The boom and bust are natural in economic cycles. Individuals, companies and nations go through highs and lows during their lifetime.
Today, we live in a much more complex world, where constant change is the only reality. As Arun Jaitley, the India’s Finance Minister, recently said, “Earlier, global shocks used to happen once in a decade, now we hear of them every day.”
Obviously, we are forced to deal with a number of exogenous factors, over which we have less control. The key to success lies in developing an appropriate response.
“We cannot change the direction of the wind, but we can decide which way we wish to go,” says Shiv Khera, in his book: You can win.
Interestingly, prosperity and poverty states influence extreme behaviour patterns. There is a tendency for excessive spending during moments of prosperity and when chips are down people explore drastic measures to cut down their spending. I think we are at this inflexion point when the nation is faced with the prospect of a significant cut in oil revenues. The question obviously is: “How do we tide over this challenging situation?”
As a believer in quality, I feel we need to convert the current oil crisis into an opportunity by unleashing the power of quality to weed out excesses and infuse agility in our systems and operations.
It is likely that many organisations, in the backdrop of high revenues, have allowed flab and inefficiency in their operations. This can be in terms of excessive manpower, redundant processes, idle capacities, non-revenue generating assets, under-utilisation of resources and so on. As organisations grow in size, the hidden inefficiencies and wastes increase.
Generally, large organisations may manifest this problem. Quality is all about efficiency and effectiveness, which in other words mean “doing things right” and “doing the right things.” We can start asking these two questions: “What are the things we do right here?” “What are the right things we are doing?” The answers to these questions will help eliminate non-value added activities and excessive spending (eliminating the wrong thing).
Any process, which increases the value of the output to the end-user can be considered as adding value, while processes which add costs, but no value actually destroy wealth of the organisation.
Organisations may consider outsourcing some of the activities, which are currently done within the organisation. This will not only relieve them of operational burden, but also reduce the cost. We need to evaluate our infrastructure and operations from the stand point of “fit for purpose.”
This will help us reduce excessive infrastructure, which is disproportionate to the intended purpose. For instance, a larger office may be replaced with a smaller office.
The fall out of this ‘Efficiency and Effectiveness programme’ is that companies will be able to trim their operations, improve employee morale, enhance competitive advantage and customer satisfaction.
All these will lead to greater business opportunities when the boom cycle resumes. Unfortunately, there is a tendency to think that quality is costly, not realising that focus on quality can actually reduce costs.
When wind blows strongly, most build fences, while few erect ‘windmills.’ I propose quality as a ‘windmill’ in the face of the wind of oil crisis that is blowing across the nation. Can we discover a goldmine of opportunity in quality to cut costs, eliminate wastage and redundancies in this moment of crisis? I think we can!