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Org.Schema: Do not hire!

In the article “Org.Schema: Creating Redundancies“, I argue how for every position, you need to have a succession plan. You need to prepare the second employee, through job rotation, and I have conveyed that message through a case study.

Currently, I am in a job profile which also includes taking care of physical assets alongside helping my organization appreciate its human capital. The physical assets side of my profile has helped me appreciate some simple truths which may well be applied even in the case of human capital:

Do not invest in assets which you cannot possibly maintain. 

There is this tendency in large organisations to invest in large physical assets, larger even relative to their requirement. The asset does not receive the attention it deserves, and is left to decay with zero maintenance. Soon enough, it becomes a liability.

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Gif Credit: media.giphy.com

Because it is their in the books, and although the organisation may not be using it, still the depreciation costs are helping it “save” some taxes, although it isn’t really saving. So you need someone to just keep a track of the same, maybe invest in some security for ensuring that the asset is not misused in any way – BIG COSTS.

In the case of human capital: Do not hire, if you cannot assure the welfare of the employees. If you cannot ensure that they are put into proper projects or work that fit in with their career aspirations.  If you cannot provide good learning and development opportunities. If you cannot provide safety and security to the families of your employees.

Do not hire. Because in the long run, not only would those improper hires suffer along with their families, but also the organisation which may well be the biggest loser.

Cut off the extra fat, if you cannot possibly burn it. 

Having worked in two Public Sector Undertakings (PSUs), I have understood that one of the biggest strengths of the PSUs is the amount of land they have under their possession. But they do not always require that amount of land! And they spend enormous amounts of money on litigation, security and boundary walls to protect that. Wouldn’t it better to sell those extra land, and be asset-light when you cannot possibly put the extra land for the creation of organisation-value?

On the human capital side: Use your human capital for value-creation, and if you cannot, actively train & develop them or help them get more rewarding careers in another organisation. Your organisation would benefit much more than those employees. The employees would thank the organisation for not killing their careers.

But first, DO NOT hire if you cannot buy the right assets at the right time for the right amount at the right cost. 

You would not have to face the two problems listed before, if you just buy the right assets at the right time for the right amount at the right cost. Because of the right amount, the assets would be maintained. And no need for shedding off the extra assets, because you would again have the right assets for the right amount, right? (Too many rights, the lefts would mind!)

On the human capital side: Hire right. Hire trainable employees, who can add value not only in the present but also in the future. In this VUCA (Volatile, Uncertain, Complex & Ambiguous) business environment, you do not need the best for the present, but best for both the present and the future. Having the skills to learn both easy and fast (the motto of this blog), and having the right attitude to keep on learning always. 

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Comic Courtesy: dilbert.com

What other variables do you think affect power relations? Share your thoughts in the comment section below.

Amartya Dey, India

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Questioning Outsourcing – Part I

A boss of mine once famously said in an audience of two, how “outsourcing is the new normal“. You have a special, once-in-a-decade project? Outsource it. Do not have in-house expertise? Outsource it. No idea about how to go on about it? Well, again, you may just outsource it.

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Outsourcing helps an organization keep its immediate costs in check, also while reducing potential future liabilities. You do not have to worry about a lot of other peripheral things too if you outsource the work – medical benefits, salary slips, performance appraisal, and a lot more!

But while you do not worry about these peripheral things and rising employee costs, that also means letting go of certain amount of control that an organization might have to retain so that it has the requisite talent/skill pool for gaining and retaining competitive advantage in a fierce market.

These aspects raise certain pertinent questions:

  1. What do you outsource?
  2. How much do you outsource? Fully or partially?
  3. To whom do you outsource?

There are no correct answers. The answers would change vis-a-vis the context of the business challenge at hand. In this series, we would try to answer the questions and more.

Would love to know your opinion on the above questions. What do you think about them?

Amartya Dey, India

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PMP: Project versus Operations

While both projects and operations are led and executed by “people“, and both add “value” to an organization, projects and operations are two different exercises.

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Comic Credit: nickandzuzu.com

  • Projects have a definite beginning and a definite end. A project does not keep on going. There is a start and a finish. Not so with operations. Operations are activities which are ongoing in nature. You complete one cycle to start another. It goes on!

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Picture Credit: www.wgsn.com

  • Ralph Lauren famously said: “You have to create something from nothing.” While projects do not normally entail any demand so dramatic, every project manager has a measurable and unique something to deliver at the end of the project delivery time. For example, a team might be entrusted with the job of coming out with the design of an electric car. There would be a definite time-frame within which the team would be expected to deliver the design – a measurable and unique something. Now this would be a project.
  • Again, once the design and other parameters have been fixed, suppose the company starts manufacturing the electric car after sufficient market research (another project) which show that the endeavour would be profitable. The manufacturing would be an “ongoing” process right. One after the other, the electric cars would be manufactured and sold off. This entire process would come under the ambit of “operations“.

