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Why should you listen to your employees while taking tough decisions?


It is never easy to deliver the bad news to your employees, but bad things can happen to any companies. Sometimes, few external factors like economy or exchange rate can affect your company’s bottom line. And at that time, company’s very survival might be at stake. And hence, you might be put in to the situation, where you have to take those tough decisions as a company’s executive. The primary challenge during these situations is – Communication. If handled incorrectly, you might risk of losing your employee’s trust and tumbling their morale. In this blog, I would like to share one of the success story, where listening to employee’s input while taking these tough decisions have helped the company.

While taking tough decisions such as layoffs, restructuring, outsourcing, etc.; you should involve your stakeholders in the planning and implementation stages. You might not be able to involve all of your employees while taking these tough decisions, but you should at least engage your senior management and department heads in the consultation process. Depending on the situation, you might want to keep employees/employee representatives apprised of the situation to avoid any surprises. On various occasions, this strategy might prove to be helpful.

Take this company for an example (company X), where I recently consulted them for downsizing. Company X had really bad financials. It was clear that they had to cut down two of their product lines, which were not performing at all. And hence, they had to layoff few of their employees due to tumbling financial situation of the company. So, instead of announcing few layoffs, the CEO announced voluntary retirement program and some pay cuts. Surprisingly, I was able to collaborate with majority of their employees and get them to agree upon a pay cut and retraining program. As a result, we didn’t need to layoff anyone. Though this was a success story, it might not work for everyone. But one thing is clear. If you are willing to share information with your employees, they will not only value your decision but they might also come up with a plan to handle the situation better.

I hope, this example can inspire you to consider your employee’s input while taking these critical decisions. Have you ever encountered similar situation like this? Are you aware of any workplace/organization that considers their employee’s input before taking tough decisions?

Thanks. – Bhavin Gandhi.

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Posted by on October 24, 2012 in 21st Century, Leadership, Management

 

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I.T. doesn’t matter – Bhavin Gandhi’s Review


“IT Doesn’t Matter” is the article published in the May 2003 edition of the Harvard Business Review (Carr, 2003). It examines the evolution of information technology in the business world and demonstrates how IT is built into the infrastructure of today’s world. But as its availability increases and its cost decreases, IT will become a commodity input. And like any other commodity in the history, IT will not allow a business to create a competitive advantage. Hence, the author proposes not to invest heavily on IT projects.

The author makes several good points in his article such as – businesses have over-invested in underutilized technologies without analyzing its strategic advantage. For example, few years back I wanted to buy a new laptop. So, I bought a new MacBook Pro with Photoshop CS4. As a MBA student, I hardly use high processing applications. There was no need, whatsoever, for me to buy a Laptop with 2.6GHz of processor and 4GB of RAM. But I might have felt the need to be on the bleeding edge of the technology, and may be most of the IT enthusiast managers feel the same way.

While the author has many convincing arguments regarding his stand, I still believe that – IT matters more than ever in today’s world. The author seems to confuse IT with computing. Cars, Trains and Air Lines could be considered commodities. Transportation isn’t. I agree that major elements of computing have been turning into commodities, like CPU, RAM, Disks, etc. But IT is more than that (Freund, 2007).

Dr. Harold contradicts the author’s stand in his paper about technology and e-government. He suggests that without IT, effective and competitive organization is impossible and nothing gets efficiently done (Wesso, July 2004). He goes further by saying that – if IT is not being procured and deployed effectively and efficiently, then that matters very much. Appropriate IT use may not enable an organization or society to ‘get ahead’, but it is very vital just to ‘keep up’.

This article is based on the assumption that businesses have overestimated the strategic value of IT. I agree that businesses should manage the tangible aspects of IT as a commodity because the opportunities for ‘strategic differentiation’ with IT have become scarce. But I do not agree with the author’s stand on this topic. I believe that the author’s opinion might have been biased due to the ‘dot com’ bubble burst, as this article was written during that time.

I believe that the author has over-stated the fact that IT holds no strategic value at all. On the contrary, I believe that IT has become an irreplaceable part of the business. For example, I used to work in a company named Book of Odds, Inc. (www.bookofodds.com). Being a small sized company, this company didn’t have a big budget to spend on their marketing efforts. So, they utilized tools of social media to market themselves. This approach gave them more visibility than they would have got through other means of marketing. For this ‘social media marketing’ initiative, the company didn’t have to invest much in its IT infrastructure. But the benefits got from this initiative were way more than the investment. Thus, IT certainly provided strategic advantage for Book of Odds, Inc.

In today’s world, we are overloaded with information. And IT can help us analyze this information for our benefit. Thus, if use right – IT can differentiate your business as compared to your competitors. And IT matters more than ever, in this fastest changing world.

