An ISO certified railway machinery and road construction machinery manufacturing organization- transitional / growing ( 500 employees core and contractual- turnover 250 Cr). 3 factories- 2 in Patna & 1 new in Haridwar


Problem Areas

• 3 different factories located in two different geographical areas
• Management dispersed with informal reporting
• No formal organization structure
• Roles and responsibility delegation done in an ad hoc manner
• Disconnect between senior management and deliverable elements in the company
• Existing Middle Management non performing due to ineffective delegation of responsibility and authority
• Upper management spending far too much time in reactive and situation control activities with no time left for planning , strategizing or expanding
• Employee agitation on a rise with no clear communication regarding demands and reasons for agitation. Productivity drastically affected
• Delays in production leading to customer dissatisfaction

Current Situation Analysis

• Without the presence of a formal organization structure the expansion of workforce had been performed in an ad hoc manner without realizing where the employees ‘fit’ into the organization
• Compensation and benefits decided on a need basis without internal or external benchmarks leading to discontent in the workforce and a great variation in pay package
• No appraisal system in place so incentives and promotions were handed out based on upper management decision without clear communication about merit
• Although ISO certified, quality check was performed perfunctorily resulting in customer dissatisfaction and expenditure on after sales service and rework
• The organization has a large manufacturing portfolio with over 22+ products- and almost 50% of them requiring redesigning and redevelopment as per client requirements. Only 2 products were consistently in demand and standardized

Findings

• Documentation and assessment of time taken to complete production of a particular product is non existent. Status checks performed on a need basis. E.g. production cycle dependent on delivery date as per order or tender. So upper management would constantly call supervisor level employees to push them to deliver.
• Reporting structure is informal- only ISO documents maintained while report generation at every level is ad hoc and performed through the telephone.
• Each director operates independently and interacts with each department separately. Sharing of information between departments was again informal and often there is a repetition of work and miscommunication of priority. The employees at lower levels are forced to choose which director to give priority to.
• Interdepartmental rifts exist due to lack of defined roles and responsibilities leading to a complex blame game where tracing the source of an error is almost impossible. Each employee is forced to point fingers in fear of losing their jobs.
• Disconnect between directors of each department regarding their own roles and responsibilities. Ownership issues arising from this disconnect and non division of work.
• An expensive ERP package is introduced but has not been made operational in almost 8 months due to the lack of an organized and sound foundation.

The Solution

VNV believes that the introduction of beneficial change in an organization must begin with defining and laying down a sensible framework within which the organization can function.
Benefits of change cannot be gauged in an environment that does not have a framework or base of comparison.
Therefore, we identified the 2 most important factors that contributed the maximum number of problems and bottlenecks:

• The lack of a formal organization structure- leading to differences in perception of ‘who is my boss?’, ‘where do I stand?’ and ‘where do I go?’
• The lack of formal role, responsibility and authority- among the board of directors in the organization leading to a conflict of interest and overlap of responsibility.

The results are repetition of work, double communication with employees, no clear line of control and ownership, forcing employees to prioritize orders on their perspective of which director has more authority than the other etc.

We realized that a top down approach to change was the only applicable solution. We designed exercises in order to convince the upper management in to rethink their working methods.


Our VNV Exercise

The Organization Structure Exercise- each director drew an organization structure, identified tiers and employees. On superimposition each chart drawn by each director was found to be drastically different from the other.

Key findings:

• Employee tiers were mismatched
• Members of the board of directors were mismatched
• Key employees were missing or misplaced
• Multiple reporting arrows drawn in a top down and bottom manner clearly showing that an employee at a lower tier had to report multiple times to multiple directors

The 180° Roles and Responsibilities Exercise- Each director drew a table of his own roles and responsibilities. Other directors were asked to list all the other directors roles and responsibilities. This resulted in a 180° assessment by peers.

Key Findings:

• Some directors held multiple responsibilities and were involved in every department of the organization
• Several orphan responsibilities were discovered which were delegated to several directors
• Clarity about the deliverables of each director was nonexistent

Home Grown Solutions

In order to maintain the working style and best practices within the organization it became necessary for VNV to conduct a brain storming intensive week long session with the board of directors. VNV acted as a guide, advisor, consigliore, teacher and information source during this session.

Key results of the brain storming:

• A simple hierarchical organization structure was derived from the amalgamation of all the different perspectives of the directors. The structure took into account the current designations of each director and the departments under them. (note: VNV thought why spend money in printing new business cards with new designation)
• Existing departments or divisions in the organization were identified and a comparison was charted between their current function and their expected function.
• A workflow diagram was drawn with inputs from the directors directly in charge of the departments (note: often there were multiple opinions for some departments which had multiple directors involved in its day to day functioning). The work flow diagram brought clarity and focused on the bottlenecks in communication that existed between each department . It highlighted the necessity of understanding the role and interdependence of each department as well as the type of communication required at each stage.
• The 180° table that VNV presented to each director was used as a base for prioritizing the work of each director and also for understanding the amount of time spent on productive managerial work.
• Division of role was created making a department the sole responsibility of one director and all advice or communication to employees under the director would be done solely through him / her. The performance and internal structuring of each department is the responsibility of the director in charge.
• Directors were made to create their own Job Descriptions, priorities and deliverables.
• An ‘Actions to be Taken’ was created for each director and timeline of 15 days given for finalization of department structure.
• Implementation happened only after all the board directors were clear and agreed on all matters.

Note: VNV advocates using the experience of a director for shaping the performance requirements of their own departments. Vacant positions in the organization framework must first be filled internally wherever possible to save cost and also to promote employee loyalty and motivate employees in growing within the organization.


Pitfalls and Progress

Things to remember:

• During the implementation of any solution new questions will arise
• One must always make room for flexibility
• Your organization is a reflection of your working style
• The success of the implementation will allow you to collect the correct data which will in turn help you plan manpower requirements, best fit in the organization, salary structure, expansion, budget etc.
• VNV serves as a source of all information and is present to check, guide and channel implementation actions in a constructive and cost effective manner