BW Communities

The Anatomy Of Uncertainty

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Through the better part of the last decade, India witnessed GDP growth rates in excess of 8 per cent, with the economic downturn of 2008-2009 coming as a surprise to corporate India. At the time, a number of our clients witnessed a slowdown in business across many sectors. This resulted in an unprecedented focus on increasing productivity and bringing down costs. We also witnessed a number of businesses choosing to rightsize their workforce and putting hiring decisions on hold. With the latest economic forecasts indicating sub 7 per cent GDP growth, are we heading for a situation like the one witnessed in 2008-2009? It is unlikely. The past downturn was one that sparked off in the West, owing to a collapse of the housing market and the subsequent credit crunch, and the impact to India and other Asian nations was an after-effect of this damage. The crisis caught India Inc. unawares. Glossing over the high-growth patterns witnessed in the years leading up to 2008, most organizations in India were not prepared to deal with the sudden turn of events. It was a unique situation for business leaders who were accustomed to high growth, and it called for them to ‘unlearn' a lot of the ways in which they had been doing business. In the aftermath, we have found that the best organizations have emerged stronger than before. The experience of the 2008-2009 slowdown ensured the following: a. It created a pool of "crisis-tested" leaders and managers who were able to adapt business strategy to ambiguous market conditions. b. It forced organizations to finally address poor employee performance. As Jim Collins (Author of the best-seller "Good to Great") puts it: ‘People are not your greatest asset; the right people are!' c. It drove a relentless focus on productivity, compelling organizations to re-configure their operating models and structures to ensure efficiency. Seemingly, there is no "right way" to deal with the new business reality. What we do know is that organizations which weathered the storm of 2008-2009 are better equipped to address the current ambiguity. Our experience suggests that the following principles have worked well: <ul> <li>Make sure everyone knows what they have to do: Adequate role clarity is a must for work to be geared towards maximum efficiency. This will also help keep a tab on HR costs.</li> </ul>   <ul> <li>Don't blindly follow the herd: Workforce reductions, although the most painful, may sometimes have to be resorted to owing to business needs. If this is the case, the blueprint for it must be planned carefully and deliberately.</li> </ul>   <ul> <li>Trim the fat, but not the muscle: Use your performance management processes to identify the underperformers and take corrective action to address poor performance.</li> </ul>   <ul> <li>Continue to reward your top performers very well: Be sure to differentiate sharply between the top performers and the average performers – for a clear message.</li> </ul>   <ul> <li>Don't alter incentive programs in haste: Tweak your incentive mix only to reward the behaviors that your organization wants to encourage. Help calm frayed employee nerves: The vast uncertainty can lead to grapevine talk, thus impacting employee morale and motivation. Clear, consistent, two-way communication is required here.</li> </ul> Having said that, despite the clouds of uncertainty, in this case, history may not necessarily repeat itself; what matters more is how much we have learnt from it – or perhaps, unlearnt – and how we can apply it to the future. (The author is a Managing Consultant heading Hay Group's consulting operations in New Delhi)