Knowledge Management - Guide to Lean - Case Study Example

Knowledge Management “Change is the only constant in the world”. This cliché is applicable not only in our lives but also in our surroundings. Change is one of the major key success factors, which accounts for the very existence of any big or small organisation in any industry. Recent global economic slowdown is a wonderful example which goes to prove the importance and value of change in the corporate. Organisations which maintained the notion of diversification and innovation survived the heavy storm of recession. Change is not only confined to one aspect. Rather, here change should be related to the overall system. In other words, change with regards to the 3 most important P’s : People, Process, Product. It is like re-inventing the wheel. The processes followed need to be constantly monitored and changed accordingly. In fact, in this changing world, organisations must reinvent themselves in order to survive. In other words, the jungle rule applies in the corporate world as well, the only difference being that here in the corporate- Only the fittest to reinvent survives! Change can be associated with restructuring the organisation or in other words channelling resources towards innovation. The reasons can vary from a cultural shift to cutting costs. Other reasons for a change can be to promote growth or to bring about a shift in the strategic focus. In any case, reorganising is nothing but making structural changes in order to pursue better performance. The conventional belief that performance is determined by the scale, nature and disposition of resources stands true but there is another important factor which influences the performance of any organisation. It is Decision making. The restructuring of an organisation should be such that its leaders can make the best decisions which would result in better innovation over a course of time. The best way to enhance the performance of an organisation starts by focusing on the major decisions to be made by the authorities. These can vary from decisions made so as to offer best services to the customers (in order to retain the customers) to controlling costs to managing receivables. It totally depends on the level of competition faced by the organization. Once the key decisions are identified, the next step should be to identify where in the organisation those decisions are to be made. In other words, which departments or individual accounts for or is responsible for a set of decision making tasks. Thereafter, the restructuring should be in such a manner that it should be around sources of value. Sometimes responsibilities that are too broad result in insufficient supervision and limited accountability. If the responsibilities are too narrow then it may result in overstaffing and complexity in the hierarchy. Hence it is imperative for an organisation to appropriate the allocation of responsibilities. The next step is to identify exactly what authority the decision makers need, regardless of their organisational status. The focus needs to be on the effectiveness of the authorities in making good decisions. Generally, the authorised persons have to take approvals from the regional heads and senior management, which in turn delays the execution of such decisions. This means that the organisational structure needs to be simplified to a level where in the layers of middle management are eliminated and hence some operations are centralized. This would help the organisation two folds: One, it would reduce the overhead expenses incurred. Two, it would speed up the decision making process which has a direct effect on the performance of the organisation or in other words meeting the organisational goals within the stipulated amount of time. Many times, when the environmental conditions change, by the time the decisions are executed, they results are left worthless. Hence, reducing the time of execution of key decisions is a must. Once the decision-execution time is reduced, the focus should be bringing about changes in decision roles, information flow, incentives, performance metrics and processes. All of these need to be aligned to better decision making. This means that after restructuring, the different departments of the organisation should be assigned specific decision roles so as to increase accountability. Incentive and other performance enhancing measures need to be reset so as to encourage collaboration across various departments. The last and the most important step is to help the employees develop the skills they need to make instant decisions and convert them into action on a consistent basis. The behavioural change in the employees of an organisation is therefore very important and hence fruitful investment should be made to ensure that people have the skills required to be better decision makers over a course of time. The above mentioned steps are shown in the following diagram which is also a representation of the best practices to be followed in order to achieve organisational restructuring which is aligned with the decision making process. [HBR (2010) issue] Fig. Restructuring an Organisation One of the ways of getting to know whether a change is required is to fill the following questionnaire:- SD D A SA 1 Our structure is aligned with the major decisions to be made 2 People are aware of their individual roles and responsibilities 3 Processes help in faster and effective decision making and implementation 4 Authorities who make the decisions have the information they need 5 Our measures and incentives are focused on driving decision making ability 6 People understand the priority of which decisions to make and when 7 Decisions made in the organisation are effective 8 The most important decisions are made by the best people 9 The leaders at different levels show effective decision behaviours 10 Work culture is in line with a speedy and effective decision making Here, SD= Strongly Disagree= 1 D= Disagree= 2 A= Agree= 3 SA= Strongly Agree= 4 If the total score is: More than 35= Healthy Organisation 31-35= Good but can improve 26-30= Some organisational challenges need to be addressed 10-25= Major change is needed Our study reveals