Business Reforms
'Turbulence is a friend'- says Jim Collins, the famous management guru
Management guru Jim Collins after conducting an in-depth research of a
large number of companies has come out with several starting revelations
on how great companies thrive in recession times.
Jim Collins, who wrote such business columns as Ⴕilt to last⠡nd ᇯod
to great⬠has come out with a new insight on the success achieved by
companies in good and bad times. He is now fully engaged in researching
on how great companies thrive in turbulent times like the one we are facing
today. Some of the characteristics highlighted by him are discussed below.
One of the fundamental values that great companies have is that even in
times of uncertainties they have deep moorings, a set of values or underlying
ideals or principles that explain how and why they exist. Names like P&G,
GE, and IBM, some of the world class companies have a deep sense of value.
They practice what they preach in terms of the products and services they
deliver. They build their reputation on quality. Even when under pressure
to cut corners by using cheaper ingredients, these companies never compromised.
The real principle is that they actually have core values 栮ot what they
are. Greater the challenge, greater is the faith in their core values
which they preserve continuously overtime.
The second aspect about such companies is that they rely on their human
resources and they recognise very well the caliber of their people. In
difficult times, they would rather recruit to enhances their stock of
talent than resort to layoffs. HP for example after world war-II hired
engineers who got laid off, to use their brains.
The third dimension of long lasting companies is that those companies
really think long term and they manage for a quarter century and not for
just quarterly results, which the stock market fanatics look for.
The fourth dimension is the cultural environment these companies breed
in house. As opposed to tight management controls, these companies having
hired the best of the brains allow them complete freedom to manage themselves.
The right kinds of people donⴠthink that they have a job, rather they
have responsibilities. In difficult times, results are their responsibilities
and those people do not blame just the external forces for their not so
good performance.
In an era when U.S. businesses continuously thrived from 1952 to 2000,
there are Americans, who have never even seen any kind of challenges that
we are witnessing today. However when the times are tough, the tough companies
get going. A case in point is of the South West Airlines, which has managed
itself in good times as if they were in bad times. Those companies have
a sense of discipline to grow slowly, which means while the market forces
may demand to grow at 50% and beyond, they decide actually to grow at
20% or less, as your focus is on a quarter century and not just the quarterly
results.
Jim Collins advice is not to get panicky in a moment like this, otherwise
those who panic will die on the mountain. One can go down and survive
and yet come back another day. One has to have the combination of believing
that you would prevail. The idea is to recognise that being in this for
a long time, one just turns this into a defining event to make the enterprise
much stronger.
Sure enough the tough times do not last for ever. Lesson is to accept
what is in front of all of us, strategize now for a quarter century, develop
management practices, for the corporations, governments or any other organisation
accordingly for the long term, rather then focusing on one to three years
time frame.
There are some great lessons for Indian corporates, which went on an expansion
free, overseas buyouts and earned fat profits for a few years in boom
times. Now they are crying out for government help. If Indian corporates
practiced what Jim Collin has to say, or even defined just one strategy
out of several pointed out by Jim Collins, the face of businesses will
change and they can deal with the cycle of booms and busts much better.
Outsourcing: Villain of the piece? (An article published in Economic
Times dated 31st January, 2009)
http://economictimes.indiatimes.com/Comments__Analysis/Outsourcing_Villain_of_the_piece/....
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