The HBR article in mid-2019 had observed "Many economists are forecasting a downturn, if not a full-blown recession, over the next 12-24 months. Leading indicators have softened in many countries, stock markets are volatile, and several risks cloud the horizon. If history is any guide, many companies will prepare too little, too late, and too defensively." Seldom are businesses allowed to plan for unexpected downturns; be it recession, hostilities, or something as unexpected as the COVID impasse.
"It can't happen to us!". Routine happenings render an expectation of infallible continuity. Expectations of Status Quo and Continued service of key people are taken for granted. A false sense of security starts to cloud one's judgment w.r.t the right way of dealing with such situations.
Sensei Masaaki Imai (Founder of the Kaizen Institute) had commented: "The future will not belong to companies that plan for only growth. Rather, it will belong to those companies that have a supply chain that is capable to meet fluctuating demand". Becoming agile, become Lean - across all functions, across all levels is an effective solution to shockproof one's business from sudden downturns.
• It always makes sense for a company to be perennially lean; Lean in thinking, Lean in manning, Lean in supply chain and Lean in manufacturing. Doing all needed to keep inventories low, Lead Times low, constantly engage and delight customers, keep innovating to ensure loyalty, etc…are key traits that will ensure that a good company is held in good stead, even when the going gets bad.
• Taking the argument further, Lean thinking should help identify those resources (Material and Manpower) that adds value, and appropriate actions taken on that which doesn't add appropriate value. This thinking has to exist across all levels...right form the Board members to the shop floor worker.
• Implementing Lean has yet another challenge. Poorly planned and knee jerk cost optimization initiatives result in employee unfriendly acts such as salary delays, denial of bonuses, denial of basic budgets to motivate employees. The ones who are competent, leave and this is a loss that cannot be easily made up. Once demand picks up, it becomes the most significant gap that causes maximum damage to the DNA of the company.
• Lastly, and possibly the most difficult part of implementing Lean - Does the leadership commit to introspect on 3 things and possess the courage to do what is needed thereof?
1. What are the reasons for the present state of affairs and who can be termed as responsible? What internally has gone (been going) wrong?
2. What needs to be done about it? Is it a leadership issue? Have strategic directions and decisions been correct? If not, why?
3. Can we evolve an implementable road map to ensuring that learnings from the past are tailored into the future and that such waste is not repeated? Can there be a road map evolved to identifying non-value adding Holy cows within the senior management and chart a path to maximizing relevant competency?
Of particular concern can be the obstinacy of the top leadership to bring about the change in themselves, by realizing that they have been a part of the problem and need to increasingly involve competent & deserving juniors, rather than give themselves chance after chance in futility.
"It can't happen to me" has to give way to "Hope for the Best, But Plan for the Worst". Adequate actions and sufficient precautions should be taken to ensure that the core team is intact.
Raghavendra Rao, Partner & CEO at KAIZEN™ Hansei LLP
About KAIZEN™ Hansei LLP
A Series of Comprehensive and Inclusive Programs, aimed at Managing the Transformation of Businesses Delivery Chains that makes them Future-ready. Most intervention engagement models eventually merge into a Rewards and recognition forum; Objective being to maximize and channelize Employee Involvement towards important Management Objectives
KAIZEN™ Hansei is brought to you by professionals who have successfully established such programs. It is a strategic partner of the Kaizen Institute, India, and complements the transformational initiatives undertaken
About Kaizen Institute
Kaizen Institute is the original and premier provider of KAIZEN™ services of Change Management, Business Excellence, Operational Excellence, and Lean.
We support companies of all sizes in all market segments, providing them with a sustainable, competitive advantage. Our Vision is Improving the world with Everyone, Everywhere, Every Day – The KAIZEN™ Way. “KAIZEN™ means Change for the better.”
Kaizen Institute is a global organization that provides consulting and training services to companies represented in Europe, the Americas, Asia-Pacific, the Middle East and Africa. We are currently operating in 60+ Countries for 35 years.
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