Recession - Is this the only time for efficiency?

How do you understand the concept of efficiency??

A few weeks ago I sat in a meeting with a major financial institution in South Africa and we were discussing the global economy and what actions the bank should take to deal with the challenges ahead. I asked a senior manager how many people stand to lose their jobs and after giving me the figure the manager added: "During the good times we've built in some fat, so I guess it's ok..." My immediate response to this was: "Why did you build fat in the first place?" The question I raise today is that many organisations tend to overlook the importance of efficiencies when the going is good, but when the going gets tough we go into crises mode and we want to retrench people...

In a time of recession many organisations find themselves in the middle of an economic storm, but I can't help to wonder how much "fat" has been "collected" over the good years. We had skill shortages during a time of growth and this was probably a contributor to the fact that our managers are not performing their management roles as effectively as they should. They have been performing technical functions because there weren't enough hands to get everything done. Management focus means creating value through increasing revenues through acquisition of new clients, new product development and minimising cost as well as improving efficiencies all the time! Managers seemed to overlook the importance of this important management activity.

In another organisation the impact of the commodity prices and the rand/dollar exchange rate is obvious, but in a recent meeting with senior managers of this organisation, they said that they could improve their overall efficiency by approximately 25%. Now imagine if all organisations in Africa and the Middle East can improve their efficiencies by 25%? It will have an enormous impact in the sustainability of those organisations, which will possibly help them through tough times.

A recent study shows that if an organisation improves their efficiencies by 10%, the sales, marketing and business development functions of the organisation will have to double their sales and new business in order to have the same bottom line impact. Doesn't it make sense then to focus on improving our efficiencies, unlock the creative energy of our people and get them to come up with ways to make the business more cost efficient and more protitable?

How does the efficiency look in your organisation?

Management-leadership chaos

Forty years ago organisations had no idea what the role of a manager was. Managers in organizations were perceived as individuals with clear desks and the privilege of reading the newspaper in the morning. This role was unclear, and no one knew what these so called managers were supposed to do. We realized that being a manager was not the only important thing but that leadership competency played an even more important role in some cases. Louis Allen has never separated management from leadership.

Many researchers embarked on scientific research to identify what these roles are and over the last four or five decades we managed to understand more and more the complexities and challenges of management-leaders. We realised that the job goes beyond dishing out instructions to "subordinates". This job has become a conceptual job where managers have to manage and lead people, manage processes, evaluate and improve technology and systems. It is definitely not the application of technical or operational work. Management is a conceptual job that requires a different set of skills.

It is this conceptual ability that made me think. How is it possible that we have 4 decades of research under our belts, a "clearer" idea of what management-leaders should be spending their time on, but they are still operational, technical and fighting the proverbial fires every day? How is it possible that the majority of managers still fail to engage people in their jobs and their organisations? How is it possible that the majority of managers still do not succeed in motivating and retaining the key talent in their organisations? How is it possible that our managers still do not have the ability to create a value system for employees which they can relate to? How is it possible that a majority of managers fail dismally in creating clear vision and direction for employees? Our management-leadership is in chaos.

Where is the gap then? What are our management-leaders not doing? We should be able to lead and manage the people in our organisations to becoming value adding corporate citizens. We should be able to increase the level of engagement and commitment of our people and get them to believe in the values of the organisation. We should be able to lead them to experience the success of achieving results constructively, and not be managed by fear of those managers who abuse their positional power. We should focus less on the political dynamics of our jobs and more on getting people to work,to add value and to get rewarded for what they have achieved.

In many cases we as managers have lost our ability to apply management basics. The answers to these questions might seem very complex but the reality is that for every question there is a very simple management solution.

Louis Allen Southern Africa has decided to make more effective use of technology available to have electronic conversations with our alumni, existing and potential clients and those that have a vested interest in improving this crucial element in organisations. We will have conversations about management related issues which our management-leaders are facing in organisations. We can help to improve the management capacity of organisations internationally and therefore make them more effective. We also hope to create a place where we can discuss and find answers for these management challenges, especially the challenges that have not been researched or published. I believe there are many of these out there..

I am looking forward to have these conversations with you.