Released by: The Edge
Date: 23 July 2007
As Malaysia celebrates its 50th year of independence, we have great cause for celebration. Nevertheless, our proud and impressive record of accomplishments should not lull us into complacency.
The key to successful growth of companies and organisations, and ultimately the nation, depends on our strategic focus, and how effectively and efficiently the various capital or factors of production are managed and optimised. The Ninth Malaysia Plan has identified human capital development as one of its main thrusts. The aim is to raise Malaysians' capacity for knowledge and innovation,
cultivate a strong maintenance culture, an exacting mindset with `first class mentality' and build our talent pool.
Both private and public sector organisations must also increase their productivity abd competitiveness through enhanced competencies and innovativeness. They must strategise to identify entrepreneurial opportunities to grow their business and stay ahead of, or move away from, "red ocean" competition. As authors W. Chan Kim and Renée Mauborgne write in their book Blue Ocean Strategy, organisations
can succeed in making the competition irrelevant through value innovation and in doing so, create sustainable organisations.
Sustainable Organisations
The rule of sustainable organisations encapsulates interpreting and articulating the organisational purpose, and ensuring that purpose is clearly understood and adopted. Each sustainable organisation has a unique purpose and principles/values that reflect its mission. The fundamental purpose of the sustainable organisation is continuing business growth, profitability and maintaining resilience to
meet present challenges and, adapting for the future.
In theory this is understood but unfortunately, many organisations have become victims of their own success, especially when unchallenged legacy practices set in. Robert Herbold, former COO of Microsoft Corp, in his recent book Seduced by Success contends that many organisations fail to recognise nine common "traps":
Trap No. 1 - Neglect (sticking to a stale business model);
Trap No. 2 - Pride (failing to revamp a stale brand);
Trap No. 3 - Boredom (resulting in customers switching to competitors, especially consumer brands with low switching costs);
Trap No. 4 - Complexity (ignoring your business processes as they become cumbersome and complicated);
Trap No. 5 - Bloat (losing speed and agility in business processes);
Trap No. 6 - Mediocrity (under utilising talents and condoning poor performance);
Trap No. 7 - Lethargy (lulled into a creature of comfort, casualness and confidence);
Trap No. 8 - Timidity (hesitating in tackling thorny inter-functional and inter-office relations); and
Trap No. 9 - Confusion (breakdown in dissemination of information).
My experience in turnaround management suggests the inclusion of a 10th "trap", which is "Lost" (out of touch with reality or having lost the context in which the organisation operates).
Therefore, it begs the question: "What are the means and actions required to overcome these inherent traps which organisations and a nation can succumb to?"
MANAGEMENT INSIGHT #1: TAKE CARE OF, BE FOCUSED ON CRITICAL KEY SUCCESS FACTORS AND DO NOT REST ON PAST SUCCESSES
Past success do not guarantee future success. When a business model or technology paradigm shifts, everyone goes back to the starting line. Hence, organisations must develop distinctive competencies, pursue excellence and constantly seek innovative ways of creating value and utility for existing and future customers.
MANAGEMENT INSIGHT #2: EVOKE BRAND DESIRE AND AFFILITATION.
Continuous reviews of its brand value and its relevance to the market will keep it from becoming stale. Adapting to change, be it due to cultural sensitivities or something as simple as a new fad, will help keep up the appeal of the brand and strengthen its market presence.
MANAGEMENT INSIGHT #3: BE UNSATISFIED WITH STATUS QUO AND TAKE IT TO THE NEXT LEVEL
Practise continuous improvement and innovation in all operations to take it to the next level through increased value or buyer utility. This benefits both the organisation and customers. Product or service innovation keeps customers enthusiastic, with no reason to turn to your competitors. In a rapidly evolving world, innovation is the key to sustaining success.
MANAGEMENT INSIGHT #4: KEEP THINGS SIMPLE.
Cut down excessive red tape to create better organisational workflow and offer more responsive customer service. Reduce reporting layers to speed up time-critical decision- making. Be uncompromising on continuous improvement in operational aspects and service behaviour.
MANAGEMENT INSIGHT #5: BE SPURRED ON, NOT SLOWED DOWN.
Overstaffing and underperforming staff can be a common problem in growing organisations. As companies invest more in human resources, the problem of finding enough jobs to cater for excess staff may lead to additional delegations and create splinter groups, with each having their own bureaucratic decision makers. All this with no interlinking within departments turns a mere information retrieval
task into a full-blown project!
MANAGEMENT INSIGHT #6: WEED OUT THE WEAK, CHALLENGE THE HEROES.
Recognise the brilliant and potential high performers; challenge and engage them. Often, these talents will rise to the challenge and adopt new competencies and skills. This benefits both parties - they gain more experience whilst you gain more valuable and talented employees. However, consistent underachievers must be addressed through performance review and counselling; if performance cannot be
enhanced, then de-selection may be necessary.
MANAGEMENT INSIGHT #7: REINVIGORATE AND MAKE LEARNING EXCITING!
Inject some excitement into the organisation; assign different roles to the talented. One notable company had its CFO and COO swap roles. Both emerged with invaluable experience while the organisation gained more versatile leaders. Executing the same repetitive tasks daily can lead to sluggishness and indifference.
MANAGEMENT INSIGHT #8: IMPROVE INTER-FUNCTIONAL AND INTER-OFFICE RELATIONS.
Confidence in tackling inter-departmental issues boosts morale. After all, people are the movers of a company. When matters are dealt with in a professional and equitable manner, people feel better and can perform their best.
MANAGEMENT INSIGHT #9: BE CLEAR, CONCISE, AND CORRECT.
Ensure that communication and dissemination of information is clear, concise and correct. Ineffectiveness in relaying important information or transmitting wrong information leads to serious consequences. People must have a shared understanding of the challenges and progress of the company.
MANAGEMENT INSIGHT #10: TAKE PROACTIVE LEADERSHIP IN RE-SETTING THE STRATEGIC DIRECTION
As the business adapts according to external or internal drivers, the organisation might unwittingly stray from its true mission. Thus it is important to proactively keep the organisation's strategic profile (value curve) and bearing in check. Organisations go astray often because leaders lose sight or fail to steer them in the right direction amid the changing winds of competition and change in
business models.
Creating a sustainable, resilient organisation or nation doesn't happen overnight. It takes strategic focus, political will, alertness, hard work and perseverance, with an understanding of the "traps" of organisational decline and their corresponding remedies. Organisations and nation that recognise, respond and adapt to changes to avoid the success complacency traps are sustainable institutions
which will stand the test of time.
Dr Wilson Tay is CEO of the Malaysian Institute of Management, the national management organisation of Malaysia. MIM invites companies and professional managers to be members. Contact MIM Membership Support and Outreach at (603) 2164 5255; fax (603) 2165 4681; e-mail:enquiries@mim.org.my or visit www.mim.org.my
