DAT - Do As Told.

Overly curious and hyperactive children are a challenge and exhausting for almost all parents, particularly during the periods when the school and college were shut for vacations.

Our parents and Uncle and Aunts conceived an eminently practical and useful solution. They packed us four brothers off separately to accompany either our father or Uncle to attend either the office or the factory.

At work since we had no real responsibilities we were given little errands and small to do projects. We would often just loiter around and did pretty much what we wanted. This was learning by simply walking around and generally bugging employees with questions and requests to teach us various stuff or give us something to do.

We aspired to be like our dad and uncle and simply could not wait to grow up.

When you are 10 years young a factory is a wonderland worthy of exploration. Bit by bit we learnt a lot without even realising it, about what our dad and uncle did and how things were run.

The only thing I could not understand why they had to work so hard. They had no time for themselves, to relax, to even have a meal without stress or to take a holiday etc. It seemed that all that work was more punishing and with each success the problems and issues only multiplied while their patience declined.

I discovered several reasons in a generation that had lost much in the India-Pakistan partition and other such misfortunes.
  • The elders loved working. They enjoyed what they did in spite of all their grumbling and ranting.
  • Another reason was this unusual Punjabi quality of never giving up and to always seek to rise to the highest of one's potential. This is a quality doubly reinforced when you have lost everything and had started life again as a refugee. Our family had sought refuge in the Indian motherland after having left Burma as refugees in 1964.
  • Possibly the main reason for their being no freedom from work was their rather strong personalities which permitted them to work fantastically as individuals. Unfortunately this trait can sometimes inhibit team work and adoption of structured and organised ways of working. They thus had to rework decisions, and actions, and they lost a lot of time and resources. They operated sub optimally if not poorly on many fronts. Only hard work kept them going successfully.
  • Unstable business and social environment do not easily permit delegation.
There is a limit of how much two individuals can do and endure. They grew in size and complexity but diminished in efficiency. (Henry Ford was a remarkable exception, who grew fantastically in a similar style of management and had an almost spectacular collapse and was saved only by good fortune).

When I was 13 years young a small incident planted a big bug in my mind.
The route from home to our factory led us past three well reputed Swedish engineering companies, Atlas Copco, Alfa Lava and Sandvik Asia.
One day en-route to our as we were driving past the Swedish companies my Uncle and the office manager Mr. Parekh started discussing about the fantastic financial results announced by Sandvik as reported in the previous day’s newspaper. It appeared that Sandvik had announced a 63% jump in sales and net profits. The company had also announced a 1:1 bonus for all share holders.

Here was the million dollar question; My dad and Uncle were owner managers who worked long hours, so very hard and yet they had so little to show for that effort. Here was a company based in Sweden, which worked only 8 hours a day, 5 days a week, had no owner sitting here in India. Yet Sandvik ran like clockwork, supplying a seemingly insatiable demand for world class products and produced spectacular technical and financial results year on year.

I admired my dad and uncle for how smart they were. I had big dreams, I so wanted to be like my Dad & Uncle and I also wanted to build a great company but definitely did not want to have to work like them and have a lousy quality of life.

As I grew in age and understanding I realised that our family business was not an isolated example but reflected the norm. Entrepreneurs slogged away until they could not work anymore and they would place the heavy load on their successors who were normally their children. Then the cycle repeats itself.

That is why it is said that the first generation builds the second generation maintains and the third generation normally winds it up. Studies indicate that the average life of most business organisations is about 35 years. By the second and third generation the problems and complexities have grown and the fire in the belly has cooled off, the owners often throw in the towel and seek greener pastures where they do not have to work so very hard. Most organisations simply wither away and eventually die.

I started to investigate how great companies managed and grew. How were organisations like Sandvik structured and how did they operate?
By the time I had completed my engineering studies I had a decent idea of how this could be done.

Of the various organisations I studied one organisation stood out rather prominently. I learnt about a company that sold hamburgers called McDonalds which had operations in 78 countries and opening a new outlet every 8 hours somewhere or the other in the world. (Today McDonalds operates in nearly 120 countries and serves 60 million customers daily.)

I had already experienced the McDonalds phenomenon. The company sold identical products in looks and taste with uncanny consistency as was the service, all at a reasonable price. It was and is still considered good value for money. The products and services are highly predictable. The fast speed of service and the hygiene standards could be relied upon. One of the key factors for the company’s success was its design and effective use of Standard operating Procedures (SOP's) for all aspects of their work.

I don't care much about the taste of McDonalds offerings, but that is not the point. A customer may or may not enjoy the experience, however there is a certainty about everything.
Most people especially those that are pressed for time, demand that things and situations be organised and be predictable. McDonalds provided that. It catered to the meal requirements of people on the go in an extremely quick, efficient and cost effective manner enriching McDonalds shareholders and offering jobs to many people.
The customer perceived that they got a good value meal experience for their money.

Then I learnt that most successful companies many of them Japanese also used SOPs extensively.
Standard operating procedures is the boring but essential magic that allows people and organisations to function reliably, consistently and predictably.

