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  • Changing Environment – changing response

    In the last blog, we concluded the implications of history to a practicing manager. Now, before we continue with the next set of blogs on organization development, and their process of growth. Let us look at a small case, though a bit old it would be give us a good starting point for the discussion over the next few blogs.
    TV is a semi-autonomous division of a medium sized equipment manufacturing firm which is part of a large, highly diversified conglomerate. TV manufactures a line of heavy duty pumps and some components for fluid movement systems. The company does most of its own castings, makes many of its own parts and maintains a complete stock of replacement parts. TV also does special-order foundry work for other firms as its production schedule allows. 
    Until recently, TV had defined its business as providing quality products and services to a limited set of reliable customers. TV’s GM, a first-rate engineer who had spent most of his time in the machine shop and foundry, personified the company’s image of quality and cost efficiency. In the mid-90’s corporate management became concerned about both the speed and direction of TV’s growth. The management and staff at corporate headquarters began considering two new product and market opportunities, both in the energy field. Fluid movement systems required for nuclear power generation provided one of these opportunities, and the development of novel techniques for petroleum exploration, well recovery and fluid delivery provided the second. TV had in the past done some large for these markets, but the opportunity now clearly indicated growth opportunities. 
    TV initially moved towards exploiting these opportunities tentatively, the GM realized that the contract sales involved extensive planning, field-contact work, and careful negotiation. These didn’t suit the GM’s primary strength or his area of interest. The Parent organization moved the present GM to another position at the headquarters and in his place got a new manager with extensive background both in sales and engineering and who was adept at large-scale contract negotiations.
    Within a year of this changeover, TV landed several lucrative contracts, and more appeared to be in the offing. The new business created by these contracts, however, placed heavy coordination demands on company management, and while the organization’s technology (production and distribution system) has not been drastically revised over the past 2 years, workflow processes and the operational responsibilities of several mangers have changed markedly. Materials control and scheduling, routine tasks in the past are now complex activities, and managers of these operations meet regularly with the executive planning committee. Moreover, a rudimentary matrix structure has emerged in which various line manages undertake specific project responsibilities in addition to their regular duties. Key personnel addition have been made to the marketing department and more are planned, with particular emphasis on individuals who are capable of performing field planning and supervising and who can quickly bring new fluid systems to full operation. Budget of some of the older departments are being cut back, and these funds are being diverted to the new areas of activity.

  • Manager’s usage of history to predict the future

    Continuing from the last blog, where we began a discussion on the managerial implications of the understanding of history that we had developed, we today look at the next 2 implications for the manager.
    2. Recognize the Limited Range of Solutions
    It is common to find people who would love to use what they have already learnt! In organizations too when you are faced with a new revolutionary change – it is common to be tempted to use the technique that had succeeded the last time. This essentially would complicate problems since the current organization structure is in response to the earlier revolution and the current revolution has grown out of the processes and structure that have evolved through the adaptation learning from the last revolution – seasoned through the evolutionary phase in between. 
    The management should be prepared to dismantle the current structures before the revolutionary phase become extremely turbulent. Top managers too would have to realize that their management style are no longer appropriate and may even have to move out of the leadership positions.
    It is important to note that evolution stage is not an automatic stage; it is a contest for survival. The company would have to consciously introduce planned structures to solve the current crisis but also are fitted to the next phase of growth.
    3. Realize the Solutions breed new problems
    Historical determinants are very much the determinants of what happens to the company at a much longer date. This awareness would help managers to avoid the habit of “pinning the blame” on a current development. A well experienced practitioner would also be able to “predict” future problems – thereby effective solutions and coping strategies could be gotten running before the revolution gets out of hand. 

