My journey as Consultant - 11

 Aligning Insights from Books with Personal Experience

For ten years, as I worked with small- and medium-sized businesses, I observed a major aspect of difference in running such businesses from what we had been taught in business schools and technology institutions. Our education system has evolved over time to impart knowledge in compartments, with a focus on getting specialisation to fill the needs of the modern industrial world, where large organisations are run based  on such specialisation. My training was no different. However, when I  started working with small- and medium-sized businesses, the boundaries of such specialisations were invisible and most of the operations were integrated as a whole, while the business was managed by an entrepreneur. Everyone working had to know something about every aspect of running the business, and roles were highly interchangeable when the need arose. 

This was partly because most of these businesses were an extension of the personality and background of the promoters and partly also due to  lack of resources to afford specialists to be part of running the businesses. Even if by chance a specialist did join, he would be totally out of place in that environment. If there was a need for such specialists to address specific issues, they had to be hired as consultants and not as full-time  employees. 

I started calling this the holistic approach to managing a business and shared this insight with other professionals who were working for large consultancy organisations, where each of them was part of a specialist group addressing a large corporate problem using their specialisation. One such interaction with Dr Ramdas Ramakrishnan, who was working for TCS at that time, led him to invite me to share my views with a group of consultants based in the Hyderabad office of TCS. I am introducing him here because Dr Ramdas became part of my change management efforts in later years through a breakthrough technology about which I will share more information in later posts.

So, while reading the book Reengineering the Corporation by Hammer and Champy, I started feeling that I had already experienced the major lessons from the book during my work with small and medium businesses, particularly since I was also involved in helping small businesses in adopting the emerging personal computers. Although this facilitated sharing of data between different aspects of the business which were computerised, it was important to ensure they would continue their small business approach. And, while ensuring growth, it was imperative not to add complexity in the day-to-day management, which was common with large organisations before information technology evolved. 

The thrust of the  book was how, with information technology as a key enabler, large organisations could be managed like small businesses by focusing on the processes and their outcomes, rather than on the individual functions. The book was responsible for making fundamental changes in management thinking across the world, along with a few other books like Theory of Constraints by Eliyahu Goldratt and Lean Thinking by Daniel Jones and James Womack. Before that, Total Quality Management (TQM) based on Japanese management practices was the rage of management thinkers and practitioners; suddenly, a new lexicon of management evolved based on ideas of organisation transformation and change management. I got immersed in absorbing these concepts by reading most of these books and also plotting ways to help organisations adopt these ideas. 

This was when Dr Prasad, while asking me to help implement reengineering in his organisation, also directed me to focus on teaching his people to adopt these concepts, rather than doing a study and producing a report, since he was sure the latter approach would not work. He used the words “Don't give them fish, teach them how to fish”. And, in the book too, Hammer and Champy had outlined a methodology for implementing the ideas of reengineering using the people from the organisation to reengineer the corporation. 

Backed with my self-confidence, along with a clarity of approach, I finalised a contract with Dr Prasad for taking up the first engagement in the power system group which was having problems. The methodology I followed was unique. I got a cross-functional team assembled and told them that, instead of giving them a lecture on the concepts, I would like all of them to read the book together as a team, so that we could discuss the ideas from the book for better understanding. This, I told them, would be invaluable when the need arose later to adopt them in their business context. Many of these youngsters had stopped reading any books after their college days once they started working and hence, to make it comfortable, I got the team members to read a portion of the book in front of the others in rotation till we completed the full reading. In between, we stopped where needed for me to clarify some points raised by the team members. During these discussions, I realised that part  of the assignment involved going into the manufacturing aspects of the business and I had not much exposure in that area since I had worked mostly in marketing, and I felt another person who had a good background in manufacturing could help me add value to the assignment playing, like me, the role of a consultant.

I had met Raghav Rao socially through my association with a Rotary Club where he had recently joined as a member. He was a mechanical engineer with an MBA from IIM Ahmedabad, five years senior to me, and with corporate experience as a CEO. He had just started his own consultancy with a focus on adopting good manufacturing practices based on Japanese ideas and a passion for working hands-on solving his clients’ problems. While discussing with him about my work, and exchanging notes on what he was doing, I realised that he could be a perfect associate, provided two things fell into place: one, he must be excited enough to join me and, second, if he agreed, Dr Prasad should be open to the idea of my bringing one more consultant to support me, and doubling the agreed fee. 

For the first part, I gave Raghav a copy of the Hammer & Champy book and asked him to read it; if he found it exciting, I would approach Dr Prasad along with him to give my fresh proposal to engage both of us together. After reading the book, Raghav agreed to my proposal and we met Dr Prasad after I had briefed him about Raghav and why I wanted him to work with me. 