References:

  1. Carr, N. G. (2003, May 01). IT Doesn’t Matter. Retrieved Aug 24, 2010, from Harvard Business Review: http://hbr.org/product/it-doesn-t-matter/an/R0305B-PDF-ENG
  2. Freund, G. (2007, Jan 03). IT doesn’t matter, part 1. Retrieved Aug 24, 2010, from Rough Type: http://www.roughtype.com/archives/2007/01/it_doesnt_matte.php
  3. Wesso, D. H. (July 2004). Technology, e-government & economic development. Centre for e-Innovation.
 
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Posted by on August 30, 2010 in 21st Century, Leadership, Management

 

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Is Management more important than Leadership?


Leadership

First of all, I would like to thank you for reading my blogs. Lot of people have e-mailed me regarding my blogs. Ironically, most of them asked me the same question – “Is your blog about Leadership OR Management”? And I tell people – “My blog is about Leadership AND Management”. But people don’t seem to understand that.

I guess, it became fashionable now days to separate “leaders” from “managers”. Some people may define Leaders as – “those who do the right things” and Managers as – “those who do things right”. I used to define Management and Leadership in the same way, before I realized that I might be missing the big picture. Most of the Leaders don’t define management as a part of Leadership anymore. And that’s where they are going in the wrong direction. With this mentality of differentiation between Leadership and Management, many leaders are detaching themselves from the messy process of managing. Thus, most of the times they don’t know what’s going on.

Management

The truth is, many of the strategies in today’s world are built in isolation at the “top”. If this wouldn’t be the reason then we wouldn’t have seen major financial and automobile companies failing. Today, most of the Managers are told to meet their targets, or they will let go. This approach shapes-up Manager’s thinking. Instead of taking risks to create new opportunities, they become busy in meeting their targets. Besides, with so many of their colleagues gone in downsizing, they feel like, they have less and less time to think. This approach induces a big gap between Management and Leadership. Instead of thinking about the long-term vision (right thing), Managers become busy in looking good for the next quarter and “doing things right”.

Leadership and Management

Leaders/Managers of today don’t understand the fact that – Leadership and Management, both are interlocking competencies. One can’t exist without the other. I see leadership within the positional powers of managership. I understand that Managers are focused on serving the short term bottom-line numbers, to serve their own survival; while Leaders are suppose to live by the values in serving the larger and long term interest of stakeholders. But if Leaders start to manage within their organization, instead of impressing outsiders, then the organization can be efficient and successful. As far as my question is concerned – “Is Management more important than Leadership?”, I think that they both are really important. And if we can somehow create a tight bond between Leadership and Management then we can avoid companies from failing.

I hope my blog helped you in understanding yet another perspective of Management. If you have any other opinions then feel free to share with me on my blog.

Thanks. – Bhavin Gandhi

 
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Posted by on August 17, 2010 in Leadership, Management

 

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Managing Major Failures in Your Business


ManagingFailuresThose days are gone when businesses were small and local. In today’s world, businesses are becoming more and more complex. And brands are becoming bigger than ever. So, what happens when you encounter a failure in your business? What would you have done as a CEO of Toyota, during the tough times in 2010? What would you do as a spokesperson of BP, when you realize that there is a major leak in your new plant? I might not have an ideal answer for what you can do during situations like those, but from my personal experiences and observations, I have few suggestions to deal with situations like those.

First thing that you want to do in these kind of situations is to be accountable for your failures. Everyone remembers the gulf oil spill by BP. In today’s business world, accepting the failure isn’t the sole decision of the CEO. By accepting the failure like this big, they might be ruining their brand image. Whatever may be the case, I recommend you to take responsibilities of your actions. Remember the famous case of Tylenol? It was company’s quick acceptance of the problem, which saved the image of Johnson and Johnson.

In any major failures, you need to be transparent with your stakeholders, no matter who they are. A good example of this is – Toyota’s gas peddle fiasco. On July 29 of 2010, Toyota recalled approximately 400,000 cars for their problems in the gas peddle. Before this incident, Toyota was perceived to be the safest automobile maker in the world. Guess what Toyota did? They utilized lot of 21st century’s media tools like Facebook, Twitter, etc. to reach to their customers and admit their mistakes as a part of their immediate response. They also had a lot of TV and radio commercials within a month to communicate with their customers about what they are doing regarding this issue. This effort from Toyota helped them to keep their “brand value” intact by communicating their efforts to their customers.

I think that businesses might be becoming complex and failures might be becoming very difficult to handle, but if we can accept our failures and act on them quickly then we can minimize the impact of those failures.

I hope my article was helpful and I am eager to hear your feedback. Thanks. Bhavin Gandhi.

 
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Posted by on August 8, 2010 in Leadership, Management

 

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