that the total score for the tabloid would be = 24 Thus, it is imperative for the tabloid to bring about a structural change in line with decision-making Five Why Analysis/ Root Cause Analysis When an organisation is on the verge of restructuring, it is imperative for the managers to not only focus on the major problems but also on the causes of such problems. In order to find out the root cause of the problem, the simplest method is to carry out a five why analysis. (Flinchbaugh and Carlino) (2006). There can be N number of reasons or causes which result in a problem but in the end every problem has one root cause. Hence the need for an analysis to find out the root cause of a problem statement becomes imperative for any organisation. The five why analysis is depicted in the following diagram:- Fig: Five Why Analysis to help in taking corrective measures in restructuring the organisation As evident from the above diagram, a five why analysis is carried out in order to find the root cause of the problem statement- A recent survey shows that my organisation is ranked 3rd in the industry and is continuously slipping. The root cause of this problem is finally indentified as the inappropriate incentive plan for the sales team which has resulted in demotivation and high attrition rate in the sales department. Hence, the quarterly sales figures and targets are not achieved. As the sales/revenue went down, the monetary power to invest in innovation also went down, which in other words meant that proper and adequate budget (resource) allocation could not be done to the Research & Development department. Analogous to the tabloid’s performance, this five why analysis can be applied to find the root cause of the tabloid’s debacle. When the other competing dailies and other print media were breaking records in terms of sale, the tabloide was losing its market share. Though there can be many causes for the downfall such as weak distributor-tabloid relationship, conventional and orthodox writing style, mundane work culture etc, the root cause of this debacle could be associated with the incentive plan/other motivational factors for the employees. The flair for writing is also linked with the monetary and non-monetary benefits. Hence it becomes imperative for the management to restructure the organisation in such a way that it brings a change in the attitude/behaviour of people, boosts the motivational levels of the writers which would in return result in more creative and innovative style of writing, a more simplified hierarchy so that decision-making process consumes lesser time, results in stronger and lasting relationship with the distributors and finally a change in the overall impression of the tabloid in the minds of the end customers. Hence, innovation and restructuring of the organisation may apparently appear to be the ways of enhancing the performance, but the major factors which determine the performance and growth of any organisation are addressed in the following section. Key Performance Drivers After pareto analysis and cause and effect analysis (Tague) (2005) we found that most important factors which would effect the overall performance of an organisation are hidden in the following 3 big problems whose solutions would also help in determining when and how to change or restructure an organisation :- The solutions to the above stated problems are simple. Firstly, in order to foster communication and increase the collaboration of different units/departments in an organisation, the best way is to change the culture. People should be encouraged to form informal networks so as to increase communication beyond the limited boundaries of a formal network. Thus, different units would ultimately work on the same page, thereby meeting the common organisational objectives and goals. The second problem’s solution is to make people aware of the current market trends and hence the focus on innovation is essential. The third problem’s solution is proper and precise allocation of resources in different departments, so that a major share of resources is not concentrated in a few units. Thus the three most important elements of performance management are collaboration of different departments of the same organisation, innovation on a consistent basis which would also follow the market trends and optimum allocation of available resources. Fig: Three most important elements to increase performance of the organisation. Capability Development Fig: Flowchart depicting Capability Development Feed Back & Research: - The challenge for organizations is to achieve higher efficiencies is not only new technologies but also productive manpower. The company that develops an innovative environment will find itself with a culture that may become the standard and that company will enjoy all the corresponding advantages of being the first mover. In emerging, high-growth markets, employee preference for flexible environment are governed by local issues and government policy. Proper research and surveys to get the mind set of new generation in all socio economic aspects becomes important. Performance Evaluation: - Workforce dynamics is important. Day by day, requirement of skills are changing and expectations are much more. Now industry is synonymous to high skills, innovation, and advanced technologies. Need based training modules to ensure the optimum talent management is one of the tools. Objective is to deploy the right numbers of employees with the right skills in the right place at the right time. In this regard, skill mapping tools can be useful. Training need should be identified and customize for different employees at different levels. Training needs should be properly documented and updated in individual’s personal file (format is given below). Employee ID Current and Future project Assessment Training Need Project Future Plan Capability Required Capability Available Behavioral training Technical training In-house       Domain-A         Domain-B                   Internal Knowledge Sharing Sessions: - A global workforce will be from different geographies. Knowledge management will require a work force not only armed with technical tools but also with soft skills