  • Historical Implications to the manager

    In the last blog, we summarized the various management practices that are prevalent in the various phases of organizational growth. Starting from the current blog, over the next few blogs, we shall look at what this means for the manager! 
    In a recent comment to the post, one of the readers of the blog had indicated that all this is pure “common sense”; this is really the proof that it is intuitive. However, it is really hard for the individual manager who is going through the phase to really realize the challenges that he is currently undergoing and act accordingly. Today’s blog and the next few to follow also deal about this issue. The first of these is:
    The manager should know where the organization is in the developmental sequence
    Recognizing the current stage of growth of an organization is very critical for the Top Management of the organization. This enables the organization to recognize when the time for change has actually arrived, or it may result in imposing a wrong solution to the issue at hand. 
    Many a times the top management tends to work against the tide, realizing the flow and move with it is a good approach to take! It is also important to note that every phase is essential, and in a way strengthens the organization through the learning that is accumulated at that phase, these learning are very essential to the success in the subsequent phases. 
    It would be wise to really let the revolution move in, it is these periods of tension, pressure, which create ideas and awareness that builds the platform for change in the future and acts as a reason for the introduction of the new managerial practices.

  • Organization Processes at Evolutionary stages

    In the last blog, we looked at the last of the 5 phases – Collaboration. In today’s blog, we intend to provide a summary of the management processes of the organization across 1the various phases.
    The diagram below provides the summary.
    Org Processes at Evolutionary Stages

  • Interpersonal collaboration & organization

    In the last blog, we discussed about the phase of coordination understanding the characteristics of the evolutionary scenario there in and the following revolution. In today’s blog, we look at what the revolutionary phase leads to and what would characterize the evolutionary stage there in.
    Phase 5: Collaboration
    The red tape crisis of the earlier coordination phase begins to slowly open up into a more inter-personal collaboration phase. The phase generally composes of temporary teams that work on projects with spontaneity. Social control and self-discipline replace the formal control mechanisms of the earlier phase. 
    All is not rosy at this stage; the transition would be extremely difficult for those experts who created the old systems as well as for those line managers who relied on formal methods for answers. The characteristics of this phase include:

    • The focus is on solving problems quickly through team action
    • Teams are combined across functions for task-group activity
    • Headquarters staff experts are reduced in number, reassigned and combined in interdisciplinary teams to consult with, not to direct, field units.
    • A matrix-types structure is frequently used to assemble the right teams for the appropriate problems
    • Previous formal systems are simplified and combined into single multipurpose systems
    • Conferences for key managers are held frequently to focus on major problem issues
    • Educational programs are initiated to train managers in behavioral skills for achieving better team and conflict resolution
    • Real-time information systems are integrated into daily decision making
    • Economic rewards are geared more to team performance than to individual achievement
    • Experiments in new practices are encouraged throughout the organization

    The possible revolution that follows this evolutionary phase hasn’t been well documented so, we wouldn’t really discuss about these at the moment.

  • Collaboration phase of Organization Growth

    In the last blog, we discussed about the organization development phase of Delegation and the associated characteristics along with the build up to the next revolution. In today’s blog we look at the next phase – Coordination.
    Phase 4: Coordination
    The top-management which had a lot of issues in the delegation phases achieves control over the organization’s functioning in this Coordination phase. The evolutionary period of this phase would be characterized by the following:

    • Decentralized units are merged into product groups
    • Formal planning and procedures are established and intensively reviewed
    • Numerous staff personal are hired and located at headquarters to initiate company-wide programs of control and review for line managers
    • Capital expenditures are carefully weighed and parceled out across the organization
    • Each product group is treated as an investment center where return on invested capital is an important criterion used in allocating funds. 
    • Certain technical functions, such as data processing are centralized at headquarters, while daily operating discussions remain decentralized
    • Stock options and company-wide profit sharing are used to encourage identity with the firm as a whole.

    These coordination systems enable the organization grow efficiently allocating a company’s limited resources. The field manager begins looking beyond the local unit needs. They still enjoy much of the decision making authority, but they would have to justify their actions to the headquarters. This smooth sailing begins to rock when the lack of confidence begins to creep in. 
    The lack of confidence would be between the line and staff and between headquarters and the field. The proliferation of system and programs being to exceed its utility – a red tape is created. A lot of paper work is seen as highly bureaucratic. Procedures take precedence over problem solving, and innovation takes a backseat. The organization would have at the time of the next revolution become larger and complex to be managed through such rigid processes and formal programs. 
    The next phase following this revolution is that of Collaboration

