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.
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