A transformational model for managing people

 

BUSINESSES OFTEN make the biggest investments
in machinery or equipment, thinking
these will improve their processes and
make them more competitive.
Gerardo A. Plana, executive director of
the People Management Association of the
Philippines (PMAP), however, believed that
businesses make the oft-repeated mistake
of neglecting to put investments in their
people who, after all, must man those machinery
or equipment and face these firms’
customers. For him, employees, quite simply,
make or break a company.
He explained: “What many do not understand,
is when people are mismanaged, it
will be more costly to the business. The
costs are hidden and impact the bottom
line.”
There are many ways these costs pile up.
An employee who has not been trained
well, for instance, can turn off customers, or
potential investors, or potential hires. For
another, employees who are disgusted by
the way the company is being run will resign,
to be followed by others. The constant
process of hiring and rehiring, of training
and retraining, impacts on workplace morale
and productivity.
Conversely, if the employees are happy,
then they will stay with the company or
deal with customers, investors or
new hires nicely. And this similarly
impacts the firm’s bottom
line.
Mr. Plana stressed that
just as investments in
machinery and equipment
are measured in
terms of return on investment
or ROI, so
too, must investments
in people. That is
why, “it is important
to improve the work
environment and hold
people longer… in
order to cut costs
and improve the business’
profitability.”
PMAP, the local
organization of human resource
management professionals,
is pushing for a set of standards in
people management, for adoption by either
big companies or the small and medium enterprises
(SMEs). Mr. Plana calls these standards
a “roadmap.”
“We have an advocacy that there is a
better way of managing people and there
are standards. Companies need to use this
roadmap to achieve excellence in people
management,” he said.
PMAP has gotten the license from the Investors
in People (IiP) based in the United
Kingdom to certify business organizations
that follow these standards. IiP is not only
an international certifying body, it also promotes
the principle that at a company’s
core are its people.
Mr. Plana, who also serves as chief executive
of Investors in People in the Philippines,
says the IiP certification complements
that given by the ISO to company processes
or activities. The certification can act as a
badge that a company is serious about managing
its people well, and so attract more
customers, investors or employees.
“Take a hospital for instance.
Will you go to
one for treatment
where the
nurses and doctors are disgruntled or where
they happy and satisfied?”
But Mr. Plana hastily clarified the certification
is just a “bonus.” “What is important
is that a business is following the roadmap
to become better in people management,”
he stressed.
There are 196 standards but these can
be clustered into six: alignment, development,
empowerment, recognition, continuous
improvement and modeling.
Managers in the case of big firms or the
owners in the case of small businesses need
to see if their employees are aligned with
the business’ goal. “Are employees focused
on business objectives and are they clear
about their roles?” Mr. Plana said, explaining
the first standard.
Second, employees must be “capacitated,”
that is, given training to upgrade their skills
in order to competently do their tasks. And
third, they must be given enough freedom,
enough leeway to achieve their assigned
goals and to make decisions
on their own.
The next three are “critical,” Mr. Plana said, as they form
the core of the standards.
Employees must be given recognition.
The PMAP chief explained: “Are people
told how they are progressing? People must
know, otherwise, they will get de-motivated.”
Fourth, employees must continuously
evolve, change. “There must be continuous
improvement,” Mr. Plana said. “They must
have a sense of dynamism, of changing for
the better, and of themselves becoming
part of the change.”
Lastly, employees need a model, a
leader, who walks what he or she talks.
“The leader shows the way. There must be
no dichotomy between what he or she says
and does,” Mr. Plana pointed out.
Problems arise, he added, when managers
or the business owners lack credibility.
“It will be hard to effect change then,” he
stressed.
The big firms are “more enlightened,” he
noted, when it comes to investments in
people, putting money in training programs
and consultants. This is understandable considering
the size of the organization and
their need to be limber to adapt to change
and to meet the competition.
Small firms cannot be neglectful of investments
in their own people, however,
even if the business owners themselves take
on the role of human resource managers —
in addition to other roles. It is precisely for
this multiplicity of roles that owners need to
take a hard look at how they are managing
their people.
