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Management tips to survive the economic slowdown

April 21, 2009 13:21 IST

People were behind the Great Depression. People were responsible for the dotcom bust in the early years of the decade. The same is true of today's recession.

While some companies have laid off people by the thousands, others have seized it as an opportunity to get more out of their employees.

According to Jason White, leader of Hewitt's business performance improvement, cost-cutting and layoffs are amongst the biggest concerns of companies today.

He, however, believes that in times like these, it is crucial that knee-jerk responses that focus on short-term results are avoided and careful planning drives the design and execution of business performance improvement initiatives.

In a conversation with Byravee Iyer, White urges struggling firms to change the way people are organised, utilised and managed. Edited excerpts:

'Business performance improvement' is a new-fangled term…

Twelve months ago, we started working with clients that were really struggling with rapid growth in their business. Many of them wanted to replicate their existing structure in new markets.

Some of their other challenges included scaling their businesses with limited resources, finding the capabilities to grow business quickly and driving performance in new markets quickly. Thus, we started bringing into our business some new skills.

We started combining our traditional human capital subject matter with some new business analysis capabilities. Through this, we hope to help clients identify very specific opportunities to drive their performance higher.

What do you mean by specific opportunities?

When I say specific, I mean something beyond improved engagement and improved performance.

We're talking about employing very specific people management and people designed concepts and realising specific results in both productivity and cost. Further, this will improve sales and customer retention. Consequently, this can start serving broader stakeholder needs for the business.

Our scope is in the area of human capital but we're adding some fairly rigorous business analytical advice to it.

How cautious have companies been of late?

From an Indian perspective, earlier we noticed people were very focused on growth rather than efficiencies and cost.

Now there are some sectors that are badly impacted by the crisis and a big chunk in industry is being cautious and putting productivity measures in place, not necessarily doing too much about productivity but at least knowing where people are spending their time.

This is more so in the case of people-oriented jobs like those in the IT and ITES sector, which would be heavily focused on capturing productivity and deficiencies.

That's a big emphasis we're seeing.

Typically, in the manufacturing space, people are not willing to take drastic measures because there are huge labour regulations and the whole stigma attached to people losing jobs. But now, we're actually seeing people talk about layoffs and so on.

This is both a cultural shift and a capability challenge as emerging markets have gone through a boom period over the last 10 years and are now faced with challenges that they have not dealt with before.

How equipped are Indian companies to deal with the crisis?

Certainly, the way they are organised is a concern.

What happens in a period of rapid growth is that the structure evolves incrementally and over a period of time you can end up with a structure that is inefficient.

This is the catalyst for performance issues like the wrong people performing the wrong tasks at the wrong time. Naturally then, chances are productivity and performance will suffer.

Some of the other issues they face are structure and management practices. If you're in a situation where you are seeing double digit-growth without a lot of strategic effort going into understanding your customers, you just keep doing what you are doing.

Then, all of a sudden, the market changes and you find yourself in a sticky situation. So things like aligning your resources tightly to the market, understanding your growing customer segments, making sure you have your best people in front of those segments and knowing how they spend their time will eliminate some of these low-value activities.

According to me, a lot of organisations don't have a good understanding of what their people do. And this is a significant factor when it comes to performance.

So the recession must be a big wake up call for firms…

In the time I've spent in the market this week with CEOs and heads of businesses; it's a critical issue. Things like employee efficiency, sales channel efficiency and effectiveness are very current and important issues.

The reason is because those who want to come out of the downturn in a strong position are conscious that when they cut costs they don't want it to impact their ability to grow.

When they remove people from their business, they don't want to remove the scale of their business. They are looking for ways to retain capabilities while changing the way people are deployed.

A word of advice to companies striving to improve their performance, especially at a time like this…

There are three things we are talking to companies about.

The first, of course, is like I said earlier, tightly aligning your resources to your market opportunity. That means understanding your market and making sure your structure and the deployment of people is really optimised against your customer segments.

So, have your best people in front of the most profitable customers. That way you're getting a better return on investment on your people.

The second thing is to look at both ends of the talent distribution curve. By that we mean the top 10 per cent and the bottom 10 per cent. Make sure you retain the best people and put them in the most important roles.

As for the bottom 10 per cent, initiate good performance improvement techniques. The quickest way to drive performance is to get the bottom 10 per cent to lift their game by 5 per cent. So invest in some good performance management.

The third point revolves around maximising the impact of HR programmes and the investments that are made.

How much do you spend on those, are you spending it the right way and what is the return on investment?

Have the programmes but understand the cost and try to measure the impact they have on performance.

Given the current environment, are companies pulling back on HR investments?

You should ensure your HR resources are being allocated the right way. If you find some inefficiency, you can put into things like performance improvement and coaching.

In fact, now's the time companies need to train their force. If there are some redundant practices elsewhere in HR, invest in programmes that have the greatest impact. Do not cut back on programmes that are fundamental to employee engagement because that can decelerate performance.

But I take your point that it's a tough environment to be writing cheques around HR.

Jason White, leader, business performance improvement, Hewitt
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