on priority. Internal training is an effective tool in this regard. The person who gets trained will train the other persons of the team. Orientation & External Training:- Development of skill sets will require not only revision of existing responsibilities but also an insight to see the whole picture differently in a new light. More focused and practical approach is a need of time. Generation Y will form the largest portion of the future working population and will arrive on the job with a unique set of needs and expectations. Training of Top management is equally important. Learn, unlearn and relearn - culture has to be nurtured. Exposure and training of managers in different industries can only bridge the gap between what is right and what need to be right and also to imbibe the best HR practices. Understanding the most important asset —people — and how they will evolve in future is key for both industry and institutions. Self evaluation and introspection for GAP Analysis:- To ensure a performance driven culture in an organization, it becomes imperative to have a mechanism for assessment of how effectively the targets have been achieved. Performance management is the systematic process of, Planning work and setting expectations, Continually Monitoring performance, Developing the capacity to perform, supporting on the “How” perspective of performance Periodically Reviewing performance (Mid Term & Final), and Rewarding desirable Performance. Absolute Assessment During Formulation of performance evaluation tools, the following should be kept in mind: - Are the Target Quantifiers for performance focusing on the following factors? 1-Financial Perspectives: - -Cost Effectiveness: Effective Cost Management & Productivity -Value Creation / Value Engineering 2-Customer Perspective:- -Operational Excellence through Customer Intimacy: CAPTURING End Customer’s satisfaction level followed by INCORPORATION OF FEEDBACK in design phase of process 3- Internal Perspectives:- -Process Improvement: Order Entry to Order Outgo & End to End Fulfilment of Value Stream Innovation: New Product or Service introduction 4- Learning & Growth Perspective:- -Establishment of Enablers for Self & Subordinate Development -Required Behavioural Competencies & Skill Development -Functional Training -Desired Corporate Culture: Core Values driving Performance Target setting should be objective and realistic. Parameters and guidelines to check the performance should be not only be planned vs achieved but also following points need to be considered:- a ):- Fast, Flexible, First Mover:- Business Acumen Decision Making Action Orientation Risk Taking Ability b):- Team Player:-Balances team & individual responsibilities Exhibits objectivity & openness to others’ views Provides & welcomes feedback Contributes to building a positive team spirit Puts success of team above individual interest Contributes individual strengths & maximize team performance c):- Creativity and learn ability Identify trends, patterns, linkages between data and situations Hypothesize and create new models for situations Identify cause and effect relationships Propose tangible solutions to the problem d):- Networking and Partnership. Ability to leverage stakeholder resources Ability to communicate the big picture Ability to work effectively in teams Ability to influence others to achieve results Ability to develop, build and nurture mutually productive relationships Review with mentors at a defined period is a good practice to make the system robust. Feedback is required for bridging the gaps and to take corrective actions. VISION: The way ahead What would be the roadmap set for the tabloid in the near future? This question can now be answered by looking at the various results of our study. In gist, the tabloid needs to make a comeback but there needs to be a certain methodology to be followed. This is done by first addressing all the issues faced by the tabloid and then addressing the gap between the issues and their solutions. We carried this exercise using GAP analysis. Later, we figured out the means of reducing this gap and finding ways in order to enhance the performance. After our comprehensive study encompassing the various facets of performance management, we would like to conclude by looking at the tabloid from both macro as well as micro perspective. Macro- perspective: With this perspective, we treated tabloid as a whole organisation and not just confined to people. This perspective helps in identifying the root cause of the issue faced by the tabloid and hence the focus is on the performance of the tabloid as a whole. Emphasis is given on the restructuring requirement as a tool to enhance the performance of the tabloid. We would hence recommend that only if there is a need as shown in the study and also only if there is a risk appetite, the tabloid should go for a structural change (in and out innovation) which should be decision-making driven. Micro- perspective: Drucker, PeterF., quoted in his book that “The effective man always states at the outset of a meeting the specific purpose and contribution it is to achieve and his basic purpose remains to challenge and stimulate everybody in room (2006). This is a people-centric approach and hence focuses on how to generate the maximum output from the people (employees). The study makes it evident that since nothing worked for the tabloid in terms of performance enhancement, internal training via knowledge sharing at different levels will help the tabloid in increasing the overall performance. This will have a two-fold benefit: One, people from different departments and functions will work in collaboration in meeting the organisational goals and objective. Two, the training cost will be heavily reduced as there is no external training programme being conducted. References Drucker, Peter F. (2006), The Effective Executive: The Definitive Guide to Getting the Right Things Done. New York: Harper Collins Publishers. HBR (2010) issue: Change for Change’s Sake. Flinchbaugh, Jamie, and Andy Carlino, (2006),The Hitchhiker’s Guide to Lean: Lessons from the Road. Michigan: SME. Tague, Nancy R. (2005), The Quality Tool Box .Wisconsin: ASQ Quality Press. Read More