“In SMEs, it is all about growing the
business, thereby neglecting the people
side of the business,” Mr. Plana said. “As
such, these businesses often fail, confronting
a high turnover or a low retention rate.”
Small business owners who are serious
about creating a challenging and nurturing
working environment — humane workplaces,
Mr. Plana stressed — have a higher
chance of growing their businesses.
“The inability to execute plans is basically
a ‘people’ weakness,” he pointed out.
“If SMEs put importance on better ways to
manage their people, then they have a higher
chance of carrying out their business plans.”
Another point to consider is SMEs don’t
attract the best talents. They therefore must
work hard on “making the best” out of what
they have.
Knowing the standards — or getting a
certification — entails cost but PMAP and
IiP are willing to be flexible where SMEs are
concerned. Instead of paying for the cost individually,
Mr. Plana said SMEs can band together.
“Two people each from an SME — say
10 SMEs — can attend a training, and pass
on the knowledge to their organization,”
Mr. Plana said. “So much the better if one
of the two is the business owner.”
“What we want to do is to make the
standards available here. It will be very expensive
if they go straight to London. We
want to make it mass-based,” he added.
Several local companies have signed up
for the IiP certification process. To mark
their progress against the 196 standards,
the IiP hands out bronze, silver and gold rewards.
The First Philippine Industrial Corp. (FPIC)
last year became the recipient of the first IiP
Gold Award given to a local or Asian company
for satisfying 165 of the 196 IiP standards.
FPIC, a member of the Lopez group
of companies and supplier of the pipes that
transport crude and refined petroleum products
from Batangas to Metro Manila, is
manned by just around 40 employees.
The bronze award is given to firms that
meet 65 standards, and the silver, 115 standards.
Mr. Plana stressed that while the standards
will cost companies, whether big or
small, to get acquainted with and apply,
they are a business investment.
“Do you want to improve your profits
through people? If not, then continue mismanaging
your people,” he said. “It’s a
choice.”

Managing employees in small businesses

IT IS SAID that small firms do not have the
same kind of resources as large firms to
implement formal human resource management
programs. Small firms, however, still
need to keep their employees satisfied and
productive especially in the light of higher
competition.They need to recognize these
employees can be a source of competitive
advantage.
On the surface, it seems small firms have
little need to invest in the management of
their people. They have only a small number
of people, who take on broad responsibilities
and perform multiple tasks.
The entrepreneur has a definite mark on
business operations and has an informal and
personal relationship with the workers while
the workers themselves relate well among
themselves. His business depends much on
the local market and usually has a limited
number of customers. In short, the people
side of the business is fairly small and contained
and it can be argued the entrepreneur
need not turn to other people for
help to address “people” issues
(Koning, 1992).
But small businesses
grow.
When they do, they typically encounter
problems related to people. Getting the
right people for the right job is one. Retaining
employees, especially the good ones, is
another. Negotiating wages and salaries becomes
complicated while training and development
becomes a necessity. Tax regulations,
community relations, and other HR
concerns can become an extensive burden
for the growing small firm.
The small business, as a result, is inundated
with new challenges. It must not only
take care of the basics of personnel management
— of hiring and firing, of fulfilling
contractual and governmental commitments,
and satisfying the employees with tokens of
benefits and other company provisions —
but must also move towards higher levels of
people management to ensure that people
are not only satisfied and productive but
also a source of competitive advantage.
How does a small business make its
people a source of competitive advantage?
For one, it can increase employee satisfaction.
This can minimize employee turnover,
absenteeism, and lost productivity. This can
be done by instituting a human resource
management (HRM) program, creating an
HRM department, or bringing in somebody
whose sole responsibility is to ensure that
people are managed well. As a guide, some
HR experts (Little, 1986 and Caudron, 1993)
suggest that businesses with less than 100
employees can operate without a full-time
personnel or HR manager while a base of
150 or more employees would require an
HR manager or department.
