Assignment 2

"Critically analyze the organizations which operate in hybrid mode. Effectively

and efficiently develop sustainable leadership initiatives to improve the operation
management and enhance productivity and performance with a focus on financial
performance and people."

Introduction

Banks are fostering corporate responsibility, transparency, and the management of

environmental and social risks via new standards and codes of conduct. Because financial
statements alone do not provide a whole picture of a company's long-term viability,
conventional banking approaches to sustainability need to be revised. If the borrower fails to
disclose environmental obligations, such as decommissioning expenses, that might pose a
financial risk under this form of evaluation, they may go unnoticed. This might make it more
difficult for the borrower to pay back the debt. New initiatives for sustainable businesses are
increasingly being sought out by banks (Wee and Lacqua, 2021).

Background of the case

HSBC's Global Banking and Markets segment recorded an adjusted profit before tax
of $5.35 billion in 2019 compared to $5.9 billion in 2018. There were good numbers for
normalized revenue and investments under custody and supervision for HSBC's markets
services unit at the end of 2019. HSBC's primary Asian markets have seen a series of
challenges in the previous 18 months that have taken a toll on profitability. HSBC's European
unit lost $944 million in revenue between September and the end of the third quarter. Since
its founding, HSBC Holdings PLC has been committed to helping businesses worldwide
develop and prosper while keeping a laser-like focus on their customers (Battistella, 2020).

HSBC Holdings PLC in India has successfully implemented a gender-diverse staff

policy in one of its divisions. Appropriate strategies, realizable work models, and externally
and internally networking forums were used to ensure diversity regarding leadership
participation. More than 6,000 HSBC workers have undergone a 100-day period of intensive
activity that has changed the bank's culture. According to this experience, an organization's
culture may be modified within four months, regardless of how complex it may seem at the
outset. A tipping point in the company must be achieved so that the foreign concept can be
maintained in the long term (The Economist, 2020).

Challenges faced by the organization

HSBC Holdings Plc has promised to break up a hierarchical culture as part of its
simplification push. According to a document obtained by Bloomberg News from human
resource management head Elaine Arden, hundreds of managers may see changes to their
organizational bands in the months to come (Battistella, 2020).
 According to the document, as Europe's biggest bank, we have an inconsistency in
how we assign seniority in our management structure. There will be three bands instead of
four in September 2021, when HSBC will consolidate its top-four bars. HSBC stated in an
email that it is simplifying its leadership structure to ensure that the scope and responsibility
of the organization's transformation and development are clearly defined. Contractual
benefits for employees will not be altered due to this move.

HSBC's Asian business, notably its investment management branch, is now under
reorganization, which will result in the loss of thousands of employees. HSBC's executive
positions are referred to as GCB1 and GCB2 by the bank's global general manager and senior
business management. Group directors, management teams, and top management will take
the new organizational structure. According to sources who are acquainted with the situation,
some employees may be demoted as a result of these changes (Battistella, 2020).

HSBC intends to implement a long-term hybrid work paradigm. According to bank

forecasts, it will be functioning in a fundamentally new fashion due to its historic turnaround
and cost-cutting initiative. This is the latest bank to switch to hybrid, working a sustainable
model for all branches globally. It is part of the bank's overall cost-cutting strategy, which
includes a 40% decrease in property footprint in the next several years. In addition, it
eliminated the executive level of its London headquarters and amended its official policy to
allow two workers per desk, except those in its branches (The Economist, 2020).

Approximately 40% of the bank's office space will be converted to a hybrid working
style that will allow employees to work both from home and in the office. Following a drop
in earnings to £6.3bn in the last financial year from £9.4bn in the previous year, the company
has decided to decrease costs. A recent trend in the industry, particularly banks, has been to
reevaluate their operations after the success of teleworking during the epidemic. HSBC
Holdings Plc is reorganizing its European business to new heights of a worldwide strategy
review, which is expected to take place in the coming weeks. HSBC has announced a series
of executive departures, including the release of its chief investment manager. Citi and
Standard Chartered have signaled or planned a continuous transition to working from home,
while Goldman Sachs and Morgan Stanley want to return to the office.

Sustainable Leadership initiatives

This notion of sustainability leadership must be understood by everyone in an

organization or company, not just those focusing on sustainability. There is a need for
continuous cross-training, developing skills, and retooling to bring the whole organization on
board with the sustainability objectives. Organizations must be willing to make this
commitment to ensure that their employees have the most up-to-date knowledge and training
possible (Battistella, 2020).