  • Delegation – Organization Development phase

    In the last blog, we looked at the “Direction” phase of a phase in the development of an organization. In today’s blog we look at the next phase of Organization Development – Delegation. We understood from the last blog, that the struggle for more responsibility at lower levels of the organization leads to the process of delegation. At this juncture, the company could grow only if a good amount of delegation is in place. 
    We begin today’s blog from the point of such delegation. As the phase “evolves” we find that:
    • Much greater responsibility is given to the manager of the plants and market territories.
    • Profit centers and bonuses are used to stimulate motivation
    • The top executives at headquarters restrain themselves so managing by exception, based on periodic report from the field.
    • Management often concentrates on making new acquisitions which can be lined up beside other decentralized units
    • Communication from the top is infrequent, usually by correspondence, telephone, or brief visits to the field locations.

    Such delegation enables the company expands through enhanced motivation at lower levels. The decentralized managers are able to penetrate larger markets, respond faster to customers and develop new markets.
    But
    This growing delegation to the lower levels sows the seeds of the next revolution. The top management begins to sense a loss of control. The highly diversified operations are akin to the field managers running their own show with little to no concern for coordination, money, and technology and man power with the rest of the organization!
    The top-management attempts to regain control over the total company. A return to centralized top-management at this stage is not an option. The companies that really move ahead are the companies which would have to find a new solution in the use of special coordination techniques.

