Quality Vs. Existence

Continuing from the last discussion, what should the CEO do to break the circle?

Is it that easy a way out to contain the costs and compromise the quality. Specially in this world when consumers are used to specific standards. There is nothing left as being called the brand loyalty. None of today’s customer is going to stay with the product/ service if it goes down on quality, doesn’t matter how long it has been his favorite. So, quality is not the matter to discuss for containment. Cannot ever think of going down on quality. Where to look for the profits? Where to cut the corners and save margins? And today, the question is not big profits but survival. Need to give high quality product but market is shrinking, weak market sentiments are making the fight to survive bit tougher.

We are back to the question. What can Somerset CEO do to stop loss of its customers?

Suspend new sales. Contain the team even with the already lost customer, cut costs on overheads and not on quality impacting service assets. Deliver high to the customers with unique value and retain them. Somerset CEO does exactly the same and easily survived thru tough times to see the high glory by adding high value customers on its list.

If it is any indicator, we need to contain the team and continue providing quality output to existing customers thru the lean phase. it adds strength to the thought process.

Another real life story is hitting my thoughts at this time: 
A retail chain, facing the heat of times since last 8 months. Management tried hard to keep the chain going thru the phase but slowly they ran out of control and had to close down 40% of their store locations. Market scenarios reflected into the balance sheet and liabilities went above the level of justification. It was decided to put the business on block. Nobody was expecting a high valuation but a takeover bid was always expected. A sorry state: nobody turned to buy or invest into the ailing chain that was supposed to be a piece of cake not too long ago. With a big heart, decision was made to liquidate the assets. The better option: put the current stock on liquidation sale.

And buyers were back on the stores, picking up the stuff, fully utilizing the liquidation prices. Do you know: the chain survived to continue the existing stores.

They are not going to open any new store for now or not making any new investments, employees agreed to support the management with no hikes, ready to give extra hours. And guess what, the chain is out of red with its limited resources, limited assets and contained liabilities. 

Team management in recession

It is been 2 weeks since we last interacted. It was quite busy weeks but it was not straight away the project delivery work that kept me occupied all thru. The team management – more of people management is the flavor of this month.

Problem: The same – recession and project delays. A couple of projects are put on hold. Team is on bench. Nobody is feeling secure in terms of job and senior management is not divulging on future plans. Though nobody is given that famous pink slips, rumors are buzzing around.

And to add woes (at-least for me), in these times couple of best performers got a new job offer and submitted resignation. Easy way out – let them go, reduce team size (cost cutting). Should I?

I went thru a study about an organization (say Somerset):

Somerset, during last recession period, lost one of its key customers due to payment upholding. As soon as the word spread, CEO asked for customer replacement and/ or cost cutting. As during that period, attaining a new customer was a little tough, things moved to Plan B – some pink slips issued & costs contained to make up for the lost customer. BUT, it resulted in loss of quality of the output and the major impact, Somerset, in next 3 weeks lost 2 more customers on poor quality reasons. CEO turned back to say the same – customer replacement/ cost cutting.

It is the vicious circle. What one can do to break it? Think over it and we will continue discussion…..

Recession & a Manager’s Self-confidence

Thinking about the series of events happened in 2008 that lead to the current state of turmoil all across the economy. Banks went down left, right and center. The other day, it was an estimated layoff of more than 71000 people across different sectors and across the globe in one day. The insecurity around, can make any manger loose his self-confidence, let alone his capability to lead and motivate his team. Even if one is doing it  very successfully since his first breath in this world.

It is being written and discussed a lot by many management gurus that a manager needs to have a leadership thing. A manager should be able to lead with his words and should transfer his energy into his team. A passion to lead and stand out of the herd with a capacity to make others follow. And one needs confidence in himself to make it all happen. BUT nobody told us how to cope with the situation running thru the days now. When managers themselves are insecure and economy is shattering their confidence day by day as if they are naive, as if last couple of decades have had nothing to do with their performance. Frustration, resignation, helplessness is running thru the blood.

What we, the managers really need to buck ourselves up. How can I motivate myself OR Why do I need to motivate myself?

Don’t read me more here to find any solutions. I am not that Guru who can give you all that gyyan. I don’t have any magic wand or some solution to this question right away.

In my view, the key is our thinking structure, how are we looking at the world around us and our reaction in the form of ideas and attitudes. These mental structures can either block us to move forward or act towards our goals. A familiar example is: a person sees a glass half empty, another sees as half full. Different perspectives……

Recession is a state of a perfect business model where the wheel has started moving down south from its top. Running thru it is as essential as going upwards from the bottom. We need to first understand our own confidence state during this phase without actually worrying “HOW” and “WHY”.

Are you motivated enough to lead your pack through these tough times. Waiting for your responses…..