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Indian Mid- sized Organizations Survey Results�RCG Consulting - 2021

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RCG Consulting

Office: A 4/6 DLF Phase 1

Gurgaon 122002

Haryana, India

Mobile : 9810366980

rcg@rcgconsulting.in

RCG Consulting

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Some features of Indian mid-sized organisations

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Family-owned businesses account for almost two-thirds of India's GDP and half the workforce.

13% of Indians are engaged at work
Indicates the potential for massive improvement.

Out of family-run organisations

95% of businesses are managed by family members
First-generation entrepreneurs manage approximately 60% of organisations

The level of competition in business varied from medium to very high

Most (80%) organisations were seriously affected by the global environment and global competition.

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Findings of the Survey

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Objective 1: Critical requirements of medium-sized organisations in India in the current business scenario

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Global Competition
Significant Technological changes and its impact
Increasing Business Complexities
Criticality of Team Dynamics
Impact of Costs
The growing need to Invest in CRM, IT and team development

Companies now take a more thoughtful and strategic approach to management systems and processes instead of jumping on the latest fad. More Business owners and executives acknowledge the requirement of a disciplined approach for revenue growth.

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Objective 2: Gaps in critical management practices

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Organisational Crisis during growth
High Impact of size and volume of Business
Business journey Stage 1: From Aspirations to Strategy

Long term Directions - High impact on culture, Wide gap

Strategy Formulation - Weak formulation & Low Implementation

Business journey Stage 2: From Strategy to Action (Operational) Planning

Weak Planning
Incomplete implementation

Business journey Stage 3: From Action (Operational) Planning to Execution

Incomplete Planning
Poor implementation

Inadequate tracking the progress to results
High Implementation gap

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Long Term Directions

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Usually,

Long term Planning not considered Necessary

Focus on Turnover & PBT

LONG TERM DIRECTIONS DEFINED BUT NOT PRACTICED

CO >200 CR SIZE – 50% DEFINED VISION, MISSION & VALUES – BUT NOT PRACTICED

LONG TERM PLANNING

PLAN IMPLEMENTATION

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Medium Term Planning/ Strategy

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Strategy Formulation

10% Formulated

25% Claimed - Strategy in mind

How to Compete

Not Formally addressed

Most companies - Turnover and Profit Plan was considered as strategy

Planning limited to Sales

Missing :Other functions and company as whole

Missing: Enablers & Resources

FORMULATION

MEET COMPETITION

10%

25%

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Short-term or Operational Planning

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42%c

70%

25%

Defined Path to achieve Target

Defined Resources and skills required

10%

>1000 cr

100-500cr

<100 cr

75%

50%

30%

5%

MADE ANNUAL PLAN

70% - Only Financial Plan

10% also defined Roadblocks

Formal Documented Annual Plan

1000 cr +- 75%

500- 1000 cr - 50%

100cr + - 30%

Below 100 cr - 5%

ANNUAL PLAN

DOCUMENTED

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Execution

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20%

Implemented how to measure performance object

40%

Planned but did not implement

10%

Made their Plan to handle change management

10%

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From action Planning to execution

Only 20% of companies have implemented how to measure performance objectively.

However, 40% of companies had planned but did not implement it.
Generally, it was found that poorly managed organizations fail to track performance since they have no effective targets and bases promotions on tenure with no system to address persistent employee underperformance. In contrast, a well-managed organization continuously monitors and tries to improve its processes, sets comprehensive and stretching targets, and promotes high-performing employees and fixes (by training or exit) underperforming employees.

Only 10% of companies have made their plan to handle change management.
About 60% of companies measured only financial KPI without working non-financial targets, enablers, etc.
Only 50% of companies had transparently shared the performance parameters with their key team members.

