The urge to cut costs

imageRecently, during a dinner with some senior MNC friends, a discussion led to the question of comparing a cost effective model with a growth model. Normally, I do not write about these management questions. Most people do not have any interest in them, whatsoever, and I myself find them very boring. However, in this case, I thought it incumbent to record my learnings, as it may help someone in the future.

Right at the outset, let me declare that I find it amazing that some big management gurus tilt towards cost effectiveness, while in my opinion, cost cutting is only an occasional tool to boost efficiencies (for minimal periods) and can never create sustainability, as compared to a business growth model, which leads to longer term sustenance.

The answer in sums is so simple. Fixed cost will be, say 10% of the total revenues of the company. A substantial saving in these will lead to an overall increase in bottom line by approximately 1% of revenue. A similar growth rate in the overall business revenue, will lead to a 10 % growth in the topline. This will lead to a very significant pass through to the bottom line. That is the essential difference. In one case you are expanding the whole pie, while in the other its just one small slice being improved, while the pie does not expand, infact sometimes contracts.

Nowadays it seems to be a habit though. Most MNCs seem to be restructuring all the time. This is really a code word to control costs and become more efficient. A continuous cost drive takes the edge off creativity and makes people risk averse. Employees are incessantly worried about their jobs, so very little space is left to actually worry about performance. There are other side issues. Uncertainty, while cost is saved, leads to tension and insecurity. This inevitably leads to politics and a lot of in-fighting. The employees forget the purpose of working for the betterment of the company. Very soon, even when the cost has been saved, the company has lost enough sales, so that we are back to square one. The same bottomline! So then this process is applied again and more costs are drawn out of the system, with the same circular reference effect on the sales. The company is actually chasing its tail and we have seen some large companies dwindle into nothing over time.

Gunning for growth is always a positive message. It means more sales, more people working, less per capita costs, greater buoyancy, more people progressing in their careers and general all round happiness. Of course it comes with more risks, as growth is not a given and many times one has to create this growth, sometimes with innovation and change, other times with out of the box thinking.

Fortunately, in almost all my career, I have been in growth situations and only a couple of times has one encountered a cost saving situation. I make no bones about it…once the job was done, my dislike for the organisation led me to leave it at the first available opportunity, as part of a general exodus of many good people. Infact, generally the best performing people find optimistic spaces and are much happier moving from these sort of adverse cost saving situations.

The need to cut costs will surface at times, especially when a business is in trouble, and to save the company and a larger part of the work force, some sacrifices have to be made. In this case cutting cost makes sense for survival sake. But not the way its practised today, for the sake of enhancing bottomline and rewarding shareholders at the cost of employees lives and families. That is a most inhuman form of management. At the same time one is not advocating rampant cost increases here. Its good to be cost conscious and not throw away efficiency. However, that is a mind-set and not the main purpose of the business, which is to sell profitably, make bottom-line, have an engaged work force and happy shareholders. A balanced path!

The picture is from the free picture site dreamstime.com

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Humans are winning the battle to express themselves

image In day to day life, one notices this attritional struggle going on between the inner reality of an individual and the filtered public person. Its there in most of us, who are daily in search of our sustenance. We touch on it jokingly in public, but in private so many of us have this regular conversation. How to express ourselves, in what we see is the harsh reality of this world?

Initially, we come into this world with only our DNA and endless possibilities. Then through our eyes, ears and cause and effect our world starts manipulating us. Most of it is the actions of our parents and siblings, but as the years progress this circle expands and continues to create filters. A demonic kindergarten school teacher must have shaped some part of my mind, as I still remember her and the indiscriminate ruler, which always seemed to find its mark. As time passes, we subtly change accordingly. Every once in a while, one of us may encounter a life changing event, which then causes a lot of filters to cascade down or go up. These generally are the tragedies of life, which hit us and force us to rethink.

Now, I am no counsellor or trained coach, but over the last two decades I have spent a lot of time mentoring people. First about career and management and then as my confidence built up, about crisis handling, life, aspirations, vision and values. It is amazing the depth almost all individuals have. I say it with shock, but have come to realise that very rarely is there an ordinary individual. Almost all of us have greatness hidden in us and even those few who are ordinary, are instructive to us, in other ways of life.

So, hidden within each individual is a greater being, just waiting to come out and be themselves. Being themselves comes in different ways. Some want to write and be heard. Its amazing the important and perceptive things people can say about the world. I look at life with my point of view and want to express it. These others want to do the same with a different view, based on their own inner being. Others can perform artistic stuff – sing, dance, act, paint etc. All these are expressions and so important to their inner being, yet mostly they hide it away from the world.

