Thursday, June 13, 2013
Monday, March 18, 2013
The real multiplier value comes when you drive effectiveness. So let me give you an example. Let’s take a standard hiring process of any organization. The real process that one should think about is not the hiring process but the end-to-end process that straddles the whole organization from the time you define who you want to hire for a job to ultimately the person joining and delivering and producing results. Think about what people spend time on in that end to end process. The hiring team is measured on their metrics: how quickly can they hire the right person. The training team is measured on their process: how quickly can they train. In reality, the right metric is end-to-end: How do you get the right person on the job that delivers effectively as fast as possible?
It’s quite likely that it is better to spend double the time on hiring because that allows you to spend one-third of the time on training and the probability of an effective person is higher and total end to end time shorter …. that’s effectiveness !!
But that’s not the way organizations are structured. Enterprises are structured as functions in silos. Processes on the other hand that delivers outcomes straddle from one function to another. There’s leakage of output in this straddle. There’s sub-optimization at the overall process level because each person who owns a function is trying to optimize their piece. It’s very difficult for organizations to get together and say we will optimize the overall process to produce the best outcome. And, by the way, the best outcome is not the total cost that I spend in hiring a person. It’s “I’ve hired a person who was effective on day two and produced fabulous sales on day five. And that, by the way, generated a hundred million dollars of sales “versus the cost benefit that I’d have got if I had done this cheaper and more efficiently maybe a hundred thousand dollars benefit.
Organizations in every case tend to focus on efficiency as functions and therefore sub-optimize the overall outcome that the process could deliver.
If you go and ask a company at the CEO or CFO level and say, “so how good are your processes ? " I’ll tell you the three answers they’ll give you:
1) " They are good or bad” - They won’t say how good or bad.
2) " I think I can improve my processes by x percent a year”
3) " I don’t know”
If you were to measure a number of these processes across large corporations and compare processes that are run really well in some companies vs. being run badly in other companies – the difference could be five to ten times better. For instance, there are companies that close their books in two days and those that take forty-five days. There are companies that pay bills to their suppliers in twenty-four hours and other companies that struggle to do that in ninety days. Some have a 5 % defect rate in goods shipped against orders while others have a 0.5 % defect rate. There has to be a way by which you can take the learning from the twenty-four-hour-payment company and transport it to the ninety-day-payment company and the value that you get there is not the efficiency value and the cost value, but the working capital of a billion dollars being released or the ability to capture 2 % extra discount on all your purchases from suppliers …. Effectiveness or outcomes!!
You can actually go to the granular level with granular metrics for any process in the world and define what "best in class" is. Some of us at Genpact have been on this journey to build this "Science of Process” for the last 15 years. We spent the first ten years collating data from running a number of these processes across companies and industries – we pulled all that together and said, so this particular process, how does this company run it versus that versus third versus fourth.
The interesting thing is sometimes the processes are pretty much the same or should be the same across completely unconnected industries. Why should a pharma company reconcile accounts or close their books dramatically differently than an automotive company? The reality is they actually do. So it’s not saying how I do this entire process better. It’s actually saying how do I do this little step better and the second step better, and the third step better, and for each of them there is a best in class. For each of them there is a connection to if I drive this improvement in this little process then here is the better outcome it produces!
How does one even begin to embark on this journey? It has to be in your DNA, a DNA of Lean, Six Sigma, and process granularity. Every process that we run for our clients, we measure at an extremely granular level. We collect all that data and create benchmarks. When we drive improvements, we know what drove that improvement and how much improvement was driven. We’ve done that for fifteen years. The missing link here was how to build it back into a framework. That’s the "Smart Enterprise Process” SEP framework that we started building about five years back.