HR capability can be extremely important
for firms functioning in dynamic and complex
environments. They must have the ability
to innovate, accept risk, and identify and
exploit entrepreneurial opportunities
(Hayton, 2003). While the owner-entrepreneur
can be expected to be
principally adept at these,
it may not be enough
for the firm to be truly competitive. He will need everybody
in his organization to have these abilities.
It will no longer be possible for the entrepreneur
to take on the entrepreneurial
challenges single-handedly. The days of the
Henry Fords deciding everything for the organization
or of a Don Andres Soriano deciding
on the flavor of the month for ice
cream are over. Every employee should be
able to make decisions at his level without
waiting for the go-signal of the one on top
of him. In today’s highly-charged and competitive
environment, not deciding or waiting
for directions will slow down service to the
customer and spell disaster for the company.
In this regard, Pfeiffer (1998) lists seven
HRM practices of successful businesses. They
are: employment security, selective hiring,
decentralized work arrangements, performance-
based pay, extensive employee training,
reduced status differentials, and information
sharing. To provide a source of competitive
advantage, people should be “leveraged.”
This means the power of employees
to do things should be strengthened by
adopting certain HRM work practices such
as those above that positively impact business
performance (Wagnar and Rodendeau,
2006).
Perhaps, the importance of HRM in small
businesses is even more critical in the light
of their comparatively meager material or financial
resources. Small firms must depend
on above-average, committed, and qualified
employees. Indeed, in many studies, the
connection between people regarded as
value assets and sustainable business success
has been proven (Behrends 2007, Reid
& Adams 2001, Huselid 1995, Astachan &
Kolenko 1994, and King-Kauanui, Ngok &
Ashley-Cotleaur 2006).
Where can small businesses go from
here? It may be safe to assume they want to
move forward in their HRM efforts as they
seek competitive advantage in the marketplace.
First, they may wish to define the
mission of their business. If they do not
have one, then all efforts should be directed
towards it. They then can take stock of their
present HRM capability and examine their
strengths and weaknesses.
For instance, how do they recruit and
place people? Is it crude and unimaginative?
Do they exclusively rely on referral from
relatives and friends? Do they use long-term
HR planning? Do they define jobs and responsibilities
in a way that is clear to
people? In relating with employees, do they
provide them opportunities to learn new
skills? Are owners perceived to be fair to
people? Do they show empathy for employees’
problems? Are there stable work schedules?
Do they consult their employees? Are
progressive HR policies in place?
In an age where companies and people
must learn new things continuously to keep
up with change, how do small businesses
ensure training for their people? Is there a
budget for training? Is free time given to
employees for training?
Finally, in the matter of compensation
and benefits, how do the small firms provide
these? Are these attended to informally
and without a system? Are jobs evaluated?
Are the appropriate HR policies on compensation
and benefits in place? As compensation
and benefits may impact operational
costs, do the small firms have options for
getting workers? Are semi-retired or older
workers considered for employment? Are
some work assignments outsourced?
In a manner of speaking, small firms today
have crossed the Rubicon. They have
reached a point of no return. They can no
longer stand still and be content with what
they have or where they are in terms of
business. They have a responsibility for society
to be better at what they are doing.
And the way to go is lift up their people to
become a real source of competitive advantage.
________________________________________
Mr. Baltazar is the president of the Partnership
Forum for International Trade Development,
Inc.

In business to make a difference

FIFTEEN YEARS AGO, businesswoman Noemi O.
Baltazar felt hopeless. Her newborn son Arby was diagnosed
with Down syndrome — a chromosomal disorder
characterized by impairment of cognitive ability and
physical growth.
It was something unexpected, to say the least. Prior
to giving birth to Arby, Ms. Baltazar was a typical
housewife, married to Cesar. They already had three
sons and a daughter. Little did she know her life was
about to change when Arby came to her life.
“Initially, I was sad of course. Like every expectant
mother, you want to give birth to a healthy child… but
that was not the case with Arby,” Ms. Baltazar said.
But instead of sulking about her fate, Ms. Baltazar
chose to accept the challenge, and turn it to an opportunity.
