Sunday, 21 July 2013

Building World Class Organisations


An article published in DARE Magazine

Happy customers only goal for world class organizations

World class organizations do things differently to be the best of the best.

They believe in setting standards of excellence, whether it is in quality,

customer service, innovating, creating value, or taking caring of their staff.
                                                                                                 By Ravi Talluri

World class organizations produce superior goods and services, ranked by customers to be among the best of the best. They strive for excellence not only in their own industry, but other industries as well. Being “world class” means setting incomparable standards of excellence, in design, performance, quality, customer satisfaction and value creation. Few Indian companies currently belong to this hallowed club; indeed for many of them just surviving the white heat of global competition is a challenge. But, clearly there is ample scope and opportunity for Indian organizations to become world class—if only they could change the paradigm. Having worked in USA and India for more than two decades, I would like to share my insights on how we can become world class.
Customers: Customers are the very cause of the existence of the business. The business starts and ends with customers. Understanding customer requirements and then fulfilling them with suitable products and services is of paramount importance for the success and growth  of any organization. World class organizations continuously strive for complete customer satisfaction and aim for customer delight. I had the opportunity to work for some Fortune 500 companies in USA. In our quarterly review meetings, the first item on the agenda was to discuss customers and their feedback. I have never attended a quarterly meeting where the first agenda was not customers. I was once informed about a customer issue in the middle of the night. The customer was upset with the performance of our product. I immediately asked for the product to be replaced and met the customer. The customer was pleased because we replaced the product immediately and made sure that there was minimal disruption to his production schedule. Later on, I briefed my senior management about the issue. The entire top brass of the organization backed my decision to replace the product immediately. They felt that I took the correct decision to make sure that complete customer satisfaction was ensured. A couple of weeks later, the customer mentioned the incident and our dedication and passion for customer satisfaction in an international gathering. This further enhanced our market image. Customer feedback and satisfaction was the guiding force for developing corporate strategies. Indian companies should make it a point to spend more time with their customers and make complete customer satisfaction their top priority. Understanding customer requirements and meeting their expectations is very vital for the long term success of Indian organizations. Customer feedback is important for gauging customer satisfaction levels. Formal mechanisms should be deployed for understanding customer requirements and capturing their feedback. This information should be used for developing and improving products and services. Employees should be informed about the importance of customers, their satisfaction and their feedback. What sets world class organizations apart from the rest is how well one understands one’s customers and offers them products and services which meet and exceed their expectations.
Capturing customer needs, aspirations, expectations, aversions and requirements is the voice of the customer. This can be done by direct customer interactions, market surveys, observations, warranty data, etc. Once the voice of the customer is captured, the data has to be organized. Tools such as affinity diagrams, QFD, etc., are helpful in organizing the data. These methodologies and tools will systematically link the voice of the customer with various business functions such as marketing, design, quality, production, manufacturing, sales, etc., and align the entire company towards designing and developing products and services to meet customer requirements.
Value creation: The most profitable and fastest growing players in their respective markets put value creation first, not growth or size. These world class companies have built their business models around value creation. Their focus is on value creation for customers, stakeholders, their employees and suppliers. High value creation organizations constantly challenge themselves and ask what we can do that is different from the competition, and how we can create value. Value creation for customers means developing and offering high quality products and services that they find useful and that give them complete satisfaction. Providing superior value to customers results in long lasting customer loyalty. Value for employees means being treated respectfully and being involved in the decision making process. Employees value meaningful work, excellent compensation opportunities, and continued training and development initiatives. Providing consistent and superior returns is value for the investors and stakeholders. If Indian companies want to grow to greatness, they have to put value creation first.
Innovation: To meet the changing aspirations of customers, world class companies are constantly trying to offer innovative products and services. Those who are unable to innovate are in the process of losing business. World class companies encourage employees to develop innovative products and services. While I was working for an automotive company, our group came up with a proposal to develop an airbag to save a child in a mother’s womb during a crash. The management gave the green signal to develop such a product. Organizations should continuously focus on product and process innovation. Product innovation will help organizations to stay ahead of the competition. Process innovation will help them to become more flexible and improve quality standards. Few Indian companies are pioneers of innovative products and services. Innovation is essential not only for gaining competitive advantage, but for the survival of organizations. Employees should be encouraged and empowered to look at opportunities and challenges from a different glass prism. Conducive atmosphere should be created so that it allows employees to engineer innovation. World class companies do not rest on their laurels, they continuously focus on how to make products better tremendous importance to continuous improvement.
Quality: Superior quality products and services are the hallmarks of world class organizations. Quality is everyone’s job. This culture should be ingrained in every employee of the organization. Quality is not inspected for; it is built into the product or service. Quality at source is the philosophy that is adopted at the early stages of the product concept. Every employee feels that it is his/her responsibility to produce world class products or services. Customers are expressing their loyalty by buying superior quality products. Superior quality is the shortcut to becoming world class. Quality is a journey, not a destination. World class companies are obsessed with superior quality. A mindset change has to take place and quality has to be looked at from a different perspective for Indian companies to become world class. Quality is not just about performance. It starts from taking the order, delivering the product, after sales and service – the entire lifecycle of the product. Customers are delighted when they buy products or services from world class companies.
Quality is a journey, not a destination. World class companies are obsessed with superior quality.  A mindset change has to take place and quality has to be looked at from a different perspective for Indian companies to become world class. 
Ravi Talluri
Management Consultant

