Competitive performance - Beat the odds

In the last post, I stressed upon the need to get rid of the word 'recession' from our minds in order to beat the slowdown blues. The best way to do that is to focus on remaining competitive and keep improving on that front. By being competitive a business can beat the odds and garner more of the available market. 'If I am doing better than the next best that would suffice me to make the most of the market', is the thinking that generally trips corporates. It is important for a business / company to keep increasing the distance between itself and the next best. Falling markets often present brilliant opportunities to increase one's market share and gain entry into new markets.

A company can become competitive in the short run but attaining long term competitiveness requires it to remain focused at all times and keep bettering its own performance.

Comparisons help a person to reach a certain level but only benchmarking against the self on a continuous basis will take the person to greater heights.

It is applicable to businesses also. Competitive edge can get blunted if the focus is just to beat the competitor. It is important for companies to keep sharpening the competitive edge once they beat the competitors.

Competitive performance

A business may do well on operational parameters and yet struggle to grow because its competitors can easily emulate them on the operational front. It has to achieve ‘operational excellence’ (competitive performance level) to stay on top of competition and to keep improving. Any company that successfully taps its knowledge assets and embed innovation in its business processes will be in a position to transcend competitive performance level. Giving support to these two elements of competitive performance level is 'progressive work culture'. It may sound obvious yet many companies fail to blend these three core elements of competitive performance to achieve operational excellence.

Knowledge

For long knowledge was/is treated as a supply side issue where acquisition of knowledge is taken as knowledge used in the business. But rarely this holds good. The thing that differentiates an individual from other at work place is the possession of knowledge. Exposure to work, challenges faced, problems attended and solved, specific incidents etc. enriches the knowledge of an individual. By sharing the knowledge with others the individual is running the risk of blunting his own edge in the organisation. But then no company that is aspiring to grow, can afford to let the knowledge assets go untapped. It is where a comprehensive knowledge management system helps a company to tap its knowledge assets and keep sharpening its competitive edge.

Innovation

Innovation is an act of starting something for the first time; introducing something new. By innovating we bring something new to the environment. In business, innovation is often associated with new products and services. However it can also be associated with new processes, practices, methods etc. that improve core operational parameters viz., cost, quality and time. To innovate one needs to think and think differently. It’s a combination of attitude & knowledge that breeds innovation. Innovation happens when the environment is conducive.

Progressive work culture

Management systems and business processes will be of little help if the work culture is not conducive for performance and growth. For a work culture to be progressive, performance oriented and adaptable there must be a strong trust between the employer and employees and a there should be a shared vision. The promise of performance and the promise of recognition must match and people must be able to see the larger picture, how they are connected and how they impact it. The role of management is paramount in ensuring progressive work culture. Management must take the lead and set examples. If there is commitment and clear vision from the management it won't take long to set the work culture on the right path with the help of management systems.

Recession - Get rid of it from your mind

The times we live in are more challenging for the simple reason, globalisation has set its roots firmly in India and its effects are clearly felt. Last year, around this time, we were ebullient with the economy predicted to touch 9% growth for the second consecutive year. It however fell short of that mark, but pessimism was not in the air. People were still talking about expansions and capital investments. In plain words demand was not expected to recede. But today recession is the word that tops the list of words we Indians utter. Be it for lack of business or for joblessness, "it's recession, you know".

Surely India is hit by the recession in US, UK and the lot. Our exports are nearly 25% of our GDP and the sector employ(ed) nearly 150 million people. Only agriculture employs more people than export sector. Foreign Investments, both the hot (FII) and hard (FDI) varieties, are not forthcoming and external borrowings have become costlier. Despite all these we still are growing and expected to grow at 5 to 7% for the current fiscal. There is no negative growth, not even for a quarter, to justify claims of recession in Indian economy. It has definitely slowed down compared to 9% growth we achieved for fiscal 2006-07 but nowhere near negative growth.

I came across Nobel Laureate Amartya Sen's comments on recession in yesterday's edition of The Hindu. He is on the dot when he said,

"No amount of financial stimulus into the global economy is going to rid the world of recession. We have to get rid of this mindset...the mindset of recession. It's a matter of psychology than economics."

In India we haven't yet felt the real effects of a recession but already think we are in one. It may be true of export sector but then if that sentiment is allowed to be carried over to the rest of the economy then we would surely experience recession.

Indian banking system is awash with money as very little of it moved out as loans and advances during the last few quarters. All the money released by monetary interventions by RBI are lying with RBI itself in various forms. The 'Recession' disease killed the risk appetite of our bankers. As one bank manager put it, even new proposals have trickled down. Whom to blame? The banks? The Government? or The businessmen? Surely the hit to the export sector will have its effect on ancillary units that depend on them and those failures would rankle the bankers and the businessmen. But then there is still room to move around, not that one is trapped in a 2x2 warp.

Businesses may have made the mistake of reckless investments when the picture was rosy. Businesses would be wrong to avoid prudent investments when the picture is not rosy. Every time presents an opportunity. Never is the time apt to innovate and improve than these tough times. The slowdown will not last if we keep the word 'recession' away from our minds and make business decisions based purely on the merits of each case.