“The first thing I did was to remove all the fear, and
then the sadness, and then the denial,” Ms. Baltazar
said. “The earlier I dealt with those, the better for my
child, because then the attention would be focused on
him rather than on me and the rest of my family.”
Back to school
When Arby was six years old, Ms. Baltazar decided to
study Special Education, when she could not be satisfied
with the therapy and education her son was getting
from his school. In 2002, Ms. Baltazar—who was
then already 47 years old—enrolled in a master’s degree
in Special Education at the University of the Philippines.
“I knew also, deep in my heart, I really could not
find a perfect school for him. There was no perfect
school actually so I thought I’d better study so I could
help my son. Whatever he was learning from [the
school], maybe I could complement with whatever I
learned, so I took up Special Education,” she said.
An accountant by profession, Ms. Baltazar admitted
returning to school was initially difficult. To encourage
her, her husband who is a chemical engineer, also enrolled
in the same university to take up a doctorate in
educational psychology. (They are currently writing
their theses).
“We were both venturing into a very different field.
But we were doing it for our son. Our only intention
was to help him,” she explained.
It was during her studies that she discovered there
were many things she neglected to do to help her son
while he was growing up. “As I studied, I realized I
20 VWEEENKTENUDR WEASRRIOR JAN 2005
should have given more attention to him. I should
have stayed with him more. I should have been there
for him,” she narrated.
It was at that point that Ms. Baltazar resolved to
set up a therapy center to help similarly situated parents
deal with their special children and help these
children lead productive lives.
Born out of being a mother of a special child, Ms.
Baltazar set up Therapy Plus Learning Center last August
in an office space at the City & Land Mega
Plaza Building in Ortigas Center in Pasig City.
‘World of learning’
Armed with her knowledge of Business Management
System (BMS) obtained from attending seminars by
the Partnership Forum for International Trade Dev’t.,
Inc. (FITDEV), Ms. Baltazar was able to efficiently set
up Therapy Plus in just six months. (Husband Cesar is
the president of FITDEV).
Learning from BMS to clearly define a business,
she positioned Therapy Plus as an alternative to
other therapy centers and special education schools
currently catering to special children.
“Looking for the right school could be very frustrating.
Most of these schools, we have to understand,
are mainly for business,” she said. “In our
case, since I define my business as a center that
opens a world of learning and development opportunities
for children with special needs, we focus on
what we can do for our clients.”
Thus, in Therapy Plus, there are regular consultations
with parents and caregivers of the special children
to ensure that everything done during the
therapy sessions would have follow-up activities at
home.
”Before, I just brought my child to the therapy
session every week, then that was it. I didn’t know
what the therapist did, and what was the response of
my child,” Ms. Baltazar narrated.
“I found that lacking. That was not enough. So
here at Therapy Plus, we have sessions with parents.
The therapists discuss with the parents, or whoever
takes care of the child. If you really think about it,
what do you get from a one-hour session? So there is
really a need to have a follow-up at home to see if
the child really learned, and was able to apply what
he or she learned from the therapist or teacher.”
And while other learning centers only provide
speech, occupational and physical therapy to special
children, Ms. Baltazar said Therapy Plus takes it a
step further by providing “interest group” sessions
on swimming, painting and drawing, dancing and
bowling.
She said she thought of offering these after finding
out there are hardly any classes for sports and
recreational activities for special children.
“My son loves sports. He plays golf. He is very
good in table tennis. He plays basketball as well. But
whenever there are sports clinics during summer, I
discover these do not accept special children.”
She said the interest group sessions are conducted
at venues outside the Therapy Plus office in
Ortigas Center, such as her house in Valle Verde I in
Pasig City. “Since art supplies can be very costly, we
decided to offer the art and drawing classes in my
own home to save on costs,” she explained.
She said offering a distinct service sets Therapy
Plus apart from its competitors, something that she
learned from the BMS seminars she attended last
year.
“One of the BMS principles I learned was ensuring
repeat customers to guarantee the viability of the
business. By offering something unique, I am assured
I will be the preferred source of therapy for special
children,” she explained.
