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It’s been over a year now since I moved to the role of CEO for Wyde and Eldorado, software product companies focused on Insurance Policy Admin and Healthcare Policy Admin, respectively. The task on hand was to turnaround these business units, a task that’s daunting and exciting in equal measure. While there is still work to be done, these units are well on their way, if not already there, to be among the most profitable units of the Mphasis group.
Here are some of my key takeaways from the time when I moved to the new role to lead these companies:
1. Growth is a great problem solver
Every business needs to grow. However in a turnaround scenario, growth gives you the much required breathing room when you have to make particularly difficult decisions. When you drive growth it becomes the focal point and helps everyone channel their efforts in a singular direction.
Of course, growth is needed to enhance stakeholder value and continued investor confidence. Equally important, it provides the vital space for ‘tougher’ actions like improving on economies of scale, internal business process redesign and operational efficiency.
2. It is not about expense reduction, rather deliberate investment
Every expense item has to be aligned to a correspondingly higher revenue item, directly or indirectly, otherwise it has no reason to exist. The only exception has to be investments in the future of the business. A business undergoing turnaround needs to find that focused investment which will yield results in complete alignment to the defined goals, including growth as well as reduction in “unproductive” expenses.
We brought in experts with strong process expertise in product businesses and they helped refine the process in line with the best practices. This was one of the key aspects of the turnaround process. Several automation and collaboration tools were also brought in which improved productivity and efficiency.
3. Help your team succeed
Every framework you design has to be set for success. Structure it right, delegate core responsibilities, enable ownership and provide air cover for risks and failures. This eliminates hurdles and makes it easy for the team to succeed. A conducive environment that empowers people to take decisions within a framework helps immensely. This includes setting a broad goal within which individual and team KRAs need to be fitted.
This gives razor-sharp focus and clear directions to people and provides them with an effective way to channel their thinking. Over and above, it is important for team results to be tracked. Focused and regular reviews are a must because they help in suggesting immediate remedial actions and reveal if course-corrections are needed.
4. Incentivize the right behavior
It is the primary purpose of the business to serve all its stakeholders, be it investors, customers or employees. It is imperative that all members of the team understand that the business has to be profitable to be able to do just that. Each member of the team should find it easy to link their individual contribution for the common goal of revenue growth and profit maximization
5. Take customers into confidence
Any turnaround process will have some hiccups and a customer who expects a Business as Usual (BaU) situation at all points of time, will raise a red flag. It is important to communicate to the customer the impact of a turnaround program and how it will ultimately benefit them. It’s also crucial that the business goals of customers are taken into consideration. Regular updates with a strong communication protocol through apex committee meetings or steering level meetings will ensure a great amount of visibility and transparency. When this is maintained it helps in building trust among customers
6. Tackle “Naysayers”
Any organization will have its share of skeptics and a cautious operations team. It is important to identify objective people and make sure that their thoughts are heard ahead of any implementation.
The philosophy that I applied here was “question or subscribe”. After the plan was worked out, everybody was free to question and help improve it. In case of no questions, it was assumed that everybody was convinced by the plan and were expected to subscribe to it. This helped on two counts; one, it challenged teams to anticipate hurdles and plan for solutions upfront, thus building parallel alternatives. Two, once the plan was frozen, they were all aligned to one direction or goal. Issues that come out later due to unforeseen circumstances were seen as challenges and the focus was more on solving them rather than complaining about them.
We all know Management is as much an art as it is a science and therefore different business leaders will have different ways of approaching the same problems. The important thing to remember here is that every organization, be it big or small, can follow these or their own version of similar mantras to overcome hurdles in achieving their organizational turnaround.