Home / Opinion and Issues/ Tough times? ‘Trim & Fit’ or ‘Chop & Cripple’?: MTI

Tough times? ‘Trim & Fit’ or ‘Chop & Cripple’?: MTI


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 15 May 2018 00:00

Facebook

 

The Sri Lankan economy, after a period of post-war growth, is showing signs of cooling down. The depreciating rupee and recent fuel price hikes and its ‘snowballing’ effect on cost of living is bound to impact consumer sentiment and spending, business investments and the demand for credit. The natural tendency of many businesses would be to start cutting costs and freeze development initiatives. 

Research and MTI’s international experience, clearly shows that, the way in which companies respond to tough times, is what separates the ‘living’ from the ‘departed’. Most organisations tend to indiscriminately cut costs, freeze all forms of developmental work and adopt a ‘wait & see’ approach. We call them the ‘Chop & Cripple’ companies.

By contrast, the Smarter Companies (we call them ‘Trim & Fit’ companies), while being prudently cautious, uses the crisis period as an opportunity to critically evaluate every aspect of its Strategy, Structure, Staff and Systems, challenging every dollar and every stroke of work as to the value added. They also see the upside of acquiring low valued assets, strengthening their market position (given lower level of competitive/marketing activity) and gearing their organisations for the upturn.



6 strategic priorities to encounter tough times:

  • Resilience: Based on Risk Management and Sensitivity Analysis, enables the organisations to withstand the fundamental and short term threats
  • Sensitises the entire organisation through a highly inclusive, interactive and educative process that will get the buy-in of key stakeholders, also ensuring ownership in implementation 
  • De-Slack: Organisations inefficiencies are accumulated over long periods of good times and tend to get hidden in the overall profitability. De-Slacking through a process of rationalisation helps to achieve a cost optimised operation, by weeding out unproductive Value Chain Components, Plants, Products, Brands, Channels, Customers, Structure, Systems and Initiatives
  • Re-model the business on a Ground-Zero basis (given the environmental dynamics), thus arriving at a business model and scale that will ensure business sustainability and in a position to capture the upturn opportunities 
  • Upsides: Seizing the Opportunities arising from the tough times and making prudent investments 
  • Toughen: Gearing the organisation to make Tough responses a part of their DNA, through a Lean, Minimalistic and Performance Drive Culture (supported by Systems

 

11 Questions to which you need to ‘soul search’ responses

1.How to rationalise your Customers, Product, Brands, Suppliers and Initiatives, thus removing the slack created in ‘good times’, with direct-to-bottom-line savings?

2.How to institute ROI measures for all marketing, branding, channel, sales and service initiatives, which will even permit prudent investments to grab competitor market share? 

3.How to tighten the disciplines of supply chain and working capital management, with an integrated approach within the organisation?

4.How to identify opportunities for acquisition of businesses, brands, products, patents etc.?

5.How to prudently divest – any aspects arising from the rationalisation process (above)? 

6.How to develop a clean-slate based lean and effective structure that will feature zero slack, minimised layers and supervision only jobs?

7.How to institute a performance based pay structure and culture – that will drive every stroke of staff work?

8.How to identify and lock-in high performers (based on the risk analysis) and how to ‘acquire’ high performers (you have tried and not been able to attract)?

9.How drive towards a lean, simple and minimalist culture, including rewards and recognitions for living these values?

10.How to develop lean and robust processes (on a clean-slate basis), thus objectively exposing the excess ‘fat’ and reducing process time? 

11.How to optimise the use of cost-effective technology (including optimising existing systems), that will ensure leaner processes, cycle time and efficiency?


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

In the tropical terrain, tourism thrives, but!

Friday, 26 April 2019

In business school an oft repeated refrain in the marketing module is ‘get your product right’. It’s a task easier said than done, especially when it’s a service. Marketing of a service characteristically has to negotiate both lucidity and am


A secular public space is essential for the safety and wellbeing of all

Friday, 26 April 2019

The heart is heavy and the pen is slow. The environment is thick with the shared sorrow of many. Pain and suffering caused by deaths of hundreds and maiming of more on Easter of 2019 will linger for the rest of our lives. But life must go on and we m


Social media could be our egregious enemy, sometimes

Friday, 26 April 2019

One of the first moves the Government considered after the 21 April tragic events of coordinated Easter Sunday bombings of churches and hotels in Colombo, Negombo and Batticaloa was a temporary block of social media. There was no debate about requisi


Terrorism, violence, and incompetent political leadership

Friday, 26 April 2019

Incompetent people, the researchers found, are not only poor performers, they are also unable to accurately assess and recognise the quality of their own work. These low performers are also unable to recognise the skill and competence levels of other


Columnists More