Ms. Baltazar added she is very lucky to get competent
individuals to handle the classes. The dance
classes, for instance, are conducted by a member of
the professional dance group Whiplash, while the art
classes are facilitated by hall-of-fame award winners
of the national art competition conducted by the
Metrobank Foundation.
Knowing the market
Ms. Baltazar said Therapy Plus caters to special children
up to 18 years old. With her knowledge of being
a mother of a special child, she was able to tap
her network of friends to help her spread the word
about her new business.
She said that based on studies, Down syndrome
occurs in one in every 800 births. In the Philippines ,
she said the Down Syndrome Association of the Philippines
has a registered membership base of 2,000.
“Since I am very talkative, I get to meet all these
people, who refer clients to us,” she said.
She said when parents learn she is also a mother
of a special child, they prefer Therapy Plus to other
therapy centers in the metropolis. “They know I understand
better. I am coming from a place of concern..
They know that I know what they are going
through. I have a mother’s point of view,” Ms.
Baltazar said.
She said her knowledge of the market gives
Therapy Plus its distinct advantage over its competitors..
“It is important to know the market. It is the
people you are serving,” she said. “You may have a
good mission-vision statement, you may have good
facilities, you may have good people, but if you
don’t have clients, you don’t have a business.”
As of December, there were 12 students enrolled
in Therapy Plus’ various course offerings and sessions.
Having just 12 students might force some centers
to accept “regular” students for tutorial just to augment
their income and keep up with their overhead
expenses. But following the BMS precepts, Ms.
Baltazar has never lost sight of her business focus—
to provide therapy and education to children with
special needs.
“Without BMS, probably my business would not
have focus. It will be hodge-podge. But since I am
focused, I am keeping my clients satisfied with the
services I offer,” she said.
Ms. Baltazar said that for a relatively new business
like hers, there have been missteps along the way. In
her case, she found she was not charging enough to
cover rent and the salaries of teachers and therapists.
But using the BMS principles she learned, she
has since then adjusted the rates while still keep Therapy
Plus’ services competitively priced.
“My goal is to make a difference in the lives of
our clients. Did we make a difference in their lives? I
think that is how businesses should be run,” Ms.
Baltazar said.

No trifle thing

 

IT WAS ALREADY TWO in the morning but Angelita
“Anji” Resurreccion, co-owner of consultancy firm
Passion for Perfection, was still awake.
Anji and her husband and business partner, Rene,
were in a panic as they desperately searched for a
document they needed for a training the next day.
Thus, while the rest of the world slept during those
unholy hours, tempers flared at the Passion
offices, as Anji, Rene and their staff went through
their files.
That was before Ms. Resurreccion and her company
learned about the Business Management System
(BMS), which she described as “a tool that can
make one an intelligent businessman.”
“That incident happened in 1998. I was not aware
of BMS then,” Ms. Resurreccion said in Filipino.
BMS teaches an entrepreneur the importance of
becoming the preferred supplier in his chosen market.
Ms. Resurreccion said BMS would help a businessman
identify the crucial tasks that have to be
done to improve the management of the enterprise.
“It can help you face stiff competition and identify
the important things you have to do and not the
things you want to do just because these are popular
or are being done by others,” she said.
Many opportunities
Ms. Resurreccion said she and her husband formed
Passion for Perfection in October 1991 in response
to the demand for training and workshops. They offered
courses for business start-ups and expansions,
and seminars on positive work attitude, public speaking
and labor management for private companies.
The company’s mission is “to be a global service
provider that epitomizes excellence and professionalism
in the delivery of achievement products and
programs.”
During its first year, Passion served local clients.
In subsequent years, the Resurreccions traveled to
countries in the Asia-Pacific, Africa, South America
and Europe to conduct training to various groups.
Aside from providing training programs, Passion also
sells motivational books and educational games designed
to teach business planning, management and
values such as punctuality.
The company has provided services to government
agencies such as the Trade and Labor departments
and the Technical Education and Skills Development
Authority, companies like the Manila Electric
Co., Purefoods, and Eastern Telecommunications;
and international clients such as the
German Technical Cooperation and the International
Labor Organization.
