Organisational Metamorphosis

All enterprises need to adopt certain key strategies to succeed in today's tough markets

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By  Hemanshu Joshi Published  August 4, 2011

At a time when all the economies are struggling to come out of recession, the Arab world is seeing unprecedented revolts, and inflation is ever rising, enterprises of all kinds in all sectors are trying to seek whatever foot space, wherever they can.

The competition is fierce and the markets are flooded with competitive and complementary products and services. This phenomenon is not confined to one sector, all sectors are posing similar challenges and opportunities to all the players in market. Anyone is trying to woo their potentials consumers by all means, making the overall market scenario very aggressive and ruthless. Everyone is equipped to beat the competition.

On the other hand, consumers in all kinds of business environments, be it B2B, B2C or B2G, enjoy the power of selection and gratification. If consumers do not see the value in a service or product, they can easily switch to another supplier or producer, without any barrier. In this market scenario, there is no space for complacency.

This is the time for organizational metamorphosis.

Am I talking about an unheard-of phenomenon? No, across the world, many organizations are following these norms already making them successful, at a time when many enterprises succumb to macro economic factors. But it is an unheard-of phenomenon in the Middle-East, which boasts its oil wealth and distributor's monopoly. Here businesses overlook the measures that are often used in competitive markets to get an edge over competition. However, the recent economic crisis and the economic meltdown has clearly shown that no one is fool proof. Therefore, sooner or later, in a hard way or proactively, all the enterprises will have to adopt these changes to sustain in the market. So what are the changes?

Cost Efficiency - Hundreds of workers were asked to leave organizations at the time of recession. Markets were over flowing with job seekers. When a crisis strikes, this is the first thing that happens in an organization - severance of jobs. The top management focuses on cutting costs as the first measure. The need for such drastic measures occurs because management do not proactively focus on cost reduction measures. Cost reduction makes organizations lean. A lean organization which is always finding ways to reduce its cost will never come to a situation when it has to take extreme measures in cutting costs. They are agile to counter and adapt to market scenarios.

It is time for enterprise management to bring their balance sheet under the lens and ask themselves - where is the extra bulge in the organization and how can they reduce it? There are three pronged benefit to this approach. Firstly, the organization will reduce its costs. The balance sheet will be healthy all the time allowing it to spend the surplus on organizational growth strategy (which is anyway lagging behind in Middle East). Secondly, this will allow the enterprise to pass this cost benefit to its customers thereby having a competitive edge over other market players. Usually this point is ignored by most organizations when they are formulating their goals of cost reduction. The benefit must be passed to customers. Finally, this will protect the organization from the rainy days. They will not have to take drastic measures when the market is shaky.

Value Creation - The lean organizations with reduced costs and simplified work processes are better adapted to create value for customers who are already overwhelmed with the choices the market has to offer. There has to be a differentiating factor when the customer has multitude of choices in terms of products and prices. These differentiating factors can be quality and experience. As an example, we choose to go to one restaurant where we find the quality of food and the service offered by the staff is good, while there is always a choice of many restaurants. If there are two restaurants with quality of food at par, we choose to go to the one which has better customer service and ambiance. The same goes for all other industries. As for the IT industry, many enterprises can provide an ERP or a CRM. There are a whole lot of vendors with the products to meet all the requirements of customer segments in all scales and verticals. However, the differentiating factor can be the quality of service offered along with the product.

Collective Participation - Usually the goals of cost efficiency and value creation are management goals and remain management goals. Employees are not part of this goal seeking process because such decisions are made in closed board rooms and never come out to the employees. When employees are unaware of the cause itself they cannot appreciate the importance of the goals that are set for them. So where does the buck stop? With the management. If management wants a programme to be successful they need to communicate the goals, the reason why management is seeking to achieve the goal and the modus operandi to all the employees in a transparent manner.

Perseverance - Identifying the goals and the call for participation as described in earlier points are only the initial steps toward success. Success is hard earned. The ultimate challenge is to continuously persevere till the goals are achieved. In the business environments there are many digressions, which derail internal projects. Priorities keep shifting. It is important for the management to keep the momentum going till Cost Efficiency, Value Creation and Collective Participation are absorbed in the organization's culture because these are the backbone of organization. The recommended approach is to make these goals internal projects with specific timelines and seek new goals upon successful accomplishment.

The market fundamentals remain same. The customer is seeking value for money. Those who provide high value for a competitive price will survive.

With every passing day, new players come into the market, newer and better technologies emerge, making the market more competitive. If the enterprise today is not agile it cannot withstand the fierce competition for too long. It is the survival of the fittest. Fit is lean.

Hemanshu Joshi is an IT professional with 11 years of experience in Organizational Strategy, Presales, Project Management , development and implementation of Information Technology software solutions and consultancy projects. He blogs at http://hemanshujoshi.blogspot.com

2465 days ago
Vinod Mehra

Brilliant analysis, hitting right on the nail.

2478 days ago
Kiran

Nice article Hemanshu..Keep it up!

2478 days ago
Neeru

Nice compact article Hemanshu!....Slowly but surely, integration with world economy will force Arab countries to rethink their strategies..but that will happen only when oil wealth gets evenly distributed across the world!

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