an icmr-iipm think tank publication - Cycbth.org

TCOVER STORY
he Dodo, a flightless bird found in Mauritius islands in
the Indian Ocean, became extinct 200 years ago. It had
an unfit structure and was unable to fly. Till the time
the island was isolated, they survived. But once superior
species like human, pigs and monkeys appeared
there, the existence of the species was endangered.
Eventually, it failed to evolve with change in surroundings,
weather and became prey to other species. This
one species is apt representation of 21st century’s lumbering
and stubborn examples that are reluctant to
adaption in complex changing business environment
and thus get extinct in no time.
Constant and revolving transformation is the motif
of the corporate world today. Outrageously high target
for revenues and market share, a bold vision based on
a striking business model or groundbreaking technology,
major strategic moves like acquisition, joint venture
or merger – are deemed to be quintessential for the
sustainability of a company in the long-run. In fact,
change is all around us, increasing in velocity and driven
by myriad external, internal, evolutionary and revolutionary
forces.
Contrary to the traditional belief, no organization is
immune. All companies go through a turbulent time
which might be due to change in the marketplace or
technologies or economic condition or introduction of
substitutes or due to stiff market competition. At such
situations, coping with this turmoil is the key to remain
competitive. One of the detrimental factors of successful
transformation is timely interventions of various
change programs as any delay may prove to be too
decisive to resurrect from downward spiral. However,
any such blow does not come without any early omen.
The key would be to spot these financial, operational
or market triggers early and should be dealt with properly.
In the words of Caroline Schoeder, “Some people
change when they see the light, others when they feel
the heat.”
Once the need for change is realised, you need to examine
a company very broadly before determining what
really needs transformation and what merely needs intensifying
or modification. If a company is not performing
well does not necessarily mean all the processes are
imperfect but only implies that they do not execute the
important things with enough intensity. Even highperforming
companies do many things imperfectly. Any
change program with more than one page manifesto is
bound to fail. Therefore, the eventual path of action
should be narrow. While the exact nature of transformation
is specific to each company, most change programs
count your chickens before they hatch 18 april 2012
include specific parameters like debt reduction, cost
control, profitability measures to name a few, that defines
the success of the program. For example, return
on net asset became the metrics to measure successful
transformation at Staples – a US-based company dealing
with office supplies. However, going against the wind
some companies did not officially pronounce any formal
transformation program but they made such sweeping
changes that it became obvious that a change program
is under way – PepsiCo is a case in point. When Pepsi
experienced an inflection point, they quickly sold off
the restaurant business in 1997 and divested its bottling
assets in 1999. Then they acquired Quaker Oats Co. and
South Beach Co. making the intention of diversifying
into health-food business crystal clear. In fact, since
2000, Pepsi has heavily invested in its international operation
and saw its revenue getting doubled since the
start of the operation.
As a matter of fact, there is no all binding scientific
formula of how transformation should be done. Employee
resistance is one of the main reasons behind
unsuccessful change processes. To eliminate resistance
four basic conditions need to be fulfilled.
Firstly, employees must see the point of change and
agree with it. You need to have a compelling story with
a balance of both positive and negative aspects to generate
real energy. On the one hand, a story focused on
what’s wrong invokes the ‘blame game’ and fails to
evoke and engage people’s passion and experience. On
WE NEED TO EXAMINE A COMPANY BROADLY BEFORE DETERMINING WHAT
REALLY NEEDS TRANSFORMATION AND WHAT MERELY NEEDS INTENSIFYING