We now have built it for twenty-six different processes across the world. And the fascinating thing is when we do a diagnosis of a company’s processes and go back telling them exactly which little step to improve which will result in outcome improvement – it shocks the wits out of them!! In fact, they are completely flabbergasted because they have always believed that they run their process really well. They’ve also believed that the improvements they typically can drive are five percent, ten percent versus five times, ten times which is what we’re able to deliver. Of course you have to measure outcome improvement Vs just efficiency.
That is the whole basis on which we have built “The Science of Process " and the more people learn it, which is learnable like any other science, the more people apply it. The more people use it and deploy it, the more value that they can generate for themselves, for their organization and for enterprises.
And by the way it’s not just about Technology!!
Monday, March 4, 2013
Sunday, February 24, 2013
I think about building careers along three dimensions… let’s call them X , Y and Z.
The X dimension is the type of skills that different roles require. So finance skills vs. technology skills vs. marketing skills etc.
The Y dimension is the type of cultural environment in which those skills are used and exploited. It could be which geographic regional culture like American vs. European or it could be the type of business… like family-oriented entrepreneurial group vs. multinational environment or it could be hierarchical vs consensus driven culture etc etc
The Z dimension is the industry domain that that role belongs to …. Consumer financial services vs insurance vs healthcare vs retail etc
Every role can be defined along these three dimensions and as you go through your career you must do three or four things. One you need to make sure you really become an expert at one dimension at least – and do that early in your career. I’m a big believer that as you go through a career, you’ll always be known for one or two things that define you …. almost a safety net. So if everything else is lost, you can go back to your core.
The second rule is to change one dimension every time you move from one role to another. But don’t change two dimensions if you can avoid it and please don’t change three dimensions because that’s a disaster!!
The third is that over a period of three or four moves, change all dimensions. So if you look at role number one to role number four, you should have changed all three. And then you’re in a different culture, in a different industry, in a different domain!!
This way, you can almost chart your career as multiple potential options. So when I was working in highly change-oriented organizations like Unilever, Citibank, and then GE, every time I was asked to move jobs within the organization, it took me pretty much ten minutes to say yes or no because all I needed to do was fit it into this model. So I changed six roles in three years with Citibank. I changed four roles in six years with Pond’s and Unilever and I changed five roles in five years with GE and GE Capital in the early part of my career at GE …. I said yes in 100 % of those situations but that’s a different story I will tackle another day !!
But like most successful ‘mantras’, this one has to be a blend of art and science. The dimensions and rules are the science part of building a career… but you need equal parts of ‘art’ to build a successful career and this comes from investing in longevity, relationships and passion.
The generation that is getting into the workforce today is more impatient, more exposed, and they probably are more knowledgeable. They want everything in life… their gratification has to be instant!! When we hire people and look at resumes, we don’t care what a great job someone is doing today or yesterday, if the resume shows six jobs in ten years, they have zero chance of even being called for an interview. Zero chance! We just don’t call them because no amount of telling me why they did what they did is going to convince me that they’re going to last.
Equity gets created only when time is spent. Knowledge gets created only with time… when you combine intellect with experience. So one of the biggest things that I would tell people coming out of universities into the workforce and joining the workforce today is do not underestimate time, and do not underestimate relationships and both require equity. If someone were to ask me the one joy that I’ve got over twenty-five years of a career, I would say it’s seeing people who have worked with me, who have worked for me, and are now in probably bigger jobs than even they dreamt of . And I can look at them and say part of the reason they are who they are is because of the fact that, "we worked together. "
And the last thing I’d say is to be extremely passionate about what you do. Like Steve Jobs said do what you’re passionate about and be passionate about what you do, otherwise don’t do it. When the two match, there is no difference between work and play. I work twenty-four hours though I might not be in office… because I love what I do. I’m really passionate about what I do. And I think if people actually gravitate to doing things, whatever it is, that combine those two, then I think the chances of being hugely successful is so much better.
Thursday, October 18, 2012
That picture isn’t too far from reality – but it’s a picture that was reality circa 1995 when this industry first started. Some of us who started the industry had the vision to take this picture and elevate it to a different level altogether, improving it dramatically to deliver real, measurable impact.
