Organizational Need and Decision Making.

Here is another one, that I am sure some of you can relate to.

IMPACT

Couple of years ago, we received a consultation request from a company. After initial research done by my team, they forwarded the polished information to me. Company was looking for ways to grow faster. Genuine request. We discussed it internally for clarity and engagement readiness. Before we take our next step, I planned a short meeting with the CEO. I learned that the company invested in good talent by offering the above market packages and benefits. Exec team also developed a positive and happy culture. Company is keeping up to date with technology. But the company struggled to succeed in achieving it's goals. This being our first meet, my role was to listen, seek to understand and most importantly, connect. As a closing remark when I mentioned that we have dealt with similar situation before and we can also help with this one. It is then I saw a pleasant smile on chief's face, "Yes, I heard. Looking forward to".

From the discussion, I realized that revenue, returns and growth targets were missed in consecutive 7 quarters despite of the efforts of cost reduction, tighter governance and intense sales and marketing efforts.

ROOT CAUSE

Rest of the week, we developed the strategy and submitted the proposal. It included some assessments followed by a recommendation report and review. Eventually they agreed and after the legal foundation put in place, we started. While checking financial data, I noticed that operating as well as capital expenses were higher. According to them, that was intentional and the core part of the strategy. Perceived problem was that somehow returns are lower despite the best and efficient resources applied. Fair enough. I took a shortcut and decided to investigate business structure and processes first. Sent the team in to work with clearly identified counterparts and collect observation data. Internally, the initiative was labelled as a routine external audit. In parallel, I got access to the organizational chart and historical financial details. Something didn't add up with these preliminary checks. I called the chief asking what happened 3 years ago, chief said they introduced two new business streams with additional products to expand for growth and suggested that it was and still is a right decision backed up by marketing research data analysis. Chief also indicated that the issue on hand is organization wide. By this time, we already had a good rapport. I showed my interest in looking at the business areas a bit deeper. Chief advised to keep things positive, low key and well informed. I agreed.

I discussed with delivery leads and my team engaged with SMEs in each of the business areas. I kept this entire effort aligned to two focus areas. 1) Organizational changes in last 3 years, 2) Delivery efficiency. In summary, we learned this. Chief joined 3 years ago and in pursuit of faster growth, introduced two new business streams starting with minimal setup. Existing processes, governance, policies were initially carried forwarded to new business areas with small changes. During 3 years, although in both of these areas many changes were made, but overall, business structure wasn't quite optimized for the fundamental need of each area. In executives' efforts of improvising efficiencies, the existing business area which was working well earlier also got affected, whereas it did not quite help the newly introduced two areas. Marketing claims were real and executive decision was also right and timely to take organization in the direction where future of the industry is heading by expanding business in those new areas. However, without the foundations of the two newly introduced areas stabilized first, too much investment went in, which further diluted the strength of the existing area, which otherwise, was doing well three years ago. And yes, the skilled and well-paid staff knew the required changes and ways to improve efficiencies of their own areas. Although, the continuous changes happening throughout, with a sense of hope, their voices didn't go too far. And because the things were working out anyway, though at lower efficiencies, after some call outs, they too became part of the system. In other words, there was no robust process of feedback and control loops.

REPORT

After meaningful revelations about the situation, we still needed concrete evidences. For the next three weeks, team processed a large set of data and modelled cause and effects. We demonstrated with evidences, how with specific changes the goals of current strategic plan be achieved through current strategic cycle. I submitted the report to the chief. Report included recommendation of structural changes, some role changes, process changes and some infrastructural changes. Report also showed the cost benefits analysis for the recommended change. Costs outweighed by the benefits of cost reduction, ROI improvement, revenue gains and overall efficiencies achieved.

RESISTANCE

Post report submission, during the review meeting, we met strong, albeit anticipated resistance. Every part of the report got questioned. I personally enjoy such due diligence from counterpart. We responded positively by satisfying their clarifications with substantiated facts and data. Eventually, the chief made the call and asked if we can deliver the required change and claimed benefits within the cost range claimed in report? When I responded positively, chief asked us to send through the proposal for their review

CORRECTION

That evening I received a call from one of my BD asking, "How did it go? Are we on for the delivery too?". Actually, during our earlier discussion I had given him a hint about a possibility of the company asking us to deliver the changes proposed in report, that can help achieve their business goals. From our consulting business point of view, consultation revenue was tiny part and project, program deliveries had major share. Although, I had implemented strict practices of not pushing for the sales of these more lucrative services during any consultative service delivery. My experience is that generally there is no such need. When services are delivered with utmost professionalism, due diligence and high quality standards, meeting the requirements of the business client, then client normally makes easy decision, sensing that our team came in with absolute clarity, rigor and brilliance, something they can make use of, to achieve their goals. Which will also not affect?their ongoing organizational priorities avoiding extra load of the required change delivery. And there is no guarantee they may get it right or do it better than us. I responded to director saying, "Yes, we will send through the proposal in a couple of days". Director laughed, "Can't be done any better. Can it?".

During the next couple of days, my teams put together a detailed SOW with a proposal and sent through. Got a call from the chief to sense the level of confidence and firmness of the proposal. We priced strategically. Majority of our revenue came from existing customers at the time. And most of our new business clients came from word of mouth despite the balanced advertising efforts. I responded, "We prefer to move fast through sales efforts. Run internal negotiations and establish best win-win zones of either party and decide most balanced pricing. We are committed to your success". And we both laughed for a change. I added, "We keep it reasonable. I can imagine the feedback you would have received about us. Allow us to create another one to reach other business". "Alright, leave it to me then", chief concluded. Things went fast track and their contracts team sorted things quickly.

For the next three quarters, we planned and delivered "mini business transformation" program with multiple components managed in parallel by my delivery teams. Critical path was established and teams delivered on time. Which was not a surprise because we specialized in projects and program deliveries.

OUTCOME

Our proposal included three months post support, during which we maintained oversight and ensured the expected performance. When the results came out, cost reductions and returns targets were met, due to reduced costs. Revenue target was missed for the quarter, but that was forecasted by us to be achieved 2 - 3 quarters later. Chief was happy with the outcome and overall engagement. After all, results were consistent with our original claims.

CONCLUSION

There is always one most optimal path to go from point A to B. In reality, such an ideal path is almost impossible to achieve. In a highly dynamic business environment, often it is difficult for the executives to stay any closer to the optimal path. Even the most successful businesses go through many hits and misses, taking a near ideal path possible for them to reach B (vision). Agility is important because there can be innumerous potential factors that can affect organization's ability to succeed. Understanding what the business need is and what decisions are required to fulfil that need remains quite critical. Strategic plan that is disconnected from the organizational reality, strengths, weaknesses and risks, is likely to struggle.