Dr Prasad was always interested in improving the manufacturing practices in his organisation and was also convinced that Japanese management ideas such as Just In Time, Single Minute Exchange of Dies, One Piece Flow, etc., along with many ideas propounded by Shigeo Shingo, who was instrumental in bringing a major revolution in Toyota and other Japanese organisations, were worth adopting. Assessing Raghav’s knowledge and expertise in these systems, Dr Prasad agreed to double the agreed fee so that the two of us could work both on reengineering and improving manufacturing practices. 

Thus started an exciting association with Raghav and a roller-coaster ride of new assignments across many other medium to large corporations in which together we helped them implement change management ideas. Raghav gave Shingo’s books on Non-Stock Production for me to read and understand and help him in using the ideas from the book in our assignments. 

One unique decision we took was that we would not hire assistants to work with us. Instead, we called upon the client CEO in each assignment to spare us 5-8 bright young executives full time, who would be taught the principles that guided us and who would actually come up with the required process changes and handle the nitty-gritty of implementation. Not only did these employees know their processes (and their limitations!) the best, it was easier for the other personnel of the company to accept their proposals since they took ownership for the new ideas, and the changes were not seen as proposed by “some outside consultants”. To this end, we never made a presentation of our recommendations to the management -- it was always the reengineering team that did it.

Slowly, we developed better insights for future assignments from the current assignments to take on more challenging and complicated projects over the next 15 years. We also adopted innovative techniques to get the team members to learn to fish by taking them to observe similar situations in other, completely different, industries and how the way they worked could be adapted to their own problems. Since, in Hyderabad Batteries group, we were simultaneously working on improving manufacturing while reengineering the company, we formed multiple teams in the manufacturing areas to work on specific projects and some of the teams even involved workers on the shop floor who were actually doing the work. It was a delight to see them get astonished at how they could make their work much easier and more efficient by working smarter through intelligent process changes.  

The role of information technology in implementing reengineering was strongly emphasised in the book. But when we started this work in 1993 with Hyderabad Batteries group, or later with many other clients, unlike in the USA and some of the western countries, the use of computers and information technology was very low in most of the organisations in India. That was a major hurdle since, as part of implementation, we had to get these organisations to invest in computers and other networking technologies which were just introduced in the market and required capital budgets which they had not provided for before the teams came up with their recommendations. With organisations where the owner-manager was the deciding authority, getting such commitment was not a major problem; but, with large corporates with whom we worked later, the process of getting fresh capital budgets approved for IT was cumbersome and time-consuming, sometimes delaying implementation. 

Moreover, the IT industry itself was in its nascent stage as regards its focus on the Indian market, since IT companies were aligned to the more lucrative markets in the USA and other developed countries. So, getting affordable IT vendors to support implementation using IT was a big challenge and both Raghav and I had to use our network of alumni and other contacts to get them to come on board to develop customised solutions for our clients’ projects. 

Over the years, as the IT industry evolved and Indian companies also became more amenable to investing in IT, through recognising its importance in running modern businesses, this area of implementation became less of a problem. However, getting senior management to come on board to commit themselves to successfully implement these new ideas was often a challenge. They saw the reengineered processes and structures as a threat to their “fiefdoms” since, upon implementation, many of their current roles and importance would be lost and they were afraid of what was in store for them in future. And, unlike in the USA, where hire-and-fire practices were commonplace, lifetime employment was the norm in the Indian corporate world. Considerable tact, as well as the buy-in of the CEO, had therefore to be used in these large organisations in dealing with the human resource dimension of change management.

In the next post, I shall share how our journey evolved from the Hyderabad Batteries group to other organisations and how we went about getting CEOs of our prospective clients to first get excited about what our intervention could bring about, before going forward with each of them. And, additionally, how our proposition of being paid our fee progressively based on the success of our ideas, brought comfort to the CFO! In the process, I will also describe briefly what we achieved in each of these assignments, which gave us the foundation to build on for the next assignment.

My JourneyAs Consultant - 10

 Transition From Jack of All Trades To Change Management Specialist

While the Indian economy was going through major turmoil during the post-Mandal period, there were a lot of changes  taking place in the global environment too with the fall of Soviet Union as a megalithic state and the emergence of Japan as a major economic force. The liberalization and opening of the economy in early 1992 ushered in a concerted drive across the business spectrum to manage and cope with change. I was a voracious reader of management publications on Change Management. I saw that future  trends in management consulting would head in this direction and prepared myself to embark on a new journey. Two major assignments laid the foundation for a rewarding and very satisfying phase of my consulting career.  

