Sunday, March 7, 2010

Hey! Why are we stuck!?

The bike in the photo is stuck in quicksand! A quicksand sucks!! And when marketers are in a quagmire one can understand the stuck feeling!

Why are we stuck?! We have the same quality, competitive practices, and product range as our competitors - particularly the new "upstarts" like Mankind and Piramal Healthcare. But Piramal Healthcare is the 4th largest pharma company in Indian pharma (retail) market (growing very fast) and Mankind is the fastest growing pharma company in India! Why are these "upstarts" becoming biggies?! Does it have something to do with the way they work?!

Organizational success depends on people behavior. Eliciting desirable responses of people in line with the organizational goals is the key focus of management personnel. To ensure that this happens managers and management inevitably use the CARROT AND STICK POLICY. In the traditional mindset of organizations, particularly when organizations were operating in a protected (nonliberalized) seller's market, the emphasis has always been on the "stick" rather than on the "carrot" to ensure appropriate employee behavior. In fact, getting a job itself was a carrot for the employee during the preliberalization days. But is it the same thing today? It is a universal lament of all companies from Pfizer to Abbott to hear that they do not get MRs! In such conditions, eliciting appropriate employee behavior is just not possible with sticks! It requires more management acumen than that!!

Today the challenges are different!

After the rolling in of the LPG bandwagon (ie., liberalization, privitazation and globalization) in India, the mindset for employee management has undergone a sea change. No more can the emphasis be on penalty based management - employee management is much more challenging! Ability to attract talent, retain talent, engage talent and align employee behavior in line with organizational needs or goals has become a major science or art of managership!!

The emphasis is on positive reinforcement

Simply put, positive reinforcement is putting the emphasis on rewards for producing the desired behavior. The entire premise of positive reinforcement for modifying organizational behavior is BEHAVIOR IS A FUNCTION OF ITS CONSEQUENCES. If the consequences are happy for an employee, there are greater chances of the employee indulging in that behavior. Hence, managers play with a range of rewards or reinforcers in the environment to produce a desirable behavioral pattern.

Managers use a range of positive reinforcers to enhance productive work behavior. These include:
  1. Approval
  2. Social recognition
  3. Money
  4. Feedback on performance
  5. Independence
  6. Participation
  7. Time-off
  8. Increased responsibility
  9. Praise
It requires manager insight to use the appropriate reinforcer. This can be understood by observing the employee behavior. The employee's verbal reaction to the reinforcer or the result of attitudinal surveys are not dependable. It is direct observation of employee behavior that helps the manager find out which reinforcer is most appropriate to produce a desirable work behavior.

Emphasis on positive reinforcers

Research has proven many times that penal management system gives a satisfaction of doing justice to the manager ie., to the manager's ego, but from business and organizational point of view, it does not create behaviors that help in realizing organizational goals. Behaviors are modified by carefully selecting positive reinforcers, giving the reward only after the behavior modification is done by the employee (advance rewards in anticipation of behavioral change does not work as per researches!), and rewarding the employee for even the smallest but desirable behavioral change, is also very important. Many employers or managements have outcome based positive reinforcers, however, the trend today, based on research, is to have behavior based positive reinforcers. Business outcomes are not based on just one person's activity in today's complex business environment. So positive reinforcers contingent on behavior rather than outcomes gives advantage to companies.

Feedback is an important input that helps in employee's behavior change. Feedback however should not be threatening! Feedback itself can be an important reinforcer.

Identifying new rewards is a creative challenge to managers - the new rewards should not hamper current reward system, as per researchers, but help employee behavior raise itself to higher organizational goals. If current reward systems get affected it leads to extinction of productive work behavior.

Why are organizations stuck or have the WE ARE STUCK FEELING!?!

Change is occurring in today's dynamic world @ speed of thought!! Disruptive forces in the market are many. Competition is cut-throat!! Many organizations in India operate with a preliberalization mindset, which is out of sync with today's business climate. This means: penal management with subservient employees was/is the organizational goal with preliberalization mindset. This is/was OK in a seller's market with protectionism (in the macro environment). But it's just not going to work in today's era.

Today, most markets are buyer's market. Employees are a part of the competitive cutting edge of a company. Hence, producing productive work behavior in employees is a key to market success. This requires more than giving the stick. It requires imaginative, sagacious and careful use of positive reinforcers to ensure employees give desirable work behaviors and prescribers provide the desirable prescribing behaviors.

Hence, organizations that are basically a part of the new liberalized atmosphere like Mankind and Piramal Healthcare who use positive reinforcers (to employees ie., the internal customers, and to the external customers like doctors, chemists and stockists) with intelligence, creativity and tact are succeeding faster in the Indian pharma marketplace, while other top pharma companies are wondering: Why are we stuck?!

Thanks for reading this blogpost, India is a very strong emerging market, with more marketers (including pharma marketers) pouring their efforts to succeed here. And as competition gets thicker, corporate mindsets are becoming more important. Earlier you had to just produce, distribute, and appoint personnel to man the operations, it was sufficient to survive and grow at a sedate pace. Today, one has to market the produce! And this is a very challenging process. Please do scroll down and read all other posts, kindly click on older posts if required, and do recommend this blog to your colleagues.


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Simple superb explanation! I appreciate your efforts. thanks for sharing!

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Sunil S Chiplunkar said...

Thnks for your time, reading this blog, and chipping in a comment. God bless!