1. A STRATEGY PROPOSAL FOR OPERATIONAL COST
REDUCTION AND MAXIMUM VALUE CREATION WITHIN
AN ORGANIZATION
By EGWABOR C. N.JOSEPH. Monday, May 2, 2016.
Beingpart of requirementsforthe awardof certificationbythe Instituteof LeadershipandManagement
at LonadekNig.Ltd. The article isdividedintotwoparts;Backgroundto strategyandSoul of strategy.
Background to Strategy
One way toapproach thisdiscussisto view itas a leadershipandmanagement exercisetodefinea
philosophyforproducinga highvalue andlow costorganizationfromanexistingorganizationespecially
withrecourse tothe debate onorganizational effectivenessandefficiencyaimedatpositioningthe
organizationforglobal competitiveness whileapplyinganddevelopinglocal contentinaharshoperating
environmentanduncertaintimes.The artandprinciplesof leadershipandmanagementwill alsobe
germane tothisexercise.
What is leadership? What is management?
Accordingto Northouse (2007, p3),leadershipisaprocesswherebyanindividualinfluencesagroupof
individualstoachieve acommongoal.There are fourfactors of leadership(U.SArmy,1983); leader,
follower,communicationandsituation.Brene Brown,aresearchprofessoratthe universityof Houston’
graduate school of social workswhose workhas ledtoa new MBA curriculumat Stanfordwhich
emphasizes leadershipdevelopmentthroughexperientiallearningandemotional intelligence,
acknowledgescuriosity,compassion,empathyandvulnerabilityas the mostcrucial leadershipskills.
From the foregoing,itisseenthatforthe leadertogain trustand collaborationof the followers,he/she
mustdisplaycritical traitsof curiosity,compassion,empathyandvulnerabilitytobe able toeffectively
communicate the requiredsituationfromthe presentsituation of the organizationandthe required
strategy.
Managementhasto do withforecastingandplanning,organizing,commanding, coordinatingand
controllinganorganizationtowardssetgoalsviasetstrategies. Leadership setsthe goalsandstrategies
From the above,itisclear that leadershipandmanagementare differentbutnecessarilylinkedand
complementary.Inhis1989 book “Onbecominga leader”,WarrenBenniscomposedalistof
differences:amanageradministers, the leaderinnovates;amanagerisa copy,a leaderisanoriginal.
Throughthe historyof humanorganization harshanduncertaintimesalwayscall forinnovation,
leadershipandresult-orientedmanagementtowardshighervalue- lowercostorganization. The ultimate
resultof thiswouldappearinthe financialsasimprovedReturn onInvestment(ROI),Return onCapital

2. Employed(RCE),shorterPayBackTime (PBT) and improvedEarningsperShare forshareholders,more
capital for corporate social responsibilityandimprovedgoodwill.Whenthe UnitedBankforAfrica
mergedwithStandardTrustBank inJuly6th
of 2005, her goodwill wasinseveralbillionsof naira.The
evaluationof anorganization’sgoodwill isimportantbecause itisameasure of sustainabilityora
measure of howlongfromnow an organizationorbusinesswill continue tobe a goingconcern.
What is organizational effectiveness? What is organizational efficiency?
In theirarticle “organizationalassessment;effectivenessvsefficiency”of 2013, Ilonaand Evelinaof the
MyleolasRomeris UniversityinLithuaniawrote efficiencyisorientedtowardssuccessfulinput
transformationintooutputs,whereeffectivenessmeasureshow outputinteractswiththe economicand
social environment.Twothings are critical;InputandOutput.Inputbasicallyreferstooperational cost
while outputreferstovalue created.Fromall the foregoing,awholesome studyof organizational
efficiencyandeffectivenessisalsoastudyon cost reductionandmaximumvalue creationwhich
ultimatelyculminatestoastudyon improvingorganizational performance.
KhademfarandAmiri (2013) suggesta model of highperformance organizationwhichmaintainfive
majorapproaches;strategic,customer,leadership,processesandstructure,valuesandbeliefs. The
strategicapproachtakesthe organizationtoa higherplane of maturitywithaclearvisionof where the
entityisgoing;inthiscase,goingfroman ordinaryorganizationtoahighvalue – low cost organization.
The customerapproach strivesforclientele loyalty,while leadershipapproachisassociatedwith
managementknowledgetotransferthe strategytoemployeelevel.The fourthblockis associatedwith
processesandstructure;organizationswithhighperformance shouldstriveforimplementingpoliciesto
supportthe strategy.Valuesandbeliefstranslatesintoorganizationalabilitytotranslate strategy.
Source;Frey and Widmer(2009)
What is global competiveness?
An organization orfirmissaidto be globallycompetitivewhenitproducesthe same orhighervalue per
unitinputcomparedto anyotherfirmwithinitsindustryinanypart of the world.Competitivenessis
oftena functionof internal andexternalenvironmentsof the organization.Forinstance,organizationsin
the underdevelopedpartsof the worldare not verycompetitivebecauseof the undercapitalized
environmentsresultingfrom unskilledworkforce and inadequateinfrastructure especiallythose of
EfficiencyInformation
Ef f
EffectivenessInformation
e
Input Processes Output Outcome Impact