  • Trek to Kuduremukh 2

    It had been quite a long time since I had been on a trek. The last trek I had been in 2011 was some time in March. This was also to be my first trek after marriage. This time I decided to make it a closed group for the trek, including my wife – Sahana, uncle – Manju, sister – Shwetha, and my cousin -Ramya. Shana, Shwetha were to leave from Bangalore, while Manju Uncle and Ramya were to join from Udupi in the morning. 
    Our initial idea was to reach BalGal via Kalasa, however dude to prior booking of seats we had to get back to using the route we chose the last time via – Karkala. We were to travel from Bangalore to Karkala and then take the local service buses to reach Balgal. 
    We had booked a bus to Karkala, starting from the KSRTC Majestic Bus-stand at around 9:15 PM. We reached Kakala inspire of the pathetic ghat roads around 6 AM in the morning. Manju uncle and Ramya had just reached the Bus-stand a few minutes before we reached there. 
    We got down and enquired about the first bus that was scheduled to reach Kalasa via Kudremukh. The first such bus leave from the Karkala bus-stand around 7:30 AM. We still had nearly an hour and half to wait for the bus. 
    This was my second trek to Kudremukh, so I suggested we get to the hotel close by and have some “avalakki” and some other breakfast before we being the journey.  We sat back for the breakfast and enjoyed it before we got back to the bus-stand. 
    The bus that was to take us to Kudremukh was a bit delayed and reached the bus-stand at 7:45 AM. A short while after the bus left the station, we reached “KinnigoLi” where the bus halted for breakfast. The bus stood here for around 10 minutes before it began the journey, the next major stop was at Kudremukh township. Another half an hour’s journey from the township, we reached the point where we had to get down – Balgal. The time was around 10:15 AM.
    Before we had left from bangalore, we had reached out to Arun who runs a home stay (I had taken his contact the last time I had come down here). He had organized a jeep to pick us up from Balgal. The jeep however wasn’t there when we reached there! We checked with the localities and got to know that driver had just gone to the closest major town – Samse to pick up some of the daily grocery that was ordered by some of this relatives. 
    The driver was back in around half an hour, and we left towards our home stay at around 11:00 AM. The road towards the home stay was all wet and slippery, thanks to the rains. Yes, it had rained pretty heavily the last few days (unlike the last time I came here when it was in the hot summer) – this means there would be leeches for company through the journey 🙂 It wouldn’t be new for many of us, but for the first few times it would definitely keep any one paranoid! All this was to just the right build up for the adventurous trek we were to have. 
    The Jeep journey was just the beginning of the adventure – road was completely slippery and it requires great skill to drive on these narrow track.  What made the journey even more challenging was that the sides of the road were dug up for some pipes laying. These pipes were built to store water for the proposed horticulture project. The construction of the storage tank was pretty bad, and the water would leak as if from a sprinkler! All along the track we had coffee estates and provided a very memorable scenery. After this long journey, we reached the home-stay at around 12:00 noon. 
    We were already late, so dumped our luggage and had a quick brunch before we began our trek to the peak. Arun decided to company us to the peak. The last time we had been on the trek, we began the trek at 1 PM and retuned by 6:30 PM, so I definitely believed it would be possible. 
    The climate this far was pretty good, with the sun shining. It looked like the ideal weather for the trek. I was pretty sure we would have a good trek to the peak. The only thought I had at the back of my mind was being able to really get the ladies in the team constantly moving and keeping their stamina ready.
    We began the trek at around 12:15 PM, and steadily moved through the track. The initial track was pretty good, not too slippery. There were very few leeches at these initial parts of the trek. The first break that we took was around 20 minutes into the trek just below a tree – we called it “Bodhi Tree”.
    A 5 minutes break and we continued our trek to the beak, we resumed the trek. The next phase has many streams and – this time the streams were flowing with lot more force. We moved on to the lobo-house. I could feel the steam in the team slowly receding, we just took a short break before we continued the trek.
    From the last trek, I remembered the next phase was going to be pretty challenging. – It required us to climb a steep slope. The team slowly geared up for the climb but it took longer than expected. We reached a camping point which had manifested itself to a leech removing venue for most of the trekkers. We had our lunch at this spot before we resumed the trek. 
    The next phase of the trek was the actual climb of the Kudremukh peak. The Camp-spot is just at the base of the peak and generally involved a pretty steep climb to the peak. When I looked at the watch, I realized we were slower than the last time and we would have a challenge at hand if we wanted to make it back by 6:30 PM like the last time. 
    Ramya and Shwetha were already completely drained of energy, so we were pretty slow in our progress.  We began the last stretch around 3:30 PM and after consistent pushing and coaxing, we reached the plateau at the peak around 4:15 PM. The walk to the peak from the point we reach the top is around 10 minutes – one could find a ruined church on the right. 
    We reached the edge of the peak from where we could see the plains of the west coast. We spotted a few notable landscapes, completed another set of snacks we had carried along. and by 5 PM we decided to resume our return trek. The joy of having reached the peak had in fact completely gotten us to forget the strain we had put to get to the peak.
    Just as we began the decent from the plateau at the peak, we could see the clouds forming pretty quickly. We had to rush through the remaining trek if we intended to reach pretty quickly – Just a few steps into the trek and we had a quick shower which got us completely wet. The initial drizzle just got heavier and we found it just hard to see the route more than 3 meters ahead of us!
    The heavy rains of the slope, got the complete slope flowing with water. We found it hard to even lift our foot and put it to the next one. This was just the beginning of the adventure at hand! The light faded away very quickly. We could also spot lightning ahead. With the state of the team at hand, leeches, water, lightning, and many more we were here for something memorable for a life-time! It was pretty common knowledge that the heavy rains at the peak would generally flood the stream on the return path – that is the last one we would expect!
    The steep decent, combined with the rains was just making the complete journey a hard task at hand. A Slip and a fall was something that had become an common seen on the way back. The umbrella, raincoat and jerkins we wore were no protection form the rain. The rain would subside for 4-5 minutes but it wasn’t enough to hold the ground against the wind. The wet dress only made it chiller than usual. We had 3 torches with us and we were completely at their mercy. 
    Our Guide Arun, was pretty patient and helped keep the pace constant. He was the last person till we got down to the Lobo house, and then took to being the first in the line. The route was pretty clear till we reached Lobo house but then it was hard to find the remaining route in the tall grass and to add to it, it was the possibility of wild animals. 
    We steadily made progress and kept moving towards the home-stay. In the dark, we found  a few rabbits, some bats and some others which we couldn’t identify in the dark. This journey in the dark on the boundary of the National park, is definitely something that was to stay with us for long time in memory.
    Ramya and Shwetha were pretty tiered and only when the reached the homestead did they realize that they had really done it. The strain of the travel, trekking, darkness in the forest and the fear of leech had gotten the better of us all. We reached the home stay at 9:30 PM. 
    The next 30 to 45 minutes were spent to finding the leeches that had climbed all over us. We then freshen up and finally had dinner at around 10:30 PM. 
    We took a sound rest before we had we woke up for the next day’s return journey. We had asked the jeep to come down at around 7:30 AM so that we catch the bus at around 8:45 PM. 
    We reached Bajagoli at round 10:30 AM, had our breakfast. Manju uncle and Ramya returned to Udupi; Shwetha, Sahana and I returned to Beltangadi before catching the next bus to Dharmasthala.
    We reached Dharmasthala and booked our tickets to Bangalore. We reached Bangalore at around 9:00 PM. 
    This was a memorable trek, thanks to the nature’s forces. It always reminds me of one thing – Man only proposes and it is God who disposes. The Nature – a form of God has a lot of lessons to teach the student who is ready to learn. The absolute bliss is felt when you surrender to it, live through the experience.

