Productivity : A Competitive Tool
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Authors
Authors: Pradip Sinha, Sadhu Ramakrishna
Associate Consultant, Research Associate
ICMR (IBS Center for Management Research).
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The Competitive Edge Contd...
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Jason opines, "Unless a company is constantly creating new offerings to solve a customer's problem, its future will be short-lived." There are companies like Gillette, Dell, 3M, P&G, Disney, Microsoft, Nucor, GE, Infosys, Wipro, Hero Honda, Bajaj and Maruti, to name a few, which have mastered the art of change and innovation. These companies have learnt to be highly productive from their initial days. It is the sheer power to change and the ability to think out-of-the-box that led to the emergence of AirDeccan, which has brought in a new chapter in aviation. AirDeccan is able to provide the lowest fares and still remain viable in this highly price-competitive Indian aviation industry. It is the power of innovation which helped Rasna to hold approximately 93% market share in the concentrated soft drink segment of the country despite the fact that it has stiff competition from big players like Coca-Cola, Hindustan Lever and Kraft Foods. Further, the innovative attitude not only helped Ujala challenge the market leader, Robin Blue, but also create its own identity in the liquid whitener market. There are companies like Coca-Cola, Nike, Revlon, LIC, etc., which lost their market share because they failed to innovate at the right time or they resisted change. A productive company follows a method of continuous improvement all the time. |
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A productive company has a "No Lay-off" tag attached to it. For such companies, employees are the most valuable assets and they are treated with dignity. In true sense, productive companies never face the need to lay-off people, because they know better ways of dealing with a crisis than just firing people. According to Jason, "Lay-offs destroy a company's ability to be more productive." A perfect example here is of Nucor. It reduced its production time of producing a ton of steel from 11 hours to 30 minutes. It pays its employees much higher than the average industry standards. The company has never laid-off an employee in its history.
According to Dan DiMico, Nucor's CEO, "When business is bad, as it's bound to be in a highly cyclical industry like ours, the first thing to go is every executive's perk and bonus, followed by every plant manager and supervisors giving up theirs. Only then are the workers affected, we'll
reduce the workweek to five days and then four and on some rare occasions even
three, but we never lay-off people."
Nucor has been following these guidelines since its inception. Jason further adds, "Lay-offs are a management fad used by untalented CEOs and managing directors." It has been observed that many companies follow their financial statements to judge how profitable they are, instead of focusing on the customers and the day-to-day running of the business. Focusing on these will automatically bring revenues for firms. Running after financial statements will lead companies nowhere.
Conclusion
Most productive companies focus on the customers to retain them and further to be productive. It's true that they don't do different things rather they do things differently. They have in them the ability and the guts to think of how they can change the traditional ways of doing things. All productive firms mentioned here have achieved the top slots not merely by fluke but by their strong willpower, hard work, dedication, taking calculated risks and making things happen rather than waiting for things to happen. Jason list's some points which every company that wishes to achieve its full economic potential must do. The list includes:
* Have a 'cause' that unites everyone in the company in pursuit of a common objective.
* Make certain that everyone within the organization-from the CEO down to the last employee-is constantly interfacing with customers.
* Strive relentlessly to eliminate wasted effort, work and process.
Brilliant companies offer solutions to their customers; they don't sell stuff. Becoming productive is a difficult task and difficult still is sustaining the position. But in this overcrowded business world the only option left for firms is to become as productive as they can.