Armed with a master’s degree in psychology from
the University of the Philippines and more than two
decades of experience as trainer or consultant for
companies and institutions in 15 countries, Ms.
Resurreccion was poised to take advantage of many
opportunities while doing something she loves.
V E N T U R E S
“There was a great demand for training at the
time. People relied on us for supplies, venues and
even training reports,” she said. “We had to do everything
from conducting the training to providing
the needed materials or even the venues.”
Ms. Resurreccion, who had worked with companies
and groups based in countries like Brazil, Indonesia,
Malaysia, Vietnam, Singapore, Thailand and
even as far as South Africa, knew everything she
needed to know about her craft. But a panic-filled
episode would show she did not have everything
down pat.
Locating files
Ms. Resurreccion said that as Passion kept responding
to the needs of clients, they overlooked aspects
related to production, specifically the handling of
materials. And this became evident during the “2
a.m.” episode.
“I knew we had problems about filing but I never
knew it would be critical to our strategy as a business.
We could not locate the files we needed,” she
said. “Diyan (production side) kami nadale (We
bogged down in that aspect).”
Ms. Resurreccion said these changed after she
V E N T U R E S 17
18 WEEKEND WARRIOR JAN 2005
Rene and Anji
Resurreccion at
the Passion for
Perfection office.
learned about BMS in 1998. “The UN (United Nations)
brought BMS here. DTI (Department of Trade
and Industry), one of our clients, identified us (Passion
for Perfection) as trainers. We were trained to
train others,” she related.
But even the greatest teachers could still learn a
thing or two from others. Such was the case with Ms.
Resurreccion, who realized she needed to make improvements
to her business.
There was no problem with marketing but production
was spotty. They therefore began classifying
and digitizing their files to make them easier to locate.
“BMS teaches you to focus on what is important.
Before, we spent much time making our reports attractive.
But there was one time I saw my report on
the shelf of one of our clients. It remained unread
and untouched,” she said.
“It is good to [make the reports attractive] but
when you lack manpower and time, you may not
need to do that. In my case, that was not the reason
why the clients patronized my services.”
She said BMS also taught her to concentrate on
what attracted her clients: Passion’s training programs.
“We offer training programs that inspire
people to achieve. We configure our training programs
to have an ‘experiential quality.’ The learning
experiences we offer are uniquely designed or customized
to approximate the work context of our participants,”
she said.
She said BMS also allowed them to streamline
their operations and trim costs. ”Before, we would
hire people to fix certain things but after we improved
our management, we no longer needed to
do that. This helped us reduce our expenses,” she
said, adding Passion does not need a big staff in order
to run.
Whereas before she maintained offices in Manila
and Lipa manned by four-full-time assistants, she
streamlined processes and retained just the Manila
office and two assistants. “The Lipa City office was a
branch office. It did not do very well, and BMS
helped me accept the fact it was a wrong decision to
open that branch,” Ms. Resurreccion said.
“After we decided to close that, we pursued expansion
by publishing books and other resource materials
for trainers.”
Passion, she added, also added research to its list
of services. “It is not our main bread and butter, but
last year it brought in some substantial revenues,”
she shared.
Ms. Resurreccion said the application of BMS to
Passion allowed them to share its advantages to
budding entrepreneurs. And learning the BMS
framework and applying it to her business operations
made her a credible teacher.
“We were trained to be master trainers and counselors
on the BMS. We first had to prove that BMS
works. Proving it presupposes you believe in it,” she
said. “How can you prove something you don’t believe
in? All of us decided to prove BMS works in
two ways: first, by applying it to our own business,
and applying it in other businesses.”
“Of course, the practice of any newly-learned skill
will make one more competent. But I think the issue
is more of credibility. How can you advice others
when you yourself are not using the same tool to improve
your own business? ”
Ms. Resurreccion said their BMS trainees found
the framework “very reasonable, interesting, and
practical.”
“But I found that business people do not care
whether it is called BMS or XYZ or ABC. They care
not about labels and frameworks. They care more
about the message,” she said.
