The global economic uncertainty has unleashed a wave of unprecedented challenges for the world’s economic order. Organisations can no longer take the liberty to underutilized their own capabilities. While this is one side of the coin, the other side of the coin, on the contrary, holds a great promise. Organisations today have an entirely new way to compete by maximizing their existing capabilities. The tough challenge here is to identify, synergize and leverage dispersed capabilities within the organisation; and the ability to do so may be the key source of competitive advantage in the current times. Profitability for organisations is a given. Organisations that are not competitive as measured by profit, in the absence of the sustained monopolistic position, may fail. Profitability may continue to be a business issue in the future, but the accepted path to profitability is likely to change. Increasingly, profitability may come from some combination of increased revenue and decreased cost. Thus organisations are expected to simultaneously formulate and pursue their revenue and cost strategies. With the organisations entering new age of economic uncertainties, competing by capability maximization may become the new name of the game. Such organisational capabilities are created using combination of limited resources dispersed within the organisation. Optimized organisations ensure that the resources are leveraged to their best potential to create the unique capabilities. Ideal state optimization results with the concurrent maximization of resource efficiency, effectiveness and utilization. Recent changes in the global business landscape have triggered the organisations to pursue optimization. Some of the key triggers in this regard are globalization, pace of change, profitability through cost and growth, focus on capabilities, complex regulatory environment, mergers and acquisitions, rapid technological evolution and high customer expectations. These changes are expected to set the direction and pace for optimization. Organisations of all sizes and from most industries may consider optimization in near future; however the nature and scale of optimization may differ. Creating and sustaining an optimized organisation may require extraordinary leadership commitment. Key avenues of optimization may be explored and leveraged only with the right leadership intent. Leaders may not be able to sustain the optimization effort without investing to change the fundamental mindset of people. In other words, leaders may need to create the culture of optimization. In many cases, leaders may also need to manage a parallel cultural transformation, with focus on optimization, as they lead efforts to create an optimized organisation. Dimensions of culture, such as knowledge sharing, resource consciousness, collaboration, inspirational challenges, openness to change and team working may need to be strengthened. Furthermore, creating an optimized organisation may require much deviation from the normal ways of working within the organisation. Such deviations may impact the work profile of individuals, teams, functions and organisation at large. In the case of creating a shared services organisation or outsourcing select work activities, significant number of employees may get relocated or even separated. Managing such people issues may hold the key to success of creating an optimized organisation. Thus, in a nutshell, leaders may be expected to create the fundamental traction for change in their pursuit to truly realize the benefits of optimization. Organisations typically create capabilities through utilization of resources at multiple levels. Optimization is about ensuring effective and efficient deployment of existing resources for capability maximization. Some of the key avenues of internal resource optimization include process re-design for efficiency, technology up-gradation, workforce planning, role clarification, goals cascading, skill alignment, cross functional/departmental communication, organisation de-layering and team based governance. Thus, it is imperative that dimensions of organisational framework structure, workforce, processes and technology be aligned to the overall objective of optimization. Culture weaves all the said elements into a uniform thread, hence strengthening the alignment. While it is important to explore individual dimensions of the organisational framework to identify avenues of optimization, it may be observed that the real opportunity for optimization is locked in the way these dimensions interact with each other. Workforce optimization is a key element in creating an overall optimized organisation. Simply stated, it is about getting the right set of employees, at the right time, at the right cost and at the right place. It seems like organisations have to get a lot of things ‘right’ in order to reap the benefits from workforce optimization. This often seems to be the reason why most organisations don’t even attempt it. However in the changing economic scenario, organisations can no longer take the liberty of continuing with the misaligned workforce. Appropriate ‘workforce planning’ and negotiating the right ‘workforce contract’ (part time, temporary, permanent, contract employees) are the two key facets of workforce optimization. Organisations are thus increasingly exploring diverse internal/external partnerships to realize the objective of workforce optimization. Organisations deploy combinations of different delivery models to realize the benefits of optimization. The delivery models define the nature of interactions among the structure, workforce, processes and technology. One of the ways organisations optimize their overall value chain is by strategically outsourcing select work portfolios. Even though strategic outsourcing enables organisations to maximize capabilities and ensures high resource utilization, it also involves a fair degree of risk. In another approach, firms create a separate shared services organisation within the larger organisation. Creating a shared services organisation provides