Productivity: A Competitive Tool

continued from: The Competitive Edge

Gillette also achieved the tag of the most innovative company in the world because of its approach to offer the customers innovative products. Moreover, it is this openness towards its employees which made Nucor, a major steel producing company of the US, one of the most efficient steel producers in the world for decades. One should encourage suggestions from the bottom line of the workforce. One need not be amused by this idea, for the quality of their suggestions can improve the firm's productivity. Openness can go a long way in improving productivity and the most productive companies have this distinct competitive advantage from their rivals. It has been observed that in many companies when revenues go up, bureaucracy too follows. Bureaucracy in any sense and form is always a bad sign for the firms, as it complicates and paralyzes the organization. Complexity usually crushes the flexibility of the firm and this further becomes a hindrance to change. So, there is no place for bureaucracy in productive companies.

Change is inevitable and that is applicable here also. Productive companies are always willing to change their strategies and tactics according to the changing needs and demands of the customers. For them, continuous improvement and a dedication to becoming more efficient day by day, is a way of life. Jason opines, "Unless a company is constantly creating new offerings to solve a customer's problem, its future will be short-lived." There are companies like Gillette, Dell, 3M, P&G, Disney, Microsoft, Nucor, GE, Infosys, Wipro, Hero Honda, Bajaj and Maruti, to name a few, which have mastered the art of change and innovation. These companies have learnt to be highly productive from their initial days. It is the sheer power to change and the ability to think out-of-the-box that led to the emergence of AirDeccan, which has brought in a new chapter in aviation. AirDeccan is able to provide the lowest fares and still remain viable in this highly price-competitive Indian aviation industry.

It is the power of innovation which helped Rasna to hold approximately 93% market share in the concentrated soft drink segment of the country despite the fact that it has stiff competition from big players like Coca-Cola, Hindustan Lever and Kraft Foods. Further, the innovative attitude not only helped Ujala challenge the market leader, Robin Blue, but also create its own identity in the liquid whitener market. There are companies like Coca-Cola, Nike, Revlon, LIC, etc., which lost their market share because they failed to innovate at the right time or they resisted change. A productive company follows a method of continuous improvement all the time.

A productive company has a "No Lay-off" tag attached to it. For such companies, employees are the most valuable assets and they are treated with dignity. In true sense, productive companies never face the need to lay-off people, because they know better ways of dealing with a crisis than just firing people. According to Jason, "Lay-offs destroy a company's ability to be more productive." A perfect example here is of Nucor. It reduced its production time of producing a ton of steel from 11 hours to 30 minutes. It pays its employees much higher than the average industry standards. The company has never laid-off an employee in its history.

According to Dan DiMico, Nucor's CEO, "When business is bad, as it's bound to be in a highly cyclical industry like ours, the first thing to go is every executive's perk and bonus, followed by every plant manager and supervisors giving up theirs. Only then are the workers affected, we`ll reduce the workweek to five days and then four and on some rare occasions even three, but we never lay-off people." Nucor has been following these guidelines since its inception. Jason further adds, "Lay-offs are a management fad used by untalented CEOs and managing directors." It has been observed that many companies follow their financial statements to judge how profitable they are, instead of focusing on the customers and the day-to-day running of the business. Focusing on these will automatically bring revenues for firms. Running after financial statements will lead companies nowhere.
 

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