Cut to 15 years later – today this is a radically different industry that delivers services across a range of processes from the mundane to very complex and high value-add services. A pretty significant chunk – almost 40% – of what we do requires high skills, deep knowledge and sometimes at least 10+ years of experience to deliver high-end services like closing books of organizations, filing 10ks for US corporations, analyzing and detecting credit card & insurance fraud, warranty management and managing spares for aircrafts … there are hundreds of diverse examples.
The career paths of people in this industry tell this story …. of an upward swing in skills and certifications. People who started out making collection calls get CA or CPA certified during their tenure and switch career paths to start delivering high end financial work for global organizations. It’s fascinating to see how one individual can explore multiple career paths across industries, domains , functions and geographies… all within the same organization !!
One hears from the skeptics how there is little room for innovation in this industry. But let’s talk about what innovation really is – it’s not just designing the next Apple product, right? Most people limit innovation to product innovation. While that’s probably one of the more visible forms of innovation, it’s the not-so-visible innovation in processes or services or business models that truly lives up to its name. Ours is an extremely innovative industry when it comes to people management. Our talent retention and development practices are the most sophisticated compared to any industry anywhere in the world… for a simple reason… we are forced to do it! The war for talent is crazy… we hire 15,000 people in a year… we train 40,000 people… and we also lose 15,000 people !! In such a situation you are forced to innovate people practices that attract, retain and engage the best talent in the world. If you make a list of the best HR leaders in China or Philippines or India or South Africa or Latin America , I guarantee you they will come from this industry. The same goes for the best Lean Six Sigma or long-term client facing relationship builders, or finance people who understand finance across verticals and geographies – the diverse nature of our industry hones our talent to produce world-class leaders.
The trick however is that you have to last in this industry and build a career in order to really derive its true value.
Thursday, April 26, 2012
Tuesday, April 3, 2012
A question that I have constantly thought about is what makes individuals intelligent , humans intelligent …. “Understanding intelligence” is a quest that has driven humankind for centuries. But what about Organizational and Enterprise Intelligence ?
What makes an organization ‘intelligent’?
Organizations do two things; they run and they make decisions. It doesn’t matter what industry they’re in or what their size is… running and making decisions are fundamental to every enterprise.
The economic turbulence and resulting uncertainty in today’s environment has forced them to re-evaluate the way they do both.
They are now looking for ways to drive innovative solutions to capture opportunities when they occur, while not adding cost. They need to be smarter in today’s slow-growth phase in developed economies, while ensuring they capture the high-growth emerging markets for future success.
This combination of forces at play in this volatile environment is really forcing organizations to become smarter, find ways to grow revenue and capture new market share, while ensuring they don’t increase capacity themselves and instead build an ecosystem of partnerships.
So how does a high-performing organization differentiate itself? They build the ability to anticipate needs, have the dexterity to adapt to change and the spirit to innovate. They are effective in diverse markets and are alert to evolving stakeholder requirements. They are intelligent.
So what makes an organization intelligent? In working with a bunch of high-performing, successful organizations that have adapted themselves to today’s environment, here are 4 attributes that are common to all.
They are Globally Effective. They are able to address different markets and run equally well anywhere in the world. And they deliver better outcomes for themselves and for their customers !!
They are Connected. They pick up needs faster and use all the tools and technology available to build insights faster. They connect the dots across the enterprise and ecosystem faster and build cost effective relationships faster.
They are Innovative. They find novel ways to address both opportunity and uncertainty for competitive advantage using all the knowledge gathered through being connected.
And finally, they are Adaptive. They respond to change with agility. In fact, they thrive on change... they want change!! Because they know they outcompete with others when change is needed.
And therefore, organizations that are intelligent and are able to leverage their ecosystem of partners are the ones who dramatically improve the way they run and take smarter decisions !!