a unique opportunity to leverage both, the economies of scale and the depth of expertise. Many firms choose to bundle the standard transactional work of functions such as finance, human resources, information technology, procurement etc. into a separate service organisation called ‘service centre’. Additionally, many firms also bundle special expertise (required only on need basis) into a separate organisation called ‘centre of expertise’. Both ‘service centre’ and ‘centre of expertise’ may together constitute the shared service organisation. Driven by the pressures of reduced cost and timely service delivery, many firms also deploy self service delivery model, in addition to the above delivery models. Interactive technology and seamless processes integration underpin the effectiveness of the delivery models. Recent changes in the business landscape have triggered the need to create an optimized organisation. Some of the key triggers, in this regard, are ; Globalization: Globalization seems to dominate the competitive horizon. The concept is not new, but the intensity of the challenge to get on with it is. Globalization entails new markets, new products, new mindsets, new competencies, and new ways of thinking about business. In times to come, many organisations may have to evolve new models for attaining global agility, effectiveness and competitiveness. Additionally, organisations may also have to devise means to consolidate their dispersed capabilities to provide unparalleled value to the customers at reasonable cost. Pace of Change: This is perhaps one of the most challenging eras of the business history. The speed of change is unprecedented. Organisations seldom have time to adapt themselves to the rapidly changing business landscape. Ways of working are becoming obsolete with each passing day. Innovation and self-discovery have become new catalysts for growth. Changing employee demographics is posing yet another challenge for organisations. Increasing number of baby boomers in the west and increasing number of millennial in the east is causing unique organizational challenges in the respective countries. Employees and consumers are increasingly becoming aware of the organisation’s responsibilities towards communities and environment. All this, along with changing customer preferences and expectations, is making business even more challenging in current times. Profitability through Cost and Growth: Profitability for organizations is a given. Organisations that are not competitive as measured by profit, in the absence of the sustained monopolistic position, may fail. Profitability may continue to be a business issue in the future, but the accepted path to profitability may likely change. Increasingly profitability may come from some combination of increased revenue and decreased cost. Thus, many organisations are simultaneous working on their revenue and cost strategies. In current times, the focus however seems to be more on cost strategies. Focus on Capabilities: Organisations are increasingly focusing on identifying and strengthening their existing capabilities. Organizational capabilities are the DNA of competitiveness. They are the things the organisation always does better than that of the competition. Organisational capabilities may be hard (such as technology) or soft (such as innovation). Soft capabilities are more difficult to create and replicate. They are often the source of sustainable competitive advantage to the organisations. Complex Regulatory Environment: Organisations are expected to comply with the statutory and regulatory provisions of the countries they operate in. Compliance with the complex and evolving regulatory and legislative requirements is a top-of-mind objective for organisations of all sizes. Changes in the regulatory framework have acted as a catalyst leading the organisations to roll back and work in a constrained environment with little scope to deliver on its strategic objectives. Organisations have to revisit their programs, policies and processes in order to be compliant with the laws of the land. Mergers and Acquisitions: Mergers and acquisitions, divestitures and outsourcing continue to be some of the key drivers in organization’s plan to drive revenue growth, reduce costs and grow profits. Historically, many of these major business changes have not generated the expected business value. The upheaval caused by integrating with another organisation significantly challenges the way both organisations conduct business. Moving ahead in an indecisive environment is demanding, but a business commotion is an excellent time to look at ways to optimize across the organisation. Technology: Rapid evolution and adaption of technology has been the defining feature of the current decade. Technological innovations occur faster than we can keep up. Technology has made our world smaller, closer and faster. In an environment of burgeoning computer literacy, ideas and images spread quickly worldwide. Technology overcomes geographical distances as well as language and cultural differences. Thus the above may likely set the direction and pace for optimization. Organisations of all sizes and from most industries may consider optimization in near future; however the nature and scale of optimization may differ. As mentioned earlier, organisations typically create capabilities through utilization of resources at multiple levels. Resources are deployed within the organisational framework of structure, workforce, processes and technology. Organisations create value for stakeholders through synergic interactions among the above listed dimensions of the framework. Each dimension is aligned to the overall organisation strategy. Augmented organisations attempt to maximize this synergy by ensuring high utilization, efficiency and effectiveness of resources deployed within the framework. Leadership provides the necessary traction for synergy maximization and culture weaves all the said dimensions into a uniform thread, hence strengthening the alignment.
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