Survival Instincts For Organzations – Management Strategy

Siddhartha Dey

Business Head

Oman Shapoorji Company LLC

 

Executive Summary Crisis, a result of recession in economy, is a common happening in present world order. As economies move towards a more consolidated world order the impact of recession can no longer be buffered by any nation in isolation. The impact finally will translate down to the organizations and business and lead to many upheavals and chaos. This small article tries to have a peek into how organizations can attempt to survive such crisis, retain people and wait for a return to the golden days.

The Negative Effect While a recession is unavoidable due to various reasons, one of the immediate negative factor to recession is the “Job Loss”. While many economist and business leaders would prefer to term it as a “restructuring” the mere fact that human resources are nearly always the first victims of crisis is undeniable. Job losses leading to a huge un-employed work force stand great chance of creating social crisis and disorder leading towards more crimes as people try hard to meet ends meet.

RETAIN PEOPLE and still SURVIVE This article tries to highlight potential alternative to survival while maintaining human resources as the last restructuring factor. The industry I belong to, which coincidentally is also one of the largest employer world over, spends only about 10%-15% of their gross yearly budget on salary and wages. A whopping 85% to 90% of the expense budget are accounted for by other factors and resources. Then why is retrenchment one of the first actions on cost control/reduction?

One common term that can be allotted to all factors is theoperational efficiency (OE). The factors leading to OE and to be highlighted for target expense reduction can be listed as below:

? Plant and Machinery efficiency – a 10% improvement in efficiency and in a capital intensive infrastructure project could lead to a 1-2% improvement in overall bottom line.

? Wastage – Wastage is a major reason to worry in a project. A 5% reduction in overall wastage could bring down not only the loss on account of wasted materials but even in terms of wasted efficiencies and requirement for procurements.

? Rework – Commonly and frequently committed errors may be an affordable luxury in good times but best avoided in times of crisis.

? Work Methodology – Change the way to execute a job (work methodology) to more modern practices with more efficient resource planning to improve outputs.

? Project Management – For many, Project Management is all about a few DPRs, MPRs and some reviews. Modern project management practices need lot of practice and expertise. Investing in them is an asset for any organization.

? Generate Data – There is no substitute to having the most and the best of the data. Like a doctor says – best treatment happens with the best analysis of disease. Data leads to analysis and points to factors that need attention!

? Engineering – Engineering is the biggest contributor to operational efficiency. Devise ways to do things differently and in a cost effective manner.

? Communication – Be open to new ideas, new innovations. Give opportunity to even the lowest rung member to speak – who knows he may have some good ideas below his sleeves! And communicate with people to help organization survive.

? Training, job reallocations – In times of crisis, train people to accept alternate job roles, retain them for better times to come. This also adds skills to the existing manpower making them multi-taskers.

? Austerity Measures – How many times did we think of switching off the lights and ACs before leaving office? And report a leaked water tap or a cistern?

Conclusion A man goes back after losing a job and the whole village knows. 10 people retrenched and 1000s know the company as unreliable. Let good times be back and these companies will struggle to revive the strength and get willing people to join. So end of recession will not translate into good times till peoples’ memory fades. Also, it’s a common adage that a knowledge lost will not come back immediately with a replacement. Hence, keep manpower restructuring as the last resort to enhance cost cutting. Engineering has lot more options to offer.

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