Around this time, a lot of management literature started appearing in the form of articles in important journals and books by some management thinkers talking of organizational change and transformation as an inevitable path for survival and growth for large and other businesses. I read most of these publications and started realising that there was a need to reorient my own practice to adopt these new ideas to my client situations. Two major assignments and the clients associated with these assignments made it possible for me to focus on Change Management as the key driver for helping these clients. This started a new journey in my consulting practice while retaining the service model which I had honed with smaller clients. This also opened the doors for working with corporate clients later on. 

Another factor was that, post the economic reforms, many large and medium  businesses in India which had done well during the License Permit Raj started facing existential problems. Meanwhile, the global Big Five management consultants had become active in the Indian market, churning out reports and advisories to the industry and individual clients, and this opened the  mindset of Indian businesses to take outside help from consultants to help them deal with their situations.

In this background, I got my first breakthrough with both Apollo Hospitals and Hyderabad Batteries Group, around  the same time, in mid-1992. I had first contacted both  these clients to promote the Direct Mail and Direct Marketing services. In both cases the CEOs, after my initial meetings, got back to me with a proposal to engage me to help address their main business problems as a consultant. As I mentioned, Direct Mail advertising became the window through which consulting work was coming my way. Let me present each case separately  and  show how the move towards Change Management evolved.

Apollo Hospitals had started their Hyderabad Unit around mid-1988 after their major success in Chennai as the first corporate hospital in the country. Unlike the Chennai Hospital, which was located in the heart of the city, the Hyderabad unit was located in the then outskirts area of Jubilee Hills, which was just developing as an upmarket residential neighbourhood. In order to ensure that they got good references from local doctors, they had even made many local doctors shareholders in the Hyderabad unit. At the same time, they also promoted the hospital as an important referral hospital for speciality areas like heart, neuro and many other critical areas by having these specialist doctors as consultants. In order to fund the hospital project, they also had taken a large term loan from ICICI Bank at that time, for building the infrastructure. 

However, during the four years between mid-1988 and mid-1992, they started incurring losses and ICICI Bank had even appointed an outside professional from the hospitality industry as Managing Director over the family members who were otherwise running the hospital along with some key doctors who were associated with the hospitals. The CEO of the Hyderabad unit was Ms Sangeetha Reddy, who was managing most of the administrative functions except the medical services. I had contacted the marketing manager of the hospital for promoting the direct mail advertising services. However he had heard about  my consulting work from a common friend and decided to introduce me to the CEO after briefing her about my background. During the discussion I noticed that Ms Reddy was focusing on my consulting work and taking me towards a possible engagement to address their problems. After listening to their side of the issues, I suggested that to get a full picture of the problem it would be appropriate to conduct an attitude survey of the employees across all categories as also a customer survey as to how they perceive the hospital as outsiders. She decided on the spot to let me first conduct the employee attitude study and based on that report she agreed to take up the next study of a customer survey. 

Without going into the details of the methodology and other aspects of how such a study is done, I will just say that I covered practically all cross-sections of employees in an open-ended discussion. A corporate  hospital is run like a five star hotel, with most of the departments associated with running such an establishment, along with medical services forming the core area. I interviewed even a cross-section of the doctors, apart from other medical technical staff. 

Finally, when I submitted my findings to the top management, it came as a big shock, as the perception of the employees about the hospital working was completely in variance with the top management view. They immediately asked me to  take up the customer survey for which I suggested that we take the help of a specialist organisation in consumer market research. I had networked with one such organisation based out of Hyderabad and on my recommendation they were engaged under my supervision to conduct the customer survey. 

Their findings corroborated, from the customer viewpoint, what the employees views were which had been revealed during the attitude survey. Based on both these studies, I recommended a course of corrective actions both from internal management as also engaging with the customers. Within the next one year, the impact of these was positive and I earned the respect of the management to get back to them later with my proposal for Change Management after one year. I will discuss this later.

