Business sustainability

Sustainability during the economic down-turn

Business organizations conduct their core business to continue it in the long-term. Sustainability of the business during the economic slump and financial crisis is a major task faced by many organizations irrespective of the size they carry and the geography they share. The onslaught of the changes in the external environment is quite often acts as havoc on the general operations of a business and takes a heavy dent on the sales and revenue which can force the management to opt for some drastic measures within the organization to balance the whole situations. When an economic depression is a wide-spread scenario across the globe, it is a reality that even the business units at the other end of the spectrum are also turn red. Besides the collective efforts among the nations to combat this dangerous malady called slow-growth and lack of proactive economic activities, individual business units must assume supreme responsibility to behave and act in a mature and ethical manner so that a collapse (internal) can be avoided in total. This should be initiated with a renewed vigor in formalizing a vision that fits into the present economic realities and the inevitable struggles ahead. The resource crunch faced by many units force them to have a re-look at the processes by which they carry out their basic operations. However effective they were during the yesterdays’ richness, the same measures can prove futile and worthless in the midst of turbulent changes outside. The simple logic used by responsible managements during times of such crash is to primarily focus on improving the business processes by identifying the nature and supply-chains within and the element of cost involved in delivering the outputs/services. It is common business wisdom to understand that each transaction within or without involves an element of cost and if unheeded, will lead to an unmanageable proportion. Similarly, the structure and purpose of the supply-chain also decide the necessity and quantum of the monetary resources stocked in each link. To remain competitive and superior in performance, transactions are to be effected much faster than the customers’ and competitors’ imaginations as well as all decision-making processes are to be fine-tuned to create much more value along each stage of the supply-chain. And during tough economic times, progress-oriented organizations turn their attention inward such as strengthening and empowering vital departments like Finance, HR etc so that they can support management in areas of strategic decision-making. Such departments can play crucial roles in devising an adequate and viable decision-support system which must have the potential to transact business with less cost and maximum efficiency.

Finance Department

The need of the hour for the Finance/Accounts department is to re-invent itself and must feel the need to wake up to the situation proactively rather than distancing away from transforming the finance and accounting functions. This is done with better reports and analysis instead of choosing to stick with the routine post-mortem statements. Here comes the utility of data and Business Intelligence (BI). The efficiency of the accounting processes can give the firms a cost advantage vis-à-vis their competitors. This department must have an even greater leverage in visualizing a process that is embedded in the total system which can magnify the management’s chances to come up with decisions and solutions to the organizational problems. Being the pillar among the multi-disciplinary functions, it should be able to devise a package of valuable policy tools to arrive at real operational effectiveness. In no uncertain terms, it is the responsibility of this vital department to take a closer look at the core business processes, the cost and current risks involved as well as the controlling system put in place. Looking at how the key programs are being managed and how effective they contribute to the overall goals of the organization is a journey in the right direction. It is high-time such a department shed its habit of becoming an area simply for processing some payments based on half-baked projections and budgets with full of deviations. The following agendas should be made a daily scheme of life by this department during the prevailing economic downturn:

a) A holistic view of each and every transaction/activity. Each functional area can struggle, fight or compete for resources, directly or otherwise. But it is very imperative that cash should be preserved and saved from being funneled into unproductive and personally-biased areas;

b) Care should be taken to implement an effective system of processes within and without the departments so that efforts of the working force are better streamlined to the goals of the company. Such a measure will ward off waste and inefficiency;

c) Propagate the tenet that stricter auditing of activities and functions are to be conducted not only in the field of Accounts and Finance, but other areas will also be brought under the scope of inner audit by respective departments with a view to enhance productivity by identifying waste and makes employees accountable for their actions;

d) A task-team should be formed with an object of studying the nature, scope and value of each and every element of expense and cost so that the value these are contributing to the overall functions can be gauged with a view to coax out the less utilitarian ones.

HR Department        

Though not similar to the Accounts/Finance, a Human Resource Department can play a prominent role when the business is going through rough patches.  Dealing and wheeling in mere paperwork is not only shameful but, frankly speaking, is like giving space to a white-elephant. It is satisfactory news that almost all companies do have a proactive HR, but some of the managements have to look into whether the existence of such departments possess some questionable value or involve considerable financial burden! It is surprising how and why some management sustains an HR Dept whose main pre-occupation seems like giving an entry for the aspiring candidates into the organization and thereafter it is a dysfunctional unit. Along with Accounts/Finance department, this functional area can pioneer the object of sustaining the business operations in a period like contracted growth and pressurized revenues. At this phase, it is imperative that every HR departments must turn their attention on:

a)  If it is stuck with its traditional role, it is high-time that such a department should come out of the shell to see the world outside and feel how the latter behaves during times of stringent economic conditions and looming threats;

b)More than carrying the burden of staffing the organization, it shall take pain in training and managing people so that they along with the organization can perform at maximum capability in a highly fulfilling manner;

c) Talent management, as a priority, should be added to its operational policies. These are nothing but activities to attract, develop and retain best of the employees in each department. Unproductive areas/elements will flourish in the absence of proper scrutiny, audit of performance etc. and may cause for the erosion of vital resources. HR should be very proactive and cautious in arresting such tendencies and may declare policies and programs to make activities more transparent and contributing to a common goal;

d) Employees should be taught the lessons of becoming responsible corporate citizens with discipline enough to contribute more with less. A tough endeavor indeed, but the results will be very productive and long-lasting. This shall be done along with establishing an adequate reward-system and compensation package. Fragile is employee morale and keep it intact at any cost or the cost may be high in delivering goods/services;

e) Regular interactions with other departments are welcome to improve their operations and efficiency and can act as a catalyst of change and innovation in improved processes. An open and transparent communication channel should be made possible as it enables and facilitates the sharing of information and intelligence to carry out business operations with ease and efficiency.

f) Last but not the least, be an ally of Accounts/Finance department and facilitate better business decisions with helpful and refined reports and analysis.

All these said and done, organizational effectiveness and performance are happening in the light of synergy among various functional areas and common understanding. Best efforts are always channelized into better outputs and overall goodness. In a critical period like this, let us all strive for attaining a personal leadership level which shall help us to be competent and inspirational for others. Altogether we can help to reduce wastage and inefficiency around us, provided we contribute our best with less within our assigned working hours.