But while much has been said about the advantages
of BMS, Ms. Resurreccion said these would
not materialize in an instant. “Business people find
BMS simple and easy to understand. However,
when it comes to application, it is not simple. It
takes patience and plenty of information to go
through the process of strategic planning. Counselors
are needed to help businesses sift through
ideas.”
But Ms. Resurreccion stressed learning BMS was
worth it as this allowed them to help small businesses
while spare them from sleepless nights.
“We no longer need to stay awake at dawn to finish
our tasks. We already improved our system of filing…
BMS helped us systemize our thinking,” she
said. “Our training of entrepreneurs has not been
the same since.”

 

A wide view of a business

 

THE IPM GROUP of Companies, a family-owned enterprise
with roots in construction, has an
overarching framework for doing business: to generate
profits by delivering products and services to
more customers; getting the clients of its competitors;
and, converting non-clients into customers.
The group, which straddles the line between medium-
sized enterprise and a large-scale business, has
adopted this framework to determine its course of
action and business direction, and if its rapid expansion
in recent years is anything to go by, the approach
works.
“Right now, we’re into several businesses. Overall,
we’re now bordering on [being considered]
large,” Dwight M. Ramos, senior vice-president of
the group and head of business development, said.
V E N T U R E S 13
14 WEEKEND WARRIOR JAN 2005
Started in the 1980s, the IPM Group, whose name
comes from the initials of proprietor Isabelita P.
Mercado, was set up as a construction company but
later diversified into trading, waste management,
business process outsourcing (BPO) and others.
After acquiring a BPO firm in 2004, the group began
beefing up its waste management business, venturing
into landfill operations in addition to garbage
collection. It is also exploring opportunities in the
mining sector.
To help the group achieve its business goals, it
has integrated the Business Management System
(BMS) into its management processes.
Mr. Ramos said the system has made it easier for
the group to determine its courses of action.
“BMS allows you to view your business and manage
it as a whole. It doesn’t treat the business like
it’s made up of several compartments where costs
are scattered, you see the entire thing as a whole,”
he said.
“Your basic questions are: what’s the business
objective? what is the product and whom is it for?
This makes it easy to see the effects of what you do
in one part of the business on the other parts. [We
can decide on which actions to take] on the basis of
which one redounds to [accomplishing] the objective…
You get to choose, and you can prioritize
[plans].”
Introduced to BMS in 2005, Mr. Ramos said he
found the tool a good fit for IPM, which had been
doing things the BMS way without knowing it.
“It dawned upon me that many of the things we
were doing were BMS-based. But now, I found there
is actually a system and what we were doing could
be more thorough and easier to implement. There
would be less mistakes and the approach to managing
our business would be more comprehensive,” he
said.
Adopting BMS
To get other managers to be on the same page as
him, Mr. Ramos asked the Partnership Forum for International
Trade Development Inc., a non-profit organization
that trains enterprises on the use of BMS,
to conduct a seminar for IPM’s senior managers.
Since then, the group has used BMS processes in
determining the way forward. When the group
started its ICT business in 2004 following the acquisition
of a BPO firm, for instance, it had done so
blindly.
“When we bought the BPO firm, we didn’t understand
it very well. It was an investment opportunity
because the previous owner was my boss’ friend, so
we decided to get into it, anyway, it had employees
and everything,” he said.
Following the acquisition, the group started marketing
to clients. Representatives went to the US to
make pitches and conduct road shows to BPO endusers,
but the company soon saw cost considerations
outweigh the closed deals. It was time to regroup.
“Using BMS, we defined our business [and] found
out that the BPO was not for end-users but businesses.
We were marketing to the wrong people,”
Mr. Ramos said.
Thus, instead of going to end-users like banks and
offices, IPM went to BPOs that were servicing these
establishments and explored subcontracting.
“We offer our services now, not to the bank, but
to the BPO,” Mr. Ramos said.