A simple summary:

Project versus Operations.png

More articles on Project Management:

PMP: 3 Must-Haves to be a Great Project Manager

Great project managers are rare, but hey, they are there. And they are valued because they possess the right knowledge, perform efficiently, and marshal their troops  effectively showcasing superior personal skills.

Yes, if you can garner the right amount of the three must-haves listed above, no one can stop you from being a great project manager (PM).

The must-haves are summarised below:

Must haves to be a Great PM.png

 

Business: BCG Growth Share Matrix Part I

In a world with unlimited resources, you would not have to worry about allocation of resources. Well, you would not have to worry about a lot of things – poverty, hunger, strife. War? We cannot say that for sure.

But as we are dealing with limited resources, we can only allot so much to the different priorities in our lives or businesses. And you would want to put money behind the ones that have earned the highest priorities by promising you the highest returns.

BCG Growth Share Matrix helps you make that decision – the decision about behind what endeavor you should allocate what percentage of your total resources. It uses two fairly intelligible dimensions to do that – Relative Market Share of the product which acts as a proxy for the amount of cash it generates for your overall business, and Market Growth Rate of the product which would tell you about the amount of cash the product requires (higher the growth rate, more is the cash required to sustain that growth). Fairly simple, right?

Also, understand this: if the relative market share of one of your products is high, you have earned a competitive advantage for yourself in that product line. Hence, relative market share acts as a proxy for competitive advantage too.

Likewise,  if the market growth rate for another of your product is very high, that means that the product line is attractive as an option to invest. Who doesn’t like growth! Thus, market growth rate acts as a proxy for industry attractiveness. 

Now Bruce Henderson of the Boston Consulting Group considered it wise to bring competitive advantage (proxy:  relative market share) and industry attractiveness (proxy: market growth rate) on the same sheet and provide us with valuable insights.

Lets look at the matrix now:

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Picture Credit: www.valuebasedmanagement.net

In the follow-up article, we would look in the various aspects of the matrix above – the cash flow, the earnings and the strategy you should take when dealing with cows, dogs, question marks and stars. Till then, we would be better off thinking about what other proxies can we use for both competitive advantage and industry attractiveness?

Post your suggestions in the comments section below!

Amartya Dey, India

Other Articles by the Author:

Other resources:

The Curse of the Franchising System

The franchising system is taking roots everywhere. After major cities have become saturated breathing for space and lack of options, the franchising model is moving towards the smaller towns. Who knows we might have burgers in villages before the end of 2030. 

P.S.: The franchising system does not only revolve around food. But as food is something that we can all relate too and food franchisees are ubiquitous, so I would focus on them for now if that is alright with you! 

The franchising system can be a no-brainer for many:

  • You do not have to worry about building a brand. 
  • You do not have to worry about making a *mistake*.
  • Experience helps everywhere but it can be done without here as you just have to follow the professional rules which would be part of the agreement that binds the Franchisee to the Franchisee. 
  • No worries about quality control, staff training and staff management. Everything is built in the system. 

Picture Credit: francity.com

Now what does it do? 

  • It kills innovation. There is no incentive to innovate. You are already selling 20 different types of pizza and then there’s the *agreement*, remember?
  • It kills local culture. You forget about Litti-Chokha.We become part of the *One*. Local tastes and flavors are forgotten, and a *standardized* food becomes part of our *standardized* lives. 
  • As our choices get *commoditized*, the entrepreneur dies. She does not have big money to compete with the advertising budgets of the big brands. Maybe she would come up with a cheaper burger with a potato patty for our poorer cousins. That is all! 
  • *Quality* of food goes down. (Read the article on “McDonaldization” by clicking here.) As competition and advertising spending by major brands increase, the quality drops further more. They squeeze the operational line to get every piece of profit. You cannot blame them. Money matters. Profit, more so.

The solution?

A part of me tells me that there can be no solution. But the eternal hopeful in me screams out the following:

  • Marketing your culture: If you want to survive and sell, you need to advertise. But when was the last time that you saw your Government advertising your country’s food in their tourism promotion advertisement? They advertise some dances, some colours and monuments in India. What about food, dude? 
  • Awareness: In France and other developed nations, children actually spend an hour having good food during their lunch period. Lunch period can also be a learning period – learning about balanced diet and the importance of health! 
  • Incentive for entrepreneurs: Incentives need not be financial. Incentives can be given also through training about modern management systems and something as necessary as electricity 24 cross 7. 

These are three of the top-of-my-mind suggestions. What else do you think can be done? I am not against the franchising system but the singular colors are killing all the vibrancy which we should try to protect. Efficiency is necessary but we can stay efficient even while preserving all our colors. 

What do you think?