So why are these people not expressing themselves? What stops them? Some of it is our lifelong filters. Maybe its a teacher long ago, telling the kid off about a free expression in an essay. Reminds me of John Lennon’s famous quote

“When I was 5 years old, my mother always told me that happiness was the key to life. When I went to school, they asked me what I wanted to be when I grew up. I wrote down ‘happy’. They told me I didn’t understand the assignment, and I told them they didn’t understand life.”

Later on when you get to adult stage, it is a feeling, that people at work or the employer will frown at such an expression. Freedom is considered dangerous. Also do not fall into the trap, that this is a developing country problem. Our MNC corporates regulate personality rigidly. For all my 22 years in MNCs, I always struggled against this approach of corporatising people and blending them into one culture (most colleagues felt the same). These huge transnationals have actually got Corporate slavery down to an art form and they present it so that it sounds palatable and normal. But it is not. It is just slavery, using pleasant tools and most people are trapped lifelong.

Why do these people – just ordinary individuals like you and me – not rebel against this travesty? You can see some of the answers in the reaction to when Rahman Malik was kicked off the plane. Almost all TV anchors were against it, the politicians were against it and even the so called elites on FB were warning of approaching anarchy. And when Arjumand was fired from Gerry’s, then a lot of the reaction was, ‘see we told you so’. People are simply afraid. They are at a stage in life, when they need to earn sustenance, as they have mouths to feed. Society at large exploits this and makes slaves of them – conformity is so much easier to manage. Makes life simpler for the controllers of the world and organisations. So whether its a MNC, or a private company or a government department, people stay under the radar and conform. Some of us go back and have a more creative other life at home. However most, like me, do not even do that and learn 30 years later, that time has passed us by and we have quietly lived a life of slavery.

Fortunately, things are changing and there is more light at the end of the tunnel. The flow of information has been liberated today, thanks to the Internet. This has already had a profound effect and over the next few decades, the poor ordinary human will have the ability to fulfil their inner desires. It will de regulate society and many of my very conformist friends might even suffer because of that, but overall this world will be a better place, InshAllah, because of the change which is coming.

*pictures are from dreamstime.com, a free picture site.

My very own Engro Foods

imageI feel humbled. I don’t think I can put it better. Fifteen months after totally unexpected events, I write about thoughts, which I wanted to express all along. To explain further one has to tell a bit of history.

Engro Foods started out as a personal dive into Pakistaniat – being a Pakistani myself. For years either abroad or working with MNCs, I had lost that connection…not in the heart, but in the daily rigour of existence. But I wanted it back so badly. This cannot be explained better than by an expatriate, who has been working away from home and has suffered from homesick blues. EFL was a gift which finally arrived in 2006. It changed my life and alongwith a bunch of disparate individuals, we carved out a vision, built a team and created corporate history. Along the way, we won two of the biggest world class level awards, which no other Pakistani corporate has ever done. Not one persons effort, but a team to die for.

Then in 2011, as it is my wont to do, I felt my time was up. The company set, the goals achieved, the awards taken, it was time to move onto new things. A dive into my own world of self actualisation. Frontiers in education to be conquered and my payback to this land of mine. Twenty months of education projects, mentoring so many young people, and blogging about thoughts which I could never express before. My time my own, for the first time in 28 years. However, it was arrogant to think that I control my destiny. I don’t! Allah does. So eventually a return to a commercial calling due to unforeseen events.

It was strange to say the least. What I had done and gained expertise in during my whole life seemed difficult. My apprehension was alive. Do I really have it in me? Can I take this particular stress? Does my mind work anywhere near what it used to. Will I have the drive? I genuinely thought..I was not up to it. But the need was imperative and really I had no choice but to return to a room I had left with some relief a while back.

Enter the office, I felt like I was going to school on my very first morning, or my commencement day when I entered the Unilever offices 30 years ago as a Management Trainee. Days bygone and old apprehensions! But it was strange at this age and time of life, when life’s experiences have given one confidence. How will I be received by old colleagues or the new ones? What will I say to them? How do I justify this U turn? Will the old trust be there? Will the old hand in glove fit be there?