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Poorly managed organizations fails to track performance

No effective targets
Promotions on tenure
No system to address persistent underperformance

60%

Measured only financial KPI without working non-financial targets, enablers, etc

50%

Transparently shared the performance parameters with their key team members

Continuously monitors and tries to improve its processes
Sets comprehensive and stretching targets
Promotes high-performing employees a

In contrast, a well-managed organization

……….. Execution

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From execution to results

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10%

5%

45%

Variance Analysis

To follow the performance

Root Cause Analysis

To ascertain the real reason to act

Correction Plan

Chosen the options for correction

Follow Through

To ensure implementation

30%

Only 50 % of companies made systems to track the overall company performance.

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High Implementation gaps. Wide gap in first impression & what transpired

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50%

20%

30%

Reasons for weak Implementation

Lack of professionally qualified members
Little exposure of the leaders
Ignorance to the changing needs

Critical components missed e.g.

Targets set without roadmap
Performance variance identified without Root Cause. & Correction Plan

Weak implementation from top

Missing discipline and consistency
Slow learning and implementation

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Implementation gaps were very high. Many leaders gave the first impression that they have proper systems and procedures in place. But during detailed discussions, it was found that

Critical components of the methods and techniques were missed, and desired results were not achieved. For example,

While making an operational plan, targets were set, but a roadmap to achieve the same was not planned. Hence the targets remained wishful.
Performance variance was identified, but the root cause was not identified, and a correction plan was not made. Hence the process did not yield the desired results.

Implementation was weak from the top (leaders). Discipline and consistency were missing. Teams were taking time to learn and practice. Discipline, consistency and presenting themselves as a role model from the top leaders were the challenges.
The reasons for the weak implementation were identified as

Lack of professionally qualified members in the team
Little exposure of the leaders to the system and its implementation
Ignorance to the changing needs of the organization

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Objective 3: Reasons for the gaps in required management practices

Timely awareness to the changes required
Confusion about various management systems, its complexities and its practical implementation
Practical training about the use of the management system
Lack of consistency im implementation
Availability of time to move to new systems and difficult to change old habits
Team members accountability problem
Slow speed of learning
Poor coaching and mentoring skills of the leaders
Root cause analysis of the performance gaps and taking corrective actions
Self-management of leaders and managers in terms of Task Management (actions decided without implementation), prioritising their task, etc.
Development of loyal staff members in line with the changing environment. The leaders were struck in balancing loyalty and performance.

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Business Owner’s perspective

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60%

50%

40%

30%

Team members accountability
Slow speed of learning by the successors in the family
Unclear Root cause and corrective actions
Weak Self-management of leaders and managers
Poor development of loyal staff members

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Reasons: for team slow Learning�

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The classroom training (within and outside the organization like seminars) has little effect in changing the team members' behaviours
Poor coaching and mentoring skills of the leaders

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Objective 4: The solution to cover the gaps and move for rapid growth for medium-sized organisations in India

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Vast potential of Indian Mid-sized businesses that is highly underutilised. A significant improvement can be made in their performance with improvement in management systems and practices.
Most Business owners and executives acknowledge the requirement of a disciplined approach for revenue and profitability growth.
Proper management systems and practices are critical to meet the requirement of the business.
Different management systems and practices have different strengths and weaknesses—the usefulness of the systems changes over time.

To succeed, companies need to understand the full effects of each system and then combine the right ones in the right ways at the correct times.

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UNDERLYING REASONS FOR PRESENT SITUATION�

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Global Competition
Technology
Business complexity, Environmental shocks - uncertainties and volatilities
Team dynamics – critical

Management System Framework to facilitate

See

Walk
Align

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The management challenge has changed in the last two decades, especially in developing countries, due to various factors viz.
The competition has become global. As a result, customers have multiple options to source products and services across the globe.
Technology has made a significant impact on the business in the supply of products and services. Far markets are now accessible with a touch of a button.
The business has become far more complex. Frequently companies get environmental shocks due to changes in various parts of the globe or technological changes, etc. hence the uncertainties and volatilities have gone up.
Team dynamics have become critical. Efficient production, supply, delivery, service is possible only if teams are highly efficient. The efficiency of a group depends upon their engagement, skills levels.
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Survey Conclusions�

The potential of Indian Mid-sized businesses is highly underutilized

A significant improvement can be made with improvement in management practices.

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