Improve efficiency by eliminating irrelevant practices

A number of management practices have become ineffective or irrelevant because of the Internet and other technological advancement. There are uncertainties in economic development.

Instead of trying to bring in new management ideas, companies can create simple but effective improvements by identifying the non-valuable practices and eliminating them quickly.

Many popular management practices brought over from the previous century have been challenged and tested for validity and practicality today. What worked in the past may not work any more, as information technology has advanced and changed the working platform.

Some of these practices are still being widely applied by a number of companies and need drastic change before they become outdated, such as the following.

l Budgeting process challenge: It has been evident that one of the most time-consuming activities requiring high resource allocation is the annual budgeting process. Many companies have to spend a lot of time – on average four to five months – on preparing, reviewing, defending and consolidating the company’s annual budget before the final version is approved. Unfortunately, once a company enters the new fiscal year, this budget may become obsolete. It is also not possible to keep changing the assumptions and figures in the budget during the process. Should we stick to the old ways of budget preparation? Is there any area we can shorten or eliminate so that we have a more realistic and on-time budget plan?

l Manual-operation challenge: Even though a paperless working system has been discussed and widely applied, many businesses may find it difficult to implement the practice throughout the organisation, for a few reasons. Studies of successful cases show that to make this change a success requires not only financial investment but also decisive direction from the top management. Back-office concerns are evident in the initiatives to computerise manual operations. It is important for responsible persons to communicate and gain understanding and acceptance before starting the process for changes.

l Top-down centralised management challenge: A lack of proper empowerment can push the company into a critical management situation. As the market needs high responsiveness to both positive and negative business transactions, it is not practical for employees to go through the entire silo-style organisational structure to obtain agreement to do the right things. Delegation of duties should be explored and designed so that companies can keep up with market dynamics.

It is advisable to keep asking ourselves whether the current working processes still work effectively and efficiently. If not, we should make changes. To eliminate non-value-added steps of work requires courage from the leader and also support from his subordinates. Listening to employees involved in the detailed procedure and showing determination for improvement is a key factor to achieve the goal.

Surprisingly, exit interviews have shown that high employee turnover in some companies could be attributed to a tedious and inefficient operational system, especially when getting simple things done becomes a difficult task.

As Thailand is entering the era of the Asean Economic Community at the end of this year, there are a lot of overseas opportunities for business expansion. Are we sufficiently competitive to meet such challenges? It is a good idea for a company to apply proven best practices. However, if such practices are not available, why don’t we start by getting rid of the ineffective practices?

Dr Yanyong Thammatuchareem is head of international finance and operations at Central Marketing Group. He can be reached at [email protected].