A formal technique to guarantee that skills development may be organized via

training, partnerships, temporary contracts, or continual professional development (CPD)
programs ensures that employee teaching and learning plans reflect the skills gaps. Planned
skill acquisition is essential, but it's also critical to evaluate the success of such training. This
may be done as part of the yearly performance evaluations of staff (The Economist, 2020).

Operations excellence has been a popular corporate buzzword in recent years—a

growing number of companies implement operational excellence strategies. The old Lean
teams are being supplanted with functional efficiency teams in today's businesses. The
demands of the customer and other participants are also taken care of in today's modern
enterprises. Additionally, sustainability programs may boost an organization's overall
performance while affecting social and environmental change. Sustainable business strategies
may increase a company's profitability despite the fact they may appear paradoxical. Several
criteria may be used to assess how ethical and sustainable a company is. According to
McKinsey, firms that have strong ESG ratings outperform the market over the long run. In
the short term, sustainability measures may seem like an unnecessary expense, but in the long
run, they pay dividends (The Economist, 2020).

Even though this topic has been studied in the past, some undiscovered aspects of
operational excellence projects still need more investigation. Most research on operational
excellence has been practice-led, which is a problem in and of itself. Even though there are
several operational excellence models, there is a need for a single optimal model. A
functional excellence program's long-term viability is also a concern. It is challenging to
retain the effects of operational excellence initiatives beyond the early benefits. In addition,
most operational excellence projects solely evaluate the impact on a single economic factor,
leaving out the other aspects. Furthermore, many specialized improvement initiatives fail to
achieve the expected objectives and are thus prematurely terminated.

Quality prizes have been known to lose a lot of money after that. Even companies that
have won prestigious honors like the Shingo Prize have gone under. In other words, if you're
looking to invest, this is not a good sign. However, operational excellence projects have had
some success, but they are not always adequate to maintain long-term competitiveness. Many
formerly lauded institutions for their excellence have now found themselves in dire straits,
with some even contemplating bankruptcy as a last resort. The diverse outcomes of
operational excellence programs seem to be noteworthy and worthy of examination,
particularly in developing a sustainable, functional excellence program that will be
sustainable. Enterprises also require a paradigm for the long-term sustainability of operational
excellence programs. There are three components of sustainability in the modern-day
organization: economic, environmental, and social (The Economist, 2020).

Long-term success depends on a wide range of activities, including service efficiency,

marketing innovation, customer service, and so on. The term "operational excellence" refers
to a company's ability to offer superior quality, affordability, convenience of purchase, and
service compared to the competition. 4P's may be used to achieve economic or service
effectiveness. They are great individuals who build excellent relationships with suppliers,
customers, and society to accomplish perfect activities, which are crucial finance and
accounting processes, to generate beautiful goods which can satisfy and delight consumers
(The Economist, 2020).

Figure 1: 4P Model

Operational excellence models include conflicting components, such as subjective and

objective characteristics, rational and irrational, individual and organizational aspects, that
need to be integrated into the 4P Model. The 4P Model is the only one that encompasses all
other components. It is advised by the 4P Model that a structure or plan be implemented to
attain operational excellence. A version of the 4P Model is seen in Figure 3. The Model in
Figure 2 employs a pyramidal structure similar to the Likers pyramid (TPS) to grasp the
Toyota Production System better. The enabler-result Model shown in the figure is one such
example. The first three are tools that aid management, while the fourth is a part of the
process. To sum it up: 4Ps is an excellent framework for a particular firm's context and
period, but it doesn't apply to every organization.

Figure 2: Significant role of leadership

Organizations have used various methods throughout the past four decades to improve
their goods, services, and processes, and all of them have been dubbed "operational
excellence." Lean, Six Sigma, Continuous Improvement, and Total Quality Management
(TQM) were some of the most popular approaches. The primary goal of lean manufacturing
is to eliminate as much waste as possible from the supply chain. Defects, over-processing,
waiting, inventory, movements, transportation, increased production, and unutilized potential
were the eight wastes of lean manufacturing. However, as a mindset, lean may be applied to
all aspects of the operational excellence conception discussed above, not only the production
system. It is a data-driven approach to business management that aims to eliminate process
variance, which can lead to mistakes or defects. This project-based approach may improve an
organization's products, services, and procedures. Improved client demands, productivity,
business processes, and financial performance are the primary goals of this approach (Wilson
and Spezzati, 2020).