Let me now talk about the Hyderabad Batteries Group. Hyderabad Batteries was started by Dr A J Prasad sometime in the year 1977 as a small business to make batteries for industrial and military grade applications and subsequently moved into manufacture of power systems using their own batteries as an important component, with plants located in multiple areas around Hyderabad. I had approached them to promote direct mail advertising services, when I met Dr Prasad. During the meeting, he found out that I had worked at  ASCI as a marketing faculty where he also had worked long ago in the same department before starting his business. And he noticed that my primary focus was on consulting, while I was also engaged in marketing services in industrial products and direct marketing services. After getting to know more about my past work, he said he would get back to me soon. I was not sure if he was thinking of marketing services or consulting as a possible basis of engagement. However, after a month I got a call from his office asking if I would join him for a dinner meeting the next day.  As I was hungry for work apart from the prospect of a good dinner, I said yes and met him at his home first for an initial round of discussions when he also introduced me to one of his company directors who had come down to attend the board meeting earlier in the day. Afterwards, we moved to a nearby restaurant for dinner, where he asked me if I could do an attitude survey like I had done for Apollo Hospitals. Since he had mentioned the multiple units located in different corners of Hyderabad, I suggested I would take one unit at a time and submit my findings, before doing the others. He agreed, but insisted I must give him the first report within 15 days and the next one within the next 15 days. I told him point blank that the number of days  depended on how many people I needed to cover in each unit and I could plan my work only after I had spent a few days initially to understand their operations and the total number of people involved. He therefore agreed to let me come back to him when I finished my study within a reasonable time.

I presented my findings of the first unit in 20 days, and of the second unit in another 25 days. As usual, the survey results showed a picture which was different from the management perspective and compelled Dr. Prasad to take some serious actions. The two units had different business models. The original business was to manufacture only batteries of different types and supply them directly to end customers. The second unit was based on a technical collaboration with a Swedish company to produce special grade batteries along with battery-based power backup systems. So he assigned me to work on the second unit to restructure the organisation to make it more efficient and profitable. I was clear that restructuring would not ensure profitability, but it could definitely improve efficiency and so I would work on it. In the process, I formed a cross-functional team consisting of 5 youngsters from different functions, designed the data collection formats  and got them to get information on the current structure and job descriptions. 

To everyone's surprise, their work revealed that they had multiple levels with, at every level, the current job descriptions for the employees showing the same work being done by multiple persons. From the front line supervisor to Vice President, in each function employees claimed they were doing the same job, except that the higher level was claiming to supervise the lower level. The classic command-and-control model had evolved with time as the organization grew in size. So the team agreed with my suggestion that we needed to delayer the organisation and flatten the structure and make the higher levels add value beyond mere supervision.

Accordingly, we finalised a new structure and corresponding job descriptions consisting of only four levels: the top  management, middle management, first line supervisors and workers. The job descriptions focused on providing value-adding roles for middle management and top management while the real work was formed by the workers with guidance from supervisors. The final report was given to Dr Prasad after 60 days as per the contract. He liked the idea so much that he immediately ordered that my recommendations be implemented. While doing so, he handed me a book, Reengineering the Corporation by Hammer and Champy, which was a best-seller in the management category at that time and said that, after reading the book, I should next work on a project to implement the concepts of reengineering in his organisation. He also said that  the first project for that would be in the  power supply systems group which he had started about 7 years back and which was not making profits despite good potential. He said either I help him turn around that unit using the concepts of reengineering, or he would have to close it down.

Here I have to mention that Dr Prasad had a Ph.D. from MIT and had a sharp mind. He employed good professionals and gave them a free hand to run the business. He never got involved in the day-to-day operational details and only demanded results from his heads of divisions. He also took hard decisions very quickly and did not hesitate to act on them despite the fact that they were not palatable to many of the employees. Somehow, after my initial work, he started engaging me in regular work in his organisation as a consultant, assigning various small projects so that I was available on a regular basis for them. So when he asked me to take up this challenge of implementing reengineering, just based on reading the book, I immediately said yes. 

This started my journey into the world of  becoming a specialist in change management initially using Business Process Reengineering (BPR) and later adding other new concepts like Lean Management and Theory of Constraints and adapting them to the individual organisational situations. My focus in all these assignments was to help the organisations implement these concepts and derive benefits from implementing them, rather than give a report and collect my fees like many large consultants were doing at that time. In fact, in many organisations, we came across such consultant reports resting inside the table drawers of top management and, when asked, many of the employees used to say that they were consultants’ ideas, they could not be implemented in their organisation. The classic resistance to change. 

We devised a model in which we insisted that the organisation take ownership for the change management project by forming a cross-functional team both at the senior management levels and operating levels with the CEO acting as the Champion, spearheading the project, while we acted as guide and catalyst for the operating teams to come up with ideas using these concepts. When the team submitted their recommendations, the senior management team, on accepting the ideas, would have to take responsibility for implementing the changes, and we linked our progressive payments to various stages of implementation. 

In the next post onwards, I shall discuss the individual engagements in brief as well as the results we obtained over the next 16 years, at which time I had to decide to hang up my consulting boots due to health reasons. During this period, I also had the benefit of interesting associates who joined me in this journey, making valuable contributions to these assignments. These assignments also gave me enough material to present interesting papers in seminars, and to write case studies to be taught in some prestigious management schools.