Managing Change
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This document discusses the need for companies to balance operational improvements with innovation and growth. It argues that companies cannot achieve radical performance gains through efficiency improvements alone; they must also create new opportunities. The document outlines strategies for improving resource productivity such as portfolio optimization and increasing labor and capital productivity. It also discusses strategies for growth like developing new products/markets and building capabilities. Additionally, it addresses why people resist change and provides lessons on managing the tensions between operational improvements and strategic revitalization.
Managing Change
- 1. Managing Radical Change CREATE BRAND MARKET www.creatingdemand.org Copyright 2013-2014 Presentation by: Sachin Bansal What Indian companies must do to become World Class
- 2. Sustained superior corporate performance is based on the ability to manage tension between two symbiotic forces : 1. the need for on going in improvement operational performance and productivity through constant rationalization in existing activities, and 2. the need for growth and expansion through continuous revitalization of strategy ,organization and people No company can achieve radical performance improvement without transforming resource productivity no company can achieve such results only through improvement in in operating efficiencies Lessons from case studies of companies www.creatingdemand.org Case studies of companies Lessons Copyright 2013-2014 Presentation by: Sachin Bansal
- 3. The sweet and sour cycle : Radical performance improvement by improving resource productivity (sour) and Creating and exploiting new opportunities (sweet) Improving resource productivity (sour): 1. Portfolio choice( eliminating low return activities) 2. Improving labor productivity ( revenues and profits per employee) 3. Improving operating efficiency ( speed reducing waste) 4. Improving capital productivity (return on capital employed) Cooking sweet & sour www.creatingdemand.org Copyright 2013-2014 Presentation by: Sachin Bansal Cooking sweet & sour Radical performance
- 4. Creating and exploiting new opportunities (sweet) : 1. Growth opportunities (new products and markets; expanding share) 2. Building competencies( new capabilities and resources) 3 Organizational capabilities ( revitalizing organization and people) Cooking sweet www.creatingdemand.org Cooking sweet Creating and exploiting new opportunities Copyright 2013-2014 Presentation by: Sachin Bansal
- 5. The downward spiral of Rationalization • Spiral is to be set right by solving underlying problems Poor Performance Cut Resources; sell businesses, close factories, sack people Temporary Improvement in results Underlying problems not solved Performance declines again Cut Again www.creatingdemand.org Copyright 2013-2014 Presentation by: Sachin Bansal The downward spiral of Rationalization
- 6. Vicious Spiral of Unprofitable Growth • ROIC and WACC ? Growth Unprofitably ROIC < WACC Increased Debt to generate cash(D/E ) Decreased Financial degrees of freedom ( less funds,more expensive rates) Decreased ability to support growth Lack of cash, loss of strategic freedom Decreased attractiveness to investors Lower share prices, higher D/E, higher WACC www.creatingdemand.org Copyright 2013-2014 Presentation by: Sachin Bansal Vicious Spiral of Unprofitable Growth
- 7. Virtual Spiral of Profitable Growth • Spiral of betterment Grow Profitably ROIC> WACC Increased attractiveness to investors higher share prices,lesser D/E, Lesser WACC Increased financial degrees of freedom (Lower cost of capital Increased ability to support growth Investment potential, strategic freedom Generate internal cash for growth, Lower D/E www.creatingdemand.org Copyright 2013-2014 Presentation by: Sachin Bansal Virtual Spiral of Profitable Growth
- 8. Why people resist change? Would life be easier or more comfortable if the pace of the change is slower? Is a new way of doing things necessarily better way ? Should we change simply for sake of change? Does it take courage to change? To resist change? Should we try to predict change - or simply react to it when it happens? Is it useless to try keep with the tremendous technological changes of today? Are such technological Changes hopelessly in conflict with an individual’s desire for peace- of- mind and a frantic way of life ? Attitude towards Change www.creatingdemand.org Attitude towards Change Why people resist Copyright 2013-2014 Presentation by: Sachin Bansal
- 9. Change is the only constant. We can not ignore it. review and re-evaluate our priorities on a regular basis. Why to Change or Reform ourselves and our Organization? www.creatingdemand.org Change or Reform Ourselves and our organization Copyright 2013-2014 Presentation by: Sachin Bansal
- 10. Reputation to overall gains www.creatingdemand.org Copyright 2013-2014 Presentation by: Sachin Bansal Strategically connected with clients, engaging and involving them: •How to get closer to customers? •To build brand awareness and enhance loyalty? •To position new products and services for the effective market penetration? •To fulfill what customers really desire? Specialties Brand Strategy, business entry & planning, product development, internet marketing, trade distribution, public private partnerships, sustainable tourism management and investment promotion. Crafting, Operationalizing and Implementing Growth Strategies to maximize opportunities in emerging geographies; experience as my strong resource and capability Sachin Bansal Enhancing business profitability
- 11. SACHIN BANSAL- Chief Explorer INDIA : +91 97111 90192 sb@creatingdemand.org www.creatingdemand.org facebook.com/creatingdemand DELHI LONDON MELBOURNE NEW YORK ITALY www.creatingdemand.org Enhancing business profitability…. Copyright 2013-2014 Presentation by: Sachin Bansal