You don't have to twiddle your thumbs!

Kavil Ramachandran

THE lengthening shadow of recession is adding to the gloom in the air while companies are competing to cut jobs for managing competitiveness.

Employees are steadily losing confidence in the abilities of organisations to offer them suitable jobs continuously. This makes the organisation-employee relationship much more brittle. How can we avoid it? Don't villagers prepare and sharpen their tools during rainy days for the brighter days ahead? What can corporates do under similar conditions, particularly those in the IT sector?

Let us recognise that the post-recession days are going to be tougher with slower growing demand and crowding suppliers. That also means that the level of efficiency required to be successful will be much greater. Companies, particularly in the IT sector, do not realise that there are a number of weak spots in their organisations which are camouflaged by the terrific rates of growth they have achieved in their turnover and profits.

It may not be possible to sustain this level of growth and profitability after the recession. Also, unless they eliminate such weaknesses they may not be able to even survive in a more intensely fought for market.

Just take the chance

Why not take recessionary days as an opportunity for introspection and elimination of weaknesses? Organisations such as Infosys, which are using the ``bench'' to learn, will be better prepared to compete in the emerging market, which is going to be slower-growing, and more crowded. Everyone should use the slack days for building new capabilities.

One cost-effective way of achieving this is to initiate discussion on the possible business scenarios faced by the company and its divisions. They should organise workshops where they have to also review the overall strategy of the organisation and come out with alternative routes for rapid growth, depending on the scenario that gets built up. During the days of rapid growth that they enjoyed, many such companies did not have the time or the inclination to think of their strategy and internal capabilities. Now is the time for them to take stock of their organisation in greater detail.

The meteoric growth phase that they had also meant that the systems and processes required when the organisation expanded were not created then since things were happening and hardly anybody had the inclination to design appropriate systems of information and control.

For instance, recently, a CMM level 4 company took three weeks to confirm that they had indeed couriered an important document to a client. This does happen when an organisation grows too rapidly. A number of companies now realise the need to develop systems and processes so that they can use their knowledge again and have reusable components for cost and time-related reasons. Such tools may be related to internal as well as external customers. Also, if appropriate systems and processes are not introduced in a growing organisation, there are possibilities of chaotic action at different points in time, with the whole organisation crumbling sooner.

It is only now that some of the industry leaders of the new economy are waking up to these realities.

Trading old skills for new

The emerging scenario may demand new skill sets too. This could range from technical skills to communication, marketing and interpersonal skills. Many organisations, particularly in the IT sector, do not have people with the required degree of such skills. They have been successful with abundance of technical skills so far but with scarcely anything on other fronts.

In the emerging scenario, customer power is likely to be much greater and unless companies have managers who also have strategic and leadership qualities with communication, marketing and interpersonal skills, they will find the going tough.

These are also the days to build new capabilities in entrepreneurship, which will equip organisations to innovate and respond to environmental turbulence better. Some of the IT companies already have started cultivating entrepreneurship, but the danger of it being axed during recession is very high. Organisations should think these are the only days when they can experiment and incubate their ideas without much routine-work pressure.

Win employee loyalty

This kind of an initiative may have other benefits. For instance, in the knowledge-intensive industries, the loyalty of employees is increasingly shifting from an organisation to their profession. While this process cannot be reversed easily, organisations that take care of their employees when the chips are down can ensure that team involvement and organisation loyalty can grow there much better.

Can companies afford such initiatives during times of recession? Yes, indeed! They should realise that affordability is relative. The basic principle should be the willingness and sincerity to try to do whatever is possible and relevant. Considering the huge bottomline IT companies have generated in the past, it should not be too difficult for them to devote part of it for such internal capability-developing activities. For the others also, it may not be an impossible task.

Also, many of these activities can be planned and executed with internal faculty resources. We should recognise that retrenchment is a sign of weakness on the part of an organisation and its lack of ability to manage risk. Organisations which claim to be entrepreneurial should be the ones to stop such mass retrenchment, which are anti-entrepreneurial. For them, these days of recession should be an opportunity to strengthen their organisation.

The author is a Professor of entrepreneurship and strategy at the Indian School of Business, Hyderabad.