products and it exports a significant portion of its production. The workforce strength of this company is 12,500, of which nearly 60 per cent of the employees are in the age group of 40 and above. The company has a strong union presence as nearly 80 per cent of its workforce is unionized. The HR department of the company is headed by Mr Mithun, a post graduate in HR with a law degree. This company has an appreciable HR policy that offers the best compensation packages for the employees. It also offers adequate training and development and career opportunities to its workforce.
However, the only sore point among the otherwise excellent HR practices of this company is the slightly high level of industrial accidents occurring in the factory premises. The company has reported an average injury and illness rate of 6.2 per 100 employees, while the industry average remains at 4.8. Based on this criterion, the safety management policy of the company is deemed to be inadequate and ineffective. Obviously, the management wants the HR department to adopt rigorous safety practices to scale down the injury and illness rate to a level that is less than the industry average in a cost-effective manner.
Although the HR department is more than willing to introduce a comprehensive safety regulation by introducing new safety devices, apparatus and procedure, it faces several problems. The unionized employees are bent on opposing the new safety provisions for several reasons. In fact, the earlier safety initiatives by the HR department failed miserably due to the noncooperation of the employees and their trade unions. The unions feel that any compliance with the new safety regulations would force them to spend 10 minutes extra time. These employees are not prepared to spend any extra time for safety matters. They also feel that the handling of safety devices could slow down their productivity and performance, which, in turn, could affect their earning capacity. The traditional work culture of this company, which accords top priority to productivity over safety, is also making matters difficult for the HR department to introduce changes in the safety regulation. The safety training programmes conducted by the HR department in the past did not serve any purpose as the employees continued to exhibit an intransigent attitude towards safety regulations and flouted safety norms. Ironically, the employees are satisfied with the existing norms and apparatus and do not mind the injury rate and record of the company.
Quite understandably, the HR manager is perplexed over the strange situation. He is at a loss to know what needs to be done in the future to convince the employees, especially the union members, to accept the additional safety features. With the deadline, fixed by the management, for introducing the revised safety regulation fast approaching, the HR manager is in a real tight spot.
1. How do you assess the safety problems of Aravind Engineering?
The safety problems of Aravind Engineering can be summarized as follows;
a) The company has a strong union presence as nearly 80 percent of its workforce is unionised. Hence incase the management of the company wants to bring in some changes w.r.t. Labour, chances are that it will face strong resistance from the union who constitute more than ¾th of the workforce. Hence they have a strong collective bargaining power incases wherein they wish to oppose the management's decision. It is also seen in current context in the form of resistance by them when the HR department wishes to introduces new safety measures.
b) It also seems that there is an indifference in attitude exhibited by the unionized employees who are opposed to changes for their betterment. They are exhibiting a closed mindset by saying that new safety regulations would force them to spend 10 minutes extra at work for which they are not prepared at any cost. They feel that by way of handling of new safety devices could slow down their productivity and performance which in turn would affect their earnings. Giving priority to daily earnings / wages over safety which is for long term work benefit and longetivity shows lackdaisal attitude on part of the unionized employees.
c) It also does not help that the traditional work culture at Araving Engineering Company driven by the Leadership accords top priority to productivity over safety that makes matters difficult for the HR department to introduce changes in the safety regulation. The HR department can only do as much as it is empowered to do. If the focus of the company management is on revenue and production at any cost, then it will override any change management initiative that the HR department will introduce as the employees are only concerned about production and revenue and growth. It also does not help that Aravind Engineering is a market leader in production of heavy electrical equipment and as such all employees are working in their comfort zone knowing that they are currently unchallenged and hence why bother with changes and new initiatives when things are working well.
d) Another example of this indifferent attitude exhibited by the unionized employees towards introduction of new safety measures for their betterment is the fact that the company has reported an average injury and illness rate of 6.2 per 100 employees whereas the industry average is 4.8. This data should set the alarm bells ringing since the company is lagging behind in meeting the industry norms for safety. In order to overcome this, the HR department conducted various safety training programmes. However they were not effective as the employees continued to exhibit an intransugent attitude towards safety regulations and flouted safety norms. The employees showed satisfaction with the existing norms and apparatus and did not mind the injury rate and record of the company.
2. Who should be held accountable for the present state of affairs?
Ultimately, it should be the Leadership or Management who are ultimately responsible for the outcome of the introduction of new safety measures and in convincing the employees at Aravind Engineering, especially the union members, to accept the additional safety measures. If things don't work out as expected, it's not the responsibility of the HR Manager or anybody else. All roads lead back to Management of Aravind Engineering. They have to take an active role.
Management must ensure that these things happen. This can be done by reviewing the outcomes with HR and by way of assistance in resolving hinderances faced. It cannot be just delegated to HR and make them responsible and accountable.
Management should communicate to all it's employees as to how important safety is for the company and why it's critical for them to adhere to the regulations required. This communication requirement can only be fulfilled by them. This cannot be delegated. Management by communicating the importance of safety directly are endeavoring in giving the message that the actions of HR are real and that they believe it and all others involved should also believe in it too. This may also make the work of HR easier when implementing the changes because employees will then feel more motivated and will participate more actively. Buy-in will be ensured from the employees.
3. Had you been the HR Manager, how would you have handled the situation?
The HR Manager could have handled the situation better by engaging in more dialogue with them. A careful assessment of their concerns, their particular issues could have been done and solutions on it provided in consultation with them. The HR Manager prior to implementing the changes should walk everyone through the proposed changes in safety, why they are being implemented and why it is safe. The HR Manager by drawing upon past implementation experience of such measures and likely reactions of the employees could have anticipated the objections the employees will have this time around and thus be prepared to address them by validating their concerns and emphasizing the benefits of change. By planning, the HR Manager would have been better equipped to address objections head on.
By enlisting active support of the Management of Aravind Engineering as stated above and thus driving home the message that the company is serious about the changes to be introduced in the way safety norms and regulations are currently practiced and it's not just another routine act of HR that can be ignored assuming that things will remain the same.
Since communicating the importance of safety is the key – how it is currently practised and what needs to change, visual posters communicating the importance of safety may be displayed across the company at various locations. This will create safety awareness amongst all levels of employees and thus reinforce the message.
Rewards and Recognition Programmes can be introduced for best practices in following safety exhibited by the employees. Employees who show adherence to the new safety measures may be recognised and rewarded by the Management. This may serve as a motivation and incentive for other employees to also adopt the changes and thus vie for the R&R.
Employees who have switched over to the new safety norms, their services can be enlisted, to speak to others in their group about the importance of safety and how by switching over to the new safety measures has benefitted them. Once the employees hear from one of their own about the benefits, they may be more inclined and willing. Resistance to change will be less.
Aravind Engineering can also look at applying for Safety honors or awards in the industry like 'British Safety Council Award' or 'Sword of Honor Award'. By applying for the award, the company will be competing against others who have also applied and will thus come to know as to where it stands in the industry vis a vis the best safety practices followed. Should Araving Engineering were to win an award, it will get recognition in the industry. The award won would also serve to boost the morale of the employees and incentivise them to perform better and also maintain the safety standards for which the award is bestowed to the company.