  • Direction as an organization development Phase

    In the last blog, we began our discussion on the various phases in an organizational development and discussed the phase of creativity in particular. In today’s blog we look at the next phase of organization development – Direction and its accompanying evolution characteristics and the revolution that could happen.
    Phase 2: Direction
    At the end of Phase 1, the companies would have installed an able manager at the helm of affairs. What follows would be a period of sustained growth under able and directive leadership. The duration may vary but the characteristics are:
    • A functional organization structure is introduced to separate manufacturing from marketing activities and job assignments get more specialized
    • Accounting systems for inventory and purchasing are introduced
    • Incentives, budgets and work standards are adopted
    • Communication becomes more formal and impersonal as hierarchy of titles and positions builds
    • The new manager and his key supervisors take most of the responsibility for instituting directions, while lower level supervisors are treated more as functional specialists than as autonomous decision making managers.

    These changes channel employee energy more efficiently into growth, they eventually become inappropriate for controlling a larger more diverse and complex organization. The lower-level employees find themselves restricted by a cumbersome and centralized hierarchy. They have come to possess more direct knowledge about market and machinery than do the leaders at the top. Consequently they feel torn between following procedures and taking initiatives on their own. 
    At this stage, the 2nd revolution is due – It comes from the demand for autonomy from the lower-level managers. Most companies move towards greater delegation to handle such a scenario. The challenge lies in the top management who by this time is accustomed to being directive to give up responsibility. The lower-level managers are not yet accustomed to taking independent decisions. 
    If Companies at this point choose to stick to old control mechanisms, they are bound to lose the race with most of the lower-level employees leaving the organization.

  • Phases of organization growth – Creativity (Ph 1)

    In the last blog, we concluded the initial discussion on the dimensions affecting the organizational development. From today’s blog we begin a new discussion on the phases of organizational growth. The basis of this brief discussion is still the same source – Evolutions and Revolutions as organizations grow by Prof Larry E Greiner.
    Building on the understanding of the various phases of organizational development, when we analyze the growth of companies over a relatively long period of time, we could categorize the phases of growth into the following phases:

    • Creativity
    • Direction
    • Delegation
    • Coordination
    • Collaboration

    It is important to note that, each phase is both an effect of the previous phase and a cause for the next phase. The principal implication of each phase is that management actions are narrowly prescribed if growth is to occur. 
    We shall understand each of these phases beginning with Creativity today and continue through the week. 
    Phase 1: Creativity
    Organizations when they begin have 2 primary areas of emphasis – creating the product, creating the market.
    The characteristics of this period include

    • Company’s founders are usually technically or entrepreneurially oriented and don’t focus on the managerial activities.
    • Communication amongst employees is frequent and informal
    • Work is generally for long hours but rewards are modest salaries. There would be promise of ownership benefits
    • Control of activities comes from immediate market place feedback – “management acts as customer reacts”

    While all this is the daily happening, there is something lurking in the horizon – a potential leadership crisis. As the organization scales up, the range of activities widen requiring an entirely different mindset to handle these. The founders who love their freedom and creativity find them burdened with unwanted management responsibilities. The critical question now to answer is – who is to lead the company out of confusion and solve the managerial problems confronting it.
    The founders often hate to step aside even though they are probably temperamentally unsuited to be managers. The need would be to locate and install a strong business manager who is acceptable to the founders and who can pull the organization together.