How do SOP's help?
  • They permit routine things to be handled in a routine manner.
  • It sets a benchmark of how and what must be done and by whom and how.
  • SOP's help absorb new team members quickly and gets them up and productive in very short time periods.
  • SOP's permit duplicating operations at other locations without sacrificing quality or effectiveness.
  • SOP's make for mistake proofing operations (however there is no solution for idiot proofing)
  • SOP’s permit effective resource allocation and optimisation
  • SOP’s facilitate continuous improvement.
Now you may ask there has to be some problems with adopting and using standard operating procedures.
Sure there are many problems. Every practice or system has its own problems;
  • SOP's need to be well documented.
  • SOP's have to be deployed properly.
  • SOP's have to be audited at regular frequency.
  • An SOP is a living document and has to be updated continuously.
  • Design and use of SOP's should be simple and serve as effective guidelines. Undue complexity will result in the organisation getting stuck in a bureaucratic quagmire.

    We learnt that if you successfully develop, install and upgrade Standard operating procedures within the organisation then your chances to make life easier for your colleagues and yourself will be greatly enhanced, not to mention that you should be able to managing growth relatively easily.
We were in the age old metal forming business. For an organisation steeped in relative primitive management practices, to talk of Standard operating procedures was akin to the story of the emperor in new clothes. There were jokes galore, as we tried to freeze and define technical and managerial processes, and to implement systems and procedures in all our activities.

The Indian mind is fertile and over imaginative, and if you couple this with the scant respect we have for rules and systems and we have varying degrees of chaos. Therefore it is not hard to see why it is doubly more difficult to implement SOP’s in India .

Somehow, as the recently held commonwealth games held in Delhi demonstrated, in this great land of miracles, eventually things fall into place at the end of the day.
The results are not always consistent or up to world class standards or what we really wanted, but they happen or get done. This was acceptable in an earlier era, but not now.
Failure to produce less than world class performance consistently in today’s world and competition can make organisations toxic and owners ill or worse, make them bankrupt.

We shrugged off the doubts of the cynics and worked that much harder .
Eventually our persistence and commitment prevailed. We finally had a well conceived management system in which everyone believed in. SOP’s became the language of the organisation and allowed most activities and processes to be stabile, efficient and effective with a minimum of hassles.
For example, On Time Delivery performance went from an average of 46% to 98%. Another example is that despite of setting aggressive targets most team members met or exceeded their goals. This was possible because people followed Standard operating procedures or in other DAT – “Do As Told”.

Eventually we were able to establish a world class system which led to a fantastic and meteoric rise of our organisation. Humans love their freedom but they also seek purpose and stability in their existence. A well managed organisation with continuously improving SOP’s provides both a degree of freedom to improve and yet keep the organisation on course. This is one of the reasons that companies like Toyota, Honda etc march on and on and on.

A question will arise in your mind; The world is moving to thinking and acting out of the box and here I am proposing more rigidity and form rather than greater flexibility. Many organisations all over the world have no box, they already exist in varying states of chaos.

As the organisations grow, the organisations without systems and SOP’s tend to become unmanageable, because complexity also grows without corresponding increase in superior management. SOP’s permit great growth without accompanying growth in complexity and management problems.

Only stable organisations can make sustainable quantum leaps of faith and innovation. Most unstable organisations will throw up brilliant ideas and products only to have their ideas and energies lost by dissipation in the chaos in which these unstable organisations exist.
Standard operating procedures are not only required but are essential for any organisation which seeks to grow, and growth is essential for the survival of any organisation.

Comments

  1. Shekhar Naik said;

    Excellent - as always; however methinks SOP or processes - ISO, CMM et al to a greater or lesser degree stifle creativity and innovation; discourage enthusiasm, make work monotonous and a pain in the ...;

    Your output is best when you enjoy work and it doesnt really seem to be "work".

    I think one reason for this is that people "up" in organizations really and truly believe that they know everything and the "lesser" mortals really know nothing - and this doesnt happen only in "desi" or small or mid size organizations but in large and "hugely successful" organizations.

    Interestingly at a recent conclave I met someone from a company I worked for once and inevitably started sharing stuff; in the course of the conversation he mentioned how when he was attending a training program the CEO started his session saying " Ok as the chairman I am here to answer all questions you have about the company - but remember I dont suffer fools easily".

    You can imagine the response - but that also probably at least to an extent provides the answer to the question of why this company which was once the darling of investors and had one of the highest market caps is now floundering.

    Also recommend you read The Living Company by Arie de Gus; its very enlightening.

    Cheers
    Shekhar
    shekharn@gmail.com

    ReplyDelete
  2. George Khanduja said;
    Brother

    I always enjoyed reading your blogs keep it up
    I am sure it is helping lots of friends understand there problems and learning something out of your articles


    Regards
    Gurmeet Khanduja

    ReplyDelete
  3. Manish Kasar said;

    Dear Gurvinderji,

    Very valuable reading indeed. Although we know these things "back of the mind", it really helps when it is put forth so powerfully as you have done time and again.

    I really enjoy reading and learning from your blog, although you must excuse me for not communicating it often.

    Happy Diwali from all of us to all of you. I hope the new year brings lots of health, wealth and prosperity to you and your family.

    And yes, please let me know if I can do anything sitting here.

    Regards,

    Manish

    ReplyDelete
  4. Of Men and Supermen..!!!

    That is a wonderful story to share...!!!
    Thank you Gurvinder...!

    ReplyDelete

Post a Comment

Popular Posts