Many firms have reaped the rewards of Six Sigma implementation since the mid-
1980s. In the workplace, Six Sigma was primarily utilized to enhance the quality of products,
services, and processes. Continuous Improvement or Kaizen is a collection of tactics used to
achieve good, continuing improvements in the work environment. ' Continuous improvement,
often known as Kaizen, is based on the premise that excellent processes lead to good
outcomes. The success of a project relies heavily on teamwork.

Additionally, it is believed that following a technique would lead to better results.

Teaching that minor improvements over time may have a significant impact is based on this
principle. Continuity is critical here. Efforts to continually improve are the key to long-term
success (The Economist, 2020).

The Way to Greatness Companies that have achieved significant and long-term
improvements in Organizational performance may be identified using a diagnostic
instrument. The evaluation comprises a total of ten essential factors. Put another way; they
are the ideas that must be put into practice. In addition, there are three critical outputs to
monitor. The applicability of the device is vast. It looks at how committed a leader is to
upholding its basic principles. This is done with an open mind and a readiness to consider
other viewpoints (Singh Deo, 2009).

The real advantage of sustainability leadership is that it integrates sustainability into

everyday business practice, but it is also the most challenging difficulty. Sustainable
company practices must be integrated into daily operations, starting with strategy. The
importance of long-term planning, goals, and objectives cannot be overstated in pursuing
increased corporate performance while simultaneously increasing sustainability. An example
of this is a set of continuous improvement or infrastructure improvements to improve the
everyday environment among businesses. Businesses may find it challenging to acquire the
necessary knowledge to implement these strategy shifts. International expertise may be used
initially, but the long-term objective should be to establish an internal understanding and skill
foundation. Domain and functional knowledge and particular sustainability skills must be
transferable across functional departments and projects to attain this goal. When pursuing
this, it is essential to consider new career paths and continuing education goals that
incentivize multi- and cross-skilling (Losada and Bajer, 2009).

Critical Analysis

An organization's ability to arrange its business processes to ensure long-term success

is referred to as sustainable operations management. Sustainability is defined as development
that fulfills current demands without affecting future generations' capacity to satisfy their
needs. In the WCED definition, social, economic, and environmental issues are all included.
Ecologically sustainable business practices are well-understood. Production and
manufacturing expenses might be used to systematize it at the plant level. Waste reduction,
pollutant reduction, operational efficiency improvements, energy efficiency, carbon
reduction, and so on are all aspects of ecological responsibility. Internal and external
elements of social sustainability are addressed. "Equitable opportunities, influence and
promoting connectivity inside and beyond the community, ensuring the quality of life and
providing democratic procedures and accountable governance structures" are the hallmarks of
socially sustainable communities. For a company to be autonomous, it must perform well on
all three dimensions: social, social, and environmental. All OPEX efforts should thus be
evaluated in terms of their economic, ecological, and social impacts to have a long-term
effect (Pilot, 2015).

Conclusion

The models of service efficiency were examined in terms of social, economic, and
environmental protection. Existing models are primarily based on experience rather than
theory. No one model or technique has uncovered all of the components essential for
developing and maintaining operational excellence. However, the outcomes are varied thus
far in applying systems to improve operational efficiency. However, long-term viability is not
assured. The operating efficiency models must be connected with sustainability ideas to
achieve long-term effectiveness. Many businesses fail because they lack a culture of quality
or excellence, not because they use the wrong tools or practices. As a part of any effort to
achieve sustainable organizational performance, a business should include a mindset that
considers social, economic, and lifestyle influences into all of its endeavors. The capacity of a
company to adapt to changes in the business environment and give solutions to consumers by
restructuring its resources, processes, and strategies is a crucial characteristic of its agility.
 References

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https://www.bloomberg.com/news/articles/2021-09-02/hsbc-ceo-plans-for-permanent-hybrid-
work-much-less-jet-setting

Battistella, P. (2020) ‘HSBC profits slump, plans restructuring’, Global Investor, p.

N.PAG.

Losada, A. and Bajer, J. (2009) 'How we transformed our culture in 100 days: the
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Singh Deo, A. N. (2009) ‘Gender Diversity and Leadership Inclusion: The Keys to
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