Management Challenges In Turbulent Times

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In this highly competitive world, and in Global meltdown situation,Darwinian Principle of “ Survival of the Fittest ” will prevail.

It is, hence, imperative for MSMEs to be fit.

Also Big fish eats up small fish, if she does not protects itself.

Moreover in bad times, Weak is hitted hard.


Individually, MSME may feel weak andVulnerable, but collectively,they are very strong !Collectively, they contribute 48 % of total industrial productionand 40 % of total exports !!

However, in this slowdown, their output have reduced 2 % in current fiscal.

More and more units are getting sick.

Challenge is, how to regain previous health.


• Management is doing things right, Leadership is doing right things.

First things First – Lets understand Management and Leadership

In other words,

• Management means implementing things rightly, Leadership means conceptualizing right things.


Strategy is about long term future of an organization based on a deep analysis of what a company’s competencies really are

and then

What is Strategy ?

Strategy is undelegable function of top leadership.

a creative process of finding external opportunities to encash those competencies to create a competitive advantage.


Tactics, as opposed to Strategy, is near term actionsto solve specific problems or accomplish specific goals.

What is Tactics ?

Its planned and ad hoc actions are meant to meet the demands of the moment.

Strategy is designed by leadership , While tactics is actions implementedby management to achieve strategy.


• Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. Sun Tzu

• All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved. Sun Tzu

Strategy or Tactics ? Are they relevant to us?

Both Strategy and Tactics are required.They are like plan and implementation.


• Strategy is a long term future perspective of an organization, hence you have to visualize where do you want to be, and how you reach there.

i.e. Vision, Mission and Values ( VMV )

• Before undertaking journey, one has to understand where one is currently.

i.e. SWOT Analysis ( devised by Albert Humphrey )

Tools and Process of formulating Strategy


Strengths and weaknesses are internal to an organization, while opportunities and threats are due to external environment.

SWOT

To fully understand the external environment, one has to analyze it by –

PESTLE Analysis and Porter’s 5 Forces Analysis


• P = Political environment and changes,

PESTLE Analysis

• E = Economic ( local, national and global ) environment and changes,

• S = Socio - cultural environment and changes,

• T = Technological environment and changes,

• L = Legal ( Regulatory ) environment and changes,

• E = Environmental ( Ecological ) framework and changes,


Porter’s 5 Forces Analysis

One has to understand the impact of new entrants, substitute products, buyers, suppliers & competition.


After understanding oneself ( SWOT ) and deciding on where to go and how to go ( VMV ) , the next step is to translate the vision into Strategic Plan.

Strategic plan has necessarily 2 components,Short Term and Long Term.Both of these run concurrently.

Strategic Plan


The strategic plan is implemented through SMART short and long term goals.Both of these run simultaneously.

SMART = Specific, Measurable, Achievable (with a stretch), Realistic and Time bound.

The tool to implement Strategic Plan is Balanced Score Card ( BSC ) devised byKaplan and Norton.


I do not believe you can do today's job with yesterday's methods and be in the business tomorrow.

~ Nelson Jackson


MSMEs have to change their ways to be in business, Both in short term ( tactics ) as well in long term( Strategy ).


• Do not shut the shop. It is very difficult to restart in standstill position, as well losing customers.

Short term ( immediate ) measures - 1

• Keep your financial position healthy within your repayment capacity.

• It is better not to borrow. If you have already borrowed money, replace it with cheaper loans. Central, state Govt. & banks have sch. for MSMEs.

• Key skilled staff is your valuable asset. If you lose them, it is very difficult to regain them.


• Keep your wheels moving. Fulfill your order book obligations at any cost. This is way to build loyalty.

Short term ( immediate ) measures - 2

• Try to work at maximum possible capacity, even taking outside job work.

• Relook at your costing for raw materials, processing, inventory, sales and marketing costs, interest etc. and find out improvement opportunities.

• Keep your staff skills battle ready by training and retraining. This will also keep their morale high.


• 5 S : This will surface the problems and reduce inventory and release resources,

Tools for immediate use

• SPC ( 7 QC tools ) : This will help you to analyze your costs, cycle time, process efficiency,

• COPQ : This will provide tremendous opportunity for cost benefits, without sacrificing quality. ( Nearly 30% of cost is due to various wastes )

• Benchmarking / Best practices : Learn good things from others to improve cost, cycle times, efficiency


• Process approach : Map every process and simplify to reduce variations, waste, cycle time, e.g. ISO 9001

Near term strategic tools

• Systems approach : No processes are stand alone, all are interlinked. Adoption will enhance value.

• Have long term philosophy : Do SWOT analysis, identify and grab your opportunities , define VMV collectively and work on goals as a team.

• Multitasking / Cross functional teams : Train your key staff in other functions, handle projects by CFTs.


ISO 14001

OHSAS

18001ISO 9001 etc.

TQM,TPS,

WCM,TPM,Six

Sigma etc.

National

QualityAwardsBased

onMBNQA

,EFQMand

Deming

Award

Build your capabilities by Systematic approaches . .

Tools like5 S,SPC,

COPQ,PDCA,Best

Practices

Etc.


Wish you all the BestThank You

Management Challenges In Turbulent Times

Business

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