Benchmarking: World class organizations are continuously benchmarking themselves against the best of the best and striving for excellence in all areas. In fact, some world class organizations spend a lot of time studying the competition, understanding their organization, reviewing their products and strategies. Organizations set tough internal standards and try to exceed those standards. This is how they became world class organizations. World class organizations benchmark customer satisfaction, financial performance, product quality and performance, internal processes, productivity, employee development, safety, etc. Companies identify various metrics for benchmarking based on the products and services they are offering. Companies use both internal and external benchmarking approaches. I had an opportunity to work on such a benchmark assignment while I was working in USA. The benchmark set was against that of a Japanese company. Though USA and Japan were rivals in business, everyone agreed to benchmark the Japanese company. The group spent several months in the benchmarking exercise. This helped in the development of better quality products. Organizations have to make it a habit to continuously benchmark and strive for excellence. Indian companies have to assess to know if what they are doing is the best and what they are on their way to achieving is truly world class. They should benchmark against high performing organizations. Organizations have to aim for the highest standards and implement plans that will help them to join the world class club.

Leadership: The success of world class organizations can be traced back to leaders who possess world class leadership qualities. I was fortunate to work with a senior executive of a Japanese world class company. This leader would not be satisfied with anything less than excellence. He was very demanding and would never comprise on quality and safety aspects. He led by example. At times, when I could not solve a problem, he would stand by my shoulder and show me how to solve the problem. I was surprised by his dedication. Though he was a very senior executive, he would stand along with me for more than 12 hours and for several days and help me solve the problem. Though my association with this leader was for a very brief period, I learned a lot from him and understood how his company had become world class. World class companies are not built overnight. Leadership plays a vital role in shaping the destiny of any organization. Some of the common traits of leaders that I have observed are: They have a very clear vision of the organization; they communicate well with employees; they have impeccable integrity and live by example; they are very passionate about what they are doing and dedication is in their DNA; they nurture creativity and allow openness and treat all employees equally; they are very aggressive, yet they live with humility; they take stress very well and do not get frustrated very easily; they do not accept anything less than excellence; and, they are constantly looking at the future. Indian companies must identify and nurture the right leaders and, more importantly, allow them to transform the company into a world class company.
Organization: World class organizations take a lot of pride in their human capital. The quality of its employees is a report card on the world class status of the organization. These organizations not only attract the best talent, but also retain them. Employees are very well respected in such organizations. Continuous training and development of employees is the hallmark of world class companies. Conducive atmosphere is created so that employees can make meaningful contributions to the organizations. Creativity is nurtured. Employees do not join these organizations just for the compensation packages. They look beyond compensation; they look for recognition, growth, development and happiness. They get plenty of these in world class organizations. Indian companies also have to reach out and should have the insatiable desire to become world class. The need of the hour is the spirit to become world class.
The journey is full of challenges, yet it is possible to achieve world class status. I am an optimist. I will be looking forward to the day when I can write an article about how Indian companies have become world class. Perhaps, that will be the proudest day for all of us.
Ravi Talluri worked with auto majors in the US and is currently a management consultant focusing on SME and rural development. Ravi teaches at various engineering and management colleges in Andhra Pradesh. He lives in Hyderabad.




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