I need not have worried. The capacity of humanity to surprise one is a constant in life. The smiles, the connections and in cases the hugs were all there. These were people after my own heart. They were warm and wanted to show that warmth and affection. I had been humbled. Right from the tea boys, to the drivers, to the secretaries, the younger managers, the older ones and then my senior colleagues (more controlled). This was still home, maybe altered and different in form, but the substance still remained. I still belonged here. And by showing what my colleagues did show, they once more sucked me back into that emotional churn, which was EFL. It compels me today, to write about it. To acknowledge it.

So to the taking up of this challenge. This was a place which was built to be a home, for togetherness and not just about individuals, but an institution. In the decades ahead, Inshallah, EFL teams shall go out and together sustain that very belonging and shall build a dream on top of it.

To be or not to be, an Introspection

To be or not to be, an Introspection

In recent months whenever I have gone to society gatherings, I have received two sorts of reactions. There are those who meet warmly and perhaps more so than normal. Then there are those who are more withdrawn, maybe embarrassed to be in the same space. That is fine, as it is the destiny of life to divide all things into pros and antis. The warm handshakes denote respect and in some cases envy. The withdrawn ones indicate perplexity and contempt at the voluntary abdication of an influential position.

My decision to walk away from corporate life a few months ago, from what people would consider a peak of career in the early 50′s, has been examined and conclusions are drawn according to the inclination of each individual. It is not as clear to people, like another friend’s very recent departure into politics. That is dealing in blacks and whites as he is going to correct the wrongs of Pakistan, Inshallah; much more cut and dried and with a clear goal in mind.   My decision has tones of grey in it and therefore is less palatable. Is this the musings of a wandering minstrel?

Well, as a first benefit of my decision, take this fact, that I would never be able to write in Borderline Green so openly, if I was CEO of a large corporate. The value of that freedom alone is something which I have not tasted these past 28 years and makes life worth living again. At least I am not a hostage to fortune anymore.

My career went through its chronological mental stages, best described as:-

– “need to do this because everyone does it”

– a feeling of importance and finding one’s own feet

– interesting work, I am mentally engaged

– “I need to do this for my family”

– “oh I am a CEO” (very short satisfaction period!)

– then “what a burden of responsibility this is”

– to “why am I doing this?”

– “my work is done; others will do the job now and I will live a better life Inshallah”

– Lastly, relief at a job finished and freedom

The problem was the feeling of “I am in this for myself only“. I think it was prevalent in the background throughout this 28 year period. It was a battle within, fought continuously and never overcome. For all one can imagine a larger purpose to one’s career, the reality is that you are doing it for yourself and not for society, country or other altruistic reasons. Unfortunately, there exists a very human tendency to fool oneself into thinking that it is worthwhile, because “I am doing it for others”.

Not for long though. Eventually the dreaded question comes back in the silent beat of the night. Why? Why this soul-killing regime of travel, meetings, hours of useless discussions, putting on a mask, and acting a role. And if you happen to work for an MNC, it becomes worse. At best I found MNC, as real phooey work. The most senior of CEOs operate within a strict band of authority. It is like that dog who uselessly runs besides a speeding car, barking at it. All bark no substance.

You are actually serving a master called the international stock exchange and you will never humanize that in a millennium. Profit and share price are the only operating goals, though you might think it is CSR or building capability or globalization etc. You are fooling yourself and others. What you are now applying is another bugbear, which is ever present at various stages of a career. Our ability to provide “spin”, to this lifelong exercise. Many do it expertly, others reluctantly and some are never good at it. But the truth is that your career prospects improve, if you have learned to apply “spin” to your corporate presence.

So good citizens who are reading this diatribe, sometime in the night over your career you will hear a call, and that voice will ask in ever more urgent terms: “why?”

You can choose to fool yourself, stay addicted to social edict or you can start the intense self examination on whether you should open the door and walk out to something more fulfilling. If you choose not to do anything, then it is no different to 99% other humans. Fine! But know that when you are 80 and look back, there is almost certain to be massive regrets at not taking action. A life uselessly spent in the search of the legal tender and position in society.

If you do decide to do something, don’t kid yourself by putting bandages on your wounds. That is time and money spent on a fool’s errand. Better to do it wholeheartedly. It could be that the eventual result is failure. That is always a possibility. However, if you succeed, then also understand that there is no better feeling one can have in this life. To really live for the larger good is the true purpose of existence, as shown by Prophets, religions and great reformers.

I know there are many of you out there, as you speak to me regularly. Open the gate and go out. Inshallah you will be in an adventure and will not regret it. Just reclaim ownership of your life.

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