Saturday, September 5, 2009

Targetting Practises in India

Many organisations get their targetting wrong in terms of fixing the same for individuals or territory. Targetting a segment of populace for achieve the desired sales is a broad objective, but when it comes to specific time bound targets in a given territory or a branch a rational and scientific method has to be adopted.

PSU Banks Targetting Strategy :

In some organisations like PSU banks targets for deposits, lending, no of accounts SB/CC accounts, credit card customers etc are laid down quaterly. The responsibility of achieving the target is fixed on the branch manager. Apparently target fixing seems to be ok. But if one probes deeper, one gets to know that the targets are not sub-divided among his staff members who are working under him. He may be having 8 to 10 staff both clerical and officers cadre along with sub staff. Sub staff who are either cleaners or sweepers can be excluded. Rationally speaking if eight members are given equal target of 10% each and 20% is allocated to the manager than it would be an ideal situation. Even that 20% allocation to the manager should be credited to the account of the juniors under him, which i shall deal with later in this article. This would ensure that branch manager has absolute unity of command over his staff members. The interaction among the staff members will be in the form of specific targets rather than arbitrary and emotional. Just imagine if the bank manager is able to inter-act with staff members on weekly basis questioning them how far they have managed to achieve the targets ? An archiac system of targetting in followed wherein the bank manager is fully and solely responsible for the target achievement of the branch. This naturally sets his staff free to play politics, non-co-operative attitude, etc. It also leads to ignoring the customers at large and thereby diluting the brand equity of nationalised banks. Some of the private banks too follow this trend blindly leading to imbalanced approach of managing staff. I only hope the bank managements change their approach in due course and avoid being a laughing stock in following an archiac system from decades.

Divide and Rule : Some bosses, right at the top of the hierarchy who occupy their seats by virtue of experience in some organisations believe in dividing and ruling the organisation or team members. This happens if the boss at the top believes that he can fetch more business by allocating individual target for the head of the branch.

Individual Target : A classic approach if a boss is handling a territory with 4 juniors working under him, he divides the target either equally or proportionately according to customer or potential for sale in the territory. In his individual capacity he helps his juniors to achieve their respective targets. This is an ideal way of managing a sales territory. What if the super boss at the head of organisation thinks that by dividing the territory in 5 parts instead of four, the boss chooses the best of the territory or potential area and selfishly tries to achieve his target and leave his team in the lurch. This creates a lot of tension, friction in the team. Thus if there are incentives fixed than the boss always grabs the incentive by virtue of choosing a potential territory and juniors will only be watching in dismay.

Partisan Attitude : If one is heading an all India organisation, he has to have the overall perspective of achieving all India targets. The customers may like a particular shade of tiles produced by one factory and places his order to fulfill his huge requirement based on the assessment of the production capacity of the factory. The boss feels that he is not based in the factory locale, where he is based in a factory location where the capacities are under utilised. He tries to divert the order to the factory where he is based. In the bargain there are numerous complaints when the production is shifted to the mother factory, the customer is highly dissatisfied and the biggest customer is lost forever. The company as a whole suffers because of one of the stupidest move of the super egoist boss.

The same partisan action can take place in trying to prop up a favourite sub-ordinate as against other juniors. He may be using the chamcha as a stooge to leak information about what is happening in the branch or territory. Ultimately the stooge does not perform his duty and ends up meddling affairs in other man s territory. This is a sure shot method to destroy the team spirit in an organisation. This invariably happens in a shop floor under the four walls but in marketing if it is used it can have dangerous consequence.

ACE : What does ACE signify ? Arm chair Executive : Many a times the boss believe that he has the magic potion and he can achieve all the targets by sitting in his cabin. They forget the fundamental that marketing is all about controlling the uncontrollables. It is impossible to dictate terms to a distributor, customer, franchisee, etc, many a times actual persuasion would work. Inorder to ensure that the boss knows his customer well he has to undertake market trips periodically to understand the ground level situation in the market place. Visiting the micro level customer is more important in an FMCG set up. In case of Micro level customer he can be pan beedi outlet, he may not be serviced directly by the company personnel, he may be buying from a wholesaler. At what price he is buying may be key. This information can be used when the wholesaler bargains for a better discount.

In majority of the cases a decision taken by an ACE back fires very badly and it can set back the company by years. I had a personal experience wherein an ACE was installed as a branch head in Ahmedabad. He was supposed to know nook and corner of Gujerat. He knew all the main customers by name and their family lineage. The promoter thought he can fetch or multiply his business multifold by the virtue of his experience. The ACE set back the company by ages by his unethical practice. He started dumping goods in the wholesale market and ended up destroying the very fabric of retailing. Out of staff strength of 15 field staff only 2 were happy who were manning the wholesale. The rest of field personnel were unhappy. Thus the organisation suffered immensely and was unable to recover their lost market share. The 50 year old organisation learnt a bitter lesson that ACEs dont work but basic distribution principle of management established over a period of time works. Only a professional can manage business effectively.

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