The Operations of People

We had an entire day with Prof. Ralf today for Operations. On a given day, you tend to learn a great amount at IMD and almost all our classes are structured around the case study method. It’s amazing how much one can learn about any business discipline by analyzing case studies, brainstorming solutions to real problems and then eventually hearing what the companies ended up doing.

I’m always amazed by the new concepts we learn everyday – for instance, today we learnt about designing supply chain strategies, revising them, contemplating centralized vs. decentralized methodologies, alignment between product types and the supply chain capabilities, etc. However, today was special for me because in both the cases, there was indeed a common element – “The Operations of People”.

In the first case, a large European company faced with competition had to restructure their supply chain operations to stay profitable and had to make key decisions regarding location, sourcing and overall supply chain strategy. In the second case, another large corporation (a leader in the world of toysJ) had to reconsider their newly devised supply chain strategy (suppliers & logistics) due to major problems in the execution.

In both cases, what amazed me the most was the focus on people – In the first case, the company focused on ‘Social responsibility towards employees’ as a key decision maker even though there seemed to be better financially justifiable choices. In the second case, the leadership worked with their suppliers/partners to fix their current problems and together decided to make a difference ….so much so that they not only established record sales growth coming out of the hurdle but also won major accolades for their supply chain strategy.

The learning for me was that when you are in the thick of things surrounded by problems, it’s not always easy to stick to plan but it’s important that we don’t get blinded by temporary hiccups and try to focus on our core strengths and strategy (after all there must have been a sensible reason we started down this path in the first place, right?). The most important learning for me was that business is about people and that human capital and corporate culture are still valued as major performance drivers.

"Shareholder value is a result, not a strategy. Your main constituencies are your employees, your customers and your products." (Jack Welch, FT 2009)