3. energyandtransportation. The momentanorganizationbecomesgloballycompetitive,ithasgained
global comparative advantage
What is local content?
Local contentisa global philosophythatseekstodeveloplocal resourceswithinthe vicinityof operation
of an organization.These resourcesare supposedtobe developeduntil theybecomequalityinputfor
the organization.Itisa philosophythatshouldcontributetoincreasingorganizational performance in
the mediumtolongtermas inputsare at leasttheoreticallycheaperwhensourcedfromthe vicinityof
the organizationsoperations.In the shortterm, itmightnot contribute appreciablyaseffortsmighthave
to be put to inplace to deliberatelydevelopthe resources(humanandmaterial)toglobal standards.
Strategy
The soul of thisarticle seekstodevelopatwelve-pointstrategyaroundthe themesand subthemes
alreadyexpatiatedupon orjustmentionedinthe precedingdiscuss. The themesincludelocal content,
value,input,vulnerability,organizational efficiency,organizational effectiveness,returnoninvestment,
global competitiveness,innovation,infrastructure,values,beliefs,organizationalperformance,
leadershipandmanagement. Inthisarticle,contemplationisonahypothetical engineering,
procurementandconstruction(EPC) companyoperatingmainlyinthe energyandtransportationsectors
of the Nigerianeconomy.
1. Effective waste management and resource allocation;
These are mainlymanagementactivities. Towardsahighvalue – low costorganization,where waste is
unavoidable itcanbe seenina differentlight especiallyintermsof reusability.Forresource allocation,
the Paretoprinciple comesveryuseful.Asmore resourcesare committedtoareasof higherearnedand
sharedvalue
2. Earned value management and quality standards;
Value managementisbotha managementanda leadershipactivity.ForanengineeringfirminNigeria
operationsandproductsare subjectto SON,ASME, API,ISO,ASTMandseveral otherstandards. Forhigh
value – lowcost organization,Earned value mustbe sharedbetweenorganizationandcommunity(local
and global),managementandstaff,Organizationandregulatingagenciesof government througha
veritable supplychainmanagementandlocal contentstrategy.Forsustainableproductsandprocesses
deepenedadherence tostandardsiskeyandwhereverthere issustainability,there isvalue.
3. Tracking Industry trends, listening for disruption and being the disruptor;
Thisis purelyaleadershipactivity.Asthe fourthindustrial revolutionkicksoff earnestly,the artand
science of cloudtechnology,Bigdataandthe Internetof Things(IoT) ishelpingtodevelopthe capability
to studytrendsand beingthe inventorordisruptoror simplylisteningforandpreparingfordisruption.

4. 4. Improving workplace effectiveness;
Thisis a managementactivityandhasto dowithtraining,retraining,multiskillingandpruningdown
laboror staff where absolutelynecessary.Archivingandsounddocumentcontrol policyandmethod
alsocome necessaryhere.
5. Organizational structure, culture and workplace interaction;
For highvalue – lowcost organization,the “collapsed”organizationalstructure becomesveryuseful or
at leastmomentsshouldbe made available where everyoneisallowedandencouragedtospeak-upand
contribute ideasfororganizationalgrowth.Futuristicorganizationslike Google,Facebook, andApple
have time andotherresourcesallocatedtosuchmeetingsorgatherings.Forworkplace interactionand
culture,everyindividual mustbe encouraged toshow leadershiptraitslike curiosity,compassion,
empathyandvulnerability.Rewardandcareergrowthmustbe in line withthese traits.Peoplewho
exhibittheseleadershiptraitstend tocollaborate more,show greatercommitmentandpresentwith
betterperformance.
6. Workplace ergonomics and energy policy;
Ergonomicsisan arm of Anthropometryconcernedwiththe understandingof interactionsamong
humansand otherelementsof asystemandthe professionthatappliestheory,principles,dataand
methods todesigninorderto optimize humanwell-beingandover-all systemperformance (Source;
Wikipedia).Effectiveworkplace ergonomicsoptimizesenergyusage andleadstoan efficientenergy
policy.Energypolicyalsoextendstotransportationwithinandoutside the organization.Energypolicy
for highvalue – lowcostorganizationshouldbe towardsrenewablesandgreenerfossil fuelslike natural
gas.
7. Occupational, Environmental health and safety procedure and policy
The ultimate aimof thisstrategyisto increase sustainabilityandperformance byincreasing labor
availabilityandconservingman-hours. Thisismainlyamanagementactivity.
8. Improved materials and machine availability;
Increasedmachine andmaterialsavailabilitythroughreliabilitycentered maintenanceisone strategy
towardsa highvalue - lowcostorganization.ReliabilityCenteredMaintenance (RCM) encompasses
value sustainabilityviapredictive maintenance,preventive andcorrective maintenance.Here proper
storage and handlingviastaff traininganddevelopmentcomesuseful.
9. Deepening collaboration within and outside the industry;
Thisis a leadershipactivityasitentailsalotof vulnerability.How doyoucollaborate withalikely
competitor?IndustryLawsmustbe draftedtoimprove organizationalcapacityforvulnerabilityin
collaboration.
10.Engaging stakeholders through the use of old media, new media and other
emerging technologies;
Thisis a leadershipactivitythatbecomesveryuseful onlywheninternal processhave beenproven
effective.

5. 11.Corporate Social Responsibility, Customer Service Relations and goodwill;
Generally,deepeningcommunityengagementmeansthe organizationwillcontinuetobe inthe mindof
stakeholders.Toremainagoingconcern,an organizationneedstoremain inthe heartof her
stakeholdersandforpositive reasons.
12.Local Content development and application;
Local contentinthisarticle occupiesacritical positionbeingapart of boththe Soul to Strategyand
Backgroundto strategy.It isimportantto re-emphasizethatinmostscenarios aroundthe world,a
robustlocal contentstrategyis not a short termleadershipstrategyasitentailsalotof vulnerability
especiallyinthe shortterm.Inmost cases,itis longterm.The longterm gainsare usuallyquite
unimaginableespeciallywithregardstoreturn-on-investmentandgoodwill.