Restructuring of a company

Restructuring should begin and end with the customer. To succeed in a highly competitive world, every business will have to listen to the customer, find out what he needs and deliver more than what he expects. Companies must go beyond just asking customers what they want.

Customers are notoriously lacking in foresight. Ten or fifteen years ago how many of us were asking for cellular telephones, fax machines, and copiers  at home, 24 hour discount brokerage accounts, multi-valve automobile engines, compact disc players, cars with on-board navigation systems, hand held global satellite positioning receivers, automated teller machines, MTB or the home shopping network? Sony, of course exemplifies creative marketing through its introduction of many successful new products (such as Walk mans, Video Cameras, CDs – ahead of their time) that customers never asked for or even thought were possible. The organization must take care of internal customers as well as fulfill the aspirations of employees working at various levels. Moving closer to the customer by:

–Communicating regularly in the media about organizational efforts to deliver quality products.

–Addressing customer complaints promptly

–Getting feedback from customers regularly.

–Organizing regular meetings with customers and major dealers.

–Conducting consumer contests to involve customers with the products.

–Carrying out Public Relations campaigns.

Companies now-a-days are using e-mail, websites, call centres, databases and database software for continuous contact between the company and the customer. They are prepared to do anything so as to deliver value, quality and satisfaction. This of course is evident even from the ads they come out with. For example, one of the automobile manufacturer ads says that the one reason their customers are so satisfied is because they believe in continuous improvement. Another auto manufacturer invites potential buyers to drop in for a guest drive (not a test drive) because the Japanese word for customer is ‘honoured guest’. McDonald’s in 121 countries attempts to satisfy daily on an average over 45 million people on the strength of its new age survival mantra of what the company calls – QSVC – Quality, Service, Cleanliness and Value.

The organization should make up its mind and decide what it is really good at making. Then it must divide itself into strategic business units  focusing on an individual core competency. Then, it should divide the individual SBU into core business processes by deciding what product attributes, technologies, designs, skills etc., are most important from the customer’s point of view. Once the key processes are identified, it is necessary to decide which areas need to be restructured as all cannot be done simultaneously.

In order to respond to internal and external signals quickly and to bring about a radical change in business processes, the organization should have an appropriate structure.

The challenge for the future is to teach an elephant to dance. Pyramids are tombs and they have to be ruthlessly demolished. The traditional double digit hierarchies should yield ground to multi-disciplinary work teams and task forces, sharing authority and decision making powers while realizing goals. Such a structural shift makes many of the levels in the organization shift to a flatter organizational structure where work gets organized around processes and not functions.

Many companies reorganize into permanent teams after going through a process called reengineering (Business Process Reengineering). This approach involves a complete rethinking and transformation of key business processes, leading to strong horizontal coordination and greater flexibility in responding to changes in the environment. Reengineering basically means starting over, throwing out all the notions of how work was done and deciding how it can best be done currently. It requires identifying customer needs and then  designing processes and aligning people to meet those needs. Reengineering can be applied to improve a single department or an entire organization. When a company reengineers a process, its management systems, job designs, and work flow are re-evaluated. There are four key elements in all reengineering efforts:

–First, the organization should define i.e. what it is that the organization is more superior at delivering than its competition.

–Second, the organization should assess the core processes that clearly add value to the organization’s distinctive competencies. These are the processes that convert inputs into products and services the customer values,

–Third, the organization should organize work around processes rather than functions by creating cross-functional, self-managed teams.

— Finally, reengineering attempts to tie up the firm’s activities closely with suppliers and customers. A close relationship between firms and their suppliers means that each partner specializes in an activity that it is best suited for. As a result, key suppliers can take up many of the tasks that the firm once did completely on its own. This would allow a greater supplier and customer involvement in a firm’s activities.

Firms begin to coordinate everything on the basis of what the customer has ordered and in turn get what they want within a time frame. This increases customer satisfaction  and reduces costs simultaneously.

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