Managing Through the Meltdown

With financial turmoil continuing and strong indicators of a worldwide recession, the challenge of deciding how best to respond is pressing on nearly every business. While taking rapid action can be critical, the risks of hurting your company’s ability to take advantage of opportunities, or to position itself for the eventual upswing, are high. Across-the-board hiring freezes or X% staff or budget cuts work quickly, but don’t discriminate between “fat” and “muscle.” Hasty decisions can discourage people even more than the business conditions themselves—if they see the actions taken with little clear rationale. Even though many leaders recognize these “unintended consequences,” they are at a loss for an alternative.

The good news is, times of crisis offer an opportunity to sharpen people’s commitment to change and to challenge assumptions that stand firm when things are “fine.” With the right leadership and focus, fear can be channeled into action that makes your business leaner and meaner, and even better at delivering what your customers really want. (They’ll be relying on you, or your competitors, to help them when times are tight!)

With guidance from Pivotal Resources, many of our clients are using the following techniques to steady their operations and protect their profitability:

• Look for Untapped “Synergies” - Many companies have longstanding duplicate functions, often the legacy of a past merger or reorganization that was never fully integrated. Now may be the time look harder at those redundant efforts and really finish the merger process. [See related article on the right]
• Rethink How You “Delight the Customer” - Believe it or not, some of the “special things” you do for customers may not be all that important to them. You can cut costs, and refocus on real value-adding activities, by scrutinizing and even eliminating some unappreciated extras.
• Focus on “Manual” Versus “Automated” Solutions - The notion that automating an activity will make it more efficient sounds good in theory. But in practice the up front investment to achieve those savings, not to mention the lead-time and effort required, can be huge. Now may be the time to look for ways to work smarter by having people do things better and differently (or not doing things that aren’t important) and put off that big IT push.
• Take on the Big Opportunities Now - Slower business volume (which hopefully will be short-lived!) can give you the time and resources to launch more aggressive business transformations. Somewhat like a butterfly, you may use the tough times like a chrysalis, reforming in key areas so you emerge in a totally new-and improved- form.

Easier said than done? Of course! Depending on your circumstances, the best response might be go into survival mode and wait for better times. On the other hand, it may be your competitors who are making the best of a challenging situation, or your customers who are rethinking their future needs. So, simply laying low can have its risks, too.

Pivotal offers a variety of services that can help you make the right moves in uncertain times. These include:

• Facilitated Working Sessions to define opportunities and set priorities for quick efficiency improvements.
• Operational Diagnostics to pinpoint non-value-adding activities in the business and problems that are consuming time and resources.
• Kaizen/Workout Events that drive short-term action and results.
• Leadership Assessment and Development services that help your managers and executives make smarter choices, adapt to new challenges, and lead change.

No matter how you respond, or how long the crisis impacts you and your organization, responding effectively to challenges is now a fundamental business competency. Today’s turmoil may actually present a valuable opportunity to test and build your ability to adapt and thrive.

For details and questions on Pivotal’s change services, please contact us.

Product Focus: Project Execution & Change Management Consulting

Pivotal’s clients achieve faster results and deeper impact from critical initiatives through the help of our skilled change project leaders.  Our consultants work with you to clarify opportunities, devise solutions and get them implemented effectively.  Some current examples where our energy and expertise are adding value:

• Leading Financial/Brokerage Firm:  Pivotal’s team is partnering with internal teams to streamline key cross-business operations
• Global Energy Company:  We’re helping lead efforts to better capture and leverage millions of dollars in IT expenditures
• Fast-Growing Apparel & Footwear Company:  Ensuring this “hot and hip” brand can meet demand and expand margins as sales increase.
• Integrated Telecom Utility:  Our consultants are driving critical customer service and cost savings efforts.  Also helping refine the firm’s strategic Performance Management system.

Pivotal's consultants provide a unique blend of technical/analytical skill with expertise on building alignment and support for change (where even the best initiatives often fail).  And while our focus is on results, we also work to coach your people so they become more effective change agents.

Learn more about our Project Execution and Change Management services.

Pivotal Around the World: India & South Asia

Pivotal Resources’ India/South Asia operations is based in New Delhi, with consultants in various regional business centers.

As one of the primary engines of global economic growth, companies in India and South Asia are facing the challenges and opportunities of rapid change.  Pivotal India helps these companies combine efficiency, creativity and discipline to help strengthen their product and service offerings.  With clients including HP, Hero Honda, Microsoft, Hindustan Times and Maruti, Pivotal India provides executive training, deployment-consulting services in business improvement along with Lean Six Sigma and continuous improvement training.

Praveen Pasricha, Head of Operations for Pivotal India, noted that “Many companies in India—local and multi-national—are using business and process improvement methods, but are still getting limited benefit.  Pivotal’s global experience offers insights to take these investments to a new level and have a more profound impact.”  Pasricha and his team have deep backgrounds in business change and have worked with companies in diverse industries throughout Asia.

“The expanding interest in our innovative way of driving business change is extremely exciting,” commented Pasricha.

For further information, click here.

Clients In the News:
Macy's Logistics and Operations

The Conference Board recently invited our client, Macy’s, to share their success story during the Six Sigma Leadership Conference in Chicago. Learn how they accelerated their business results and their overall customer satisfaction while driving an exciting new business culture. From a few pilot projects to a diverse array of efforts, we are proud to have helped Macy’s surpass their goals!

Read the full story here.

Mergers & Acquisitions: How to Avoid a 'Merger Gone Wrong'

The following is an excerpt from a recent Forbes.com article Pete Pande, President of Pivotal Resources wrote.

In 1996 Pivotal Resources was engaged to support the launch of "Six Sigma" at GE Capital, the financial service unit and most profitable part of General Electric. While a lot of that effort was focused on training people to cut costs, win business and improve service, some perceptive managers began to recognize that the principles of an effective business process could apply just as well to the act (also a process) of "onboarding" a newly acquired business. Beyond that, the steps of defining goals, gathering facts, evaluating the situation and developing solutions provide a valuable framework for executing the integration.

Greater discipline and consistency also enabled greater flexibility, as integration plans and decisions were based on a better understanding of what each acquisition really needed to be successful. A recent Harvard Business Review article notes that "this commitment to learning, codification and continuous improvement had helped make GE Capital a world-class integrator across the globe." ( HBR, December 2007, "Deals Without Delusions").

While your company may not be a "serial acquirer" like GE Capital, you can borrow from some of its practices, and those that other companies have learned, concerning how to raise the odds of a successful deal:

1. Start early
2. Focus priorities, goals
3. Engage a strong Leader with a balanced team
4. Put processes first
5. Balance urgency and results with flexibility, persistence

Read the full article

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