Organisation Culture Transformation In A Fertiliser Company
Till now most of my change management work that I had narrated earlier involved specific processes and part of the organisation around those processes. In this case of Mangalore Chemicals and Fertilizer Ltd, I got an opportunity to work in a company wide change management using concepts adopted from Japanese management techniques. In the process I also learnt new tools which can be used to facilitate organisational transformation.
I had mentioned K S Madhavan when he, as MD of Tecumseh, had hired us to work at their Ballabgarh Unit. Shortly after we ended our assignment, he retired from the company and decided to start a consulting practice under his own name, KS Madhavan and Associates (KSMA) and invited us to join him as his associates. Shortly after that, he informed us that Mangalore Chemicals and Fertilisers (MCF) had approached him to help them in implementing his approach which brought about a major cultural change in Tecumseh’s Hyderabad unit after he took over as its MD. He told us that when he presented the Tecumseh success story in a CII-sponsored seminar, the then MD of MCF, MR D P Mehta, who attended the seminar approached him after hearing his presentation, and sought his help. This was around the middle of 2000 when we were involved with ITCBPL.
KSMA put together a team of five consultants, including me, to work on this assignment.. This was the only assignment I did under the banner of KSMA and it was a great learning experience. One of Madhavan’s strengths was his mastery of Japanese management concepts and Edward De Bono's ideas of Six Thinking Hats and approach to creativity. He had used it in his work life to successfully turn around problem units and one of his major strengths was getting workers to participate actively in organisation transformation. He had in the past used these concepts as a manager where he had worked and this was the first time he had to use the same approach but in the role of a consultant. Since the canvas for this project was large, he wanted to have a team of consultants to assist him.
To understand what we did, a background about MCF is in order. MCF was a unit of the government of Karnataka which was taken over by Mr Vijay Mallya in the early 1990s. It was till then a loss-making unit but after Mallya’s take-over it started turning the corner. Around 2000, the then MD realised that, in order for MCF to fully turn around, they had to go for radical organisation transformation. So when we started our interaction before giving a proposal, Madhavan had insisted that KSMA have to visit the plant and interact with its people across the organisation and also see for ourselves the state of affairs. MCF agreed and arranged for us to visit the unit over 2 days. During our discussions with a crosssection of personnel, and observations we made when we moved around the plant, we noticed major issues emerging:
The plant was badly maintained and the general housekeeping all over the factory was very poor.
All the employees worked in functional silos and they had a high level of interpersonal conflicts and distrust.
They had large amounts of materials lying around everywhere in the factory and every department had many storage shelves overflowing with old files and materials stored and they were even indenting for additional space for storing.
Finally, the workers and labour unions had adversarial relations with the management and, due to various historical reasons, they were exploiting the weak management which had run the organisation before Mallya took over, and they continued the same even after that.
Based on this appraisal, KSMA proposed a four-pronged intervention.
To streamline the use of space and materials and also get everyone involved in managing it, the Japanese tool of 5S was to be practiced by everyone from top management to the bottom-most workers.
To ensure that the plant ran without breakdowns and with most optimum efficiency, Total Productive Maintenance (TPM) was proposed as the second intervention.
To involve everyone across the organisation and to build trust and team-work culture, CFTs would be formed to address various problems which KSMA called as KRAs (Key Result Areas). This was designed more like a Kaizen exercise practised by Japanese management principles.
To involve the workers and get them to participate, Mr Madhavan introduced an innovative approach by getting one of the union leaders from Tecumseh, who had benefited from his approach, to work as a consultant in our team to interact with the workers and get them to come on board for this exercise.
Mr Madhavan and I led the KRAs, Rajan Mahendra, who was one of the other consultants, led the TPM exercise with support from one more consultant and Col Subramanian, who had worked with Mr Madhavan in Tecumseh to implement 5S, led the 5S project with help from the union leader to educate and implement the same with active worker participation.
After conducting the initial round of workshops educating the top management right down to first-line engineers on the concepts and approaches of the above interventions, we got down to the actual work. 5S was taken up as a major initial project involving everyone across the company and, within a month of launching it, the results started showing in terms of organised space and release of unused shelf space and materials. Over the next 6 months, we estimated that they had recovered scrap which could be sold, and useful materials lying unaccounted for in the books, worth a total of Rs 60 lakhs!!!. This by itself was more than the total fee KSMA was charging them for the complete assignment spread over 2 years!!
In order to focus on the real problems for both TPM and KRA, KSMA arranged for a structured exercise and collected a large number of symptoms being touted as problems by everyone. These were grouped into various categories of focused problem statements which became the basis for forming cross-functional teams. We created 12 teams working on various TPM projects across the plants and 20 teams working on the KRAs across the organisation. In the case of TPM, the teams mostly consisted of technical members along with procurement and finance, whereas, in the case of KRA-based problems, other departments were also involved.
While the 5S exercise moved fast and started showing results quickly, the other two interventions took some time to take off. One of them was that, while we spent 3 days a week at the plant guiding the teams on the steps to be followed, they were supposed to work in their respective teams at least 2 hours per day on this project. We found that this did not always happen due to everyday crises or other priorities. Over time, however, we managed to get over this hump and moved on. At the same time, a major labour problem was brewing and we had to intervene in this area also, based on Madhavan’s vast experience in that area and our own insights of ground reality gathered by then of the real issues and how to handle them differently from what they were used to.
The net result was that some of the problems got addressed quickly while some had to wait for the labour trouble to be resolved before progress could be made. But something more interesting started happening, which was the original intention of this assignment. Culture Change. We noticed that, due to working as a team on various problems, the departmental and functional barriers started coming down. We found the team members sharing anecdotes about how they started addressing routine day-to-day problems differently than before.
For example, they had a culture called “AAVI”, short for Avoid All Verbal Instructions. As a result, memos floated around without the actual problem getting addressed. Now the AAVI disappeared since the same people were working together in various CFTs and started addressing such issues quickly across functions.
Similarly, we started getting feedback on many other previously divisive issues getting sorted out quickly. But while this was happening at the lower level, there were still walls between the senior management personnel who were not directly involved in any of the teams. So we came up with a couple of problem areas which had to be addressed by forming teams only among the senior management personnel and that took care of breaking the walls between them.
I was involved in the project between August 2000 for about a year. I believe we achieved one basic goal of this assignment: to bring about culture change and permanent improvements in many of the problem areas. The company also started performing better over a period and eventually MCF was taken over from the UB group by Zuari Fertilisers and Chemicals Ltd, an Adventz group company. From my personal point of view, I learnt a lot of new ideas and concepts from Madhavan on change management and the tools that can be adopted to deal with it, which I could use in my subsequent work with other clients. I also got to know Rajan Mahendra, who was 20 years younger than me, and we started working together in many subsequent assignments with very interesting results. I will share those in my future posts.
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