This led to a change in strategy—from trying to
secure contracts from end-users to piggybacking on
the clients of service providers. Because service providers
look for cheap subcontractors, IPM had to
slash its pricing. Margins were lower, but volume
compensated for the smaller spreads.
Redefining the unit’s business direction had another
added benefit: it drastically reduced IPM’s expenses
as company officials no longer needed to
take costly trips to the US.
“We didn’t need to market in the US anymore
because our clients were the ones doing the marketing.
They don’t need to travel from the Philippines
because they are based there. They are able to do
things that we found difficult to do,” Mr. Ramos explained.
And because they no longer had to maintain a
presence in the Makati central business district, IPM
moved its BPO operations to a warehouse in Pasig
City, where real estate costs much less.
“Iba na ang concept ngayon, iba na ang model
“BMS doesn’t
treat the
business like
it’s made of
several
compartments.
You see the
entire thing
as a whole.”
V E N T U R E S
(The concept and the model have changed). Now we
save on costs. Kailangan mababa kasi yan ang gusto
ng kliyente natin (It has to be low because that is
what the clients want),” Mr. Ramos added.
Waste management
The group also employed BMS in determining the direction
for its waste management business.
“Looking at BMS, we focused on finding who our
client is: is it the one who throws the garbage, or is it
the mayor? If it’s the mayor, what does the mayor
need? Efficient and cost effective collection of garbage,
so that the local government unit could save,
and most importantly, it has to be uninterrupted,”
Mr. Ramos said.
As uninterrupted service means making sure that
landfills are open for dumping, IPM formed the Solid
Waste Contractors Association with other waste
management service providers.
“The wisdom for organizing the group was to
have a say in the disposal site. BMS also tells you
that networks and alliances are part of your resources.
When we you are an industry, you have
clout,” he said.
IPM went further: from having a say in the operating
hours of the landfill, the group “gathered our resources
to establish our own disposal site,” Mr.
Ramos said.
“We built the first sanitary landfill in Clark. Using
our resources, we partnered with a German firm.
They provided the technology, we provided the construction.
We were able to set up the engineered
sanitary landfill that is compliant with all the environmental
laws,” he said.
In 2006, the group partnered with an Australian
firm and operated the dumpsite in Payatas, Quezon
City for the local government.
“And we now have our own disposal site in
Morong, which opened last year. We are no longer
dependent on government—it’s part of our strategy
to provide uninterrupted service,” he said.
He added that venturing into landfill operations
opened new avenues for expansion as well. “We now
construct sanitary landfills. We’ve constructed one
for San Pablo City and Davao and we are now negotiating
to construct several others in places like
Boracay and Baguio.”
Also another avenue the company is looking at to
improve its services is recycling. Efforts at recycling
undeniably boost a company’s image, but Mr. Ramos
stresses that for IPM, it makes business sense to embark
on the environmentally-friendly venture.
“If everyone has efficient trucks and people to
collect the garbage, the next wave will be, how can
we make our services the cheapest? We think we will
be the cheapest if we find value in the trash we collect.
So that is our focus now, going into recycling
technologies,” Mr. Ramos said.
Framework
The executive put things in perspective by saying
that IPM would likely have implemented its expansion
plans even without BMS, but added that the
tool provided the proper framework for IPM’s
growth.
“If you’re an entrepreneur, you’re basically doing
BMS, it’s just that you do not know. And when you
come to know BMS, it’s when you realize you just
have to systematize processes. But already, the
things or the principles that are being espoused by
BMS and the procedures they tell you to do, you’ve
already been doing it,” he said.
He also pointed out that BMS made things easier
by providing a management framework that is less
convoluted than the systems taught in management
schools.
“The applicability of BMS is more on SMEs (small
and medium enterprises) in growing and developing
countries.
“The mindset before was that for us to be successful,
we had to have MBAs. But if you really think
about it, an MBA requires long planning sessions like
two-day planning sessions. SMEs don’t work that
way. For family corporations, you basically talk to the
mother and father, and a decision is reached,” he
elaborated.
“BMS has a ready roadmap and it tells you what
to look for. There are steps and you don’t move until
you’ve answered each question for each of the
steps.”