Leadership for Competitiveness

Whether India gains international competitiveness depends more on the actions of individual companies than on anything that the government or society can do at large.  The mission of each firm is, quite simply put, to become the high-quality/low-cost producer in the industry or market.

For firms that are already facing substantial foreign competition, there is really no choice.  They must change or die - or rest content to become, if they are lucky, marketing agents or distributors for foreign producers.  For domestic firms that have not yet felt the bite of overseas competition, there is only a little more leeway – they have a bit more time before foreigners enter or before domestic competitors adopt the new quality agenda.

Becoming the high-quality/low-cost producer in any industry requires three actions.  Top management, as a team, must take a leadership role.  They must develop a strategic quality plan and define their personal roles. 

A visit to the ITC (Packaging and Printing Division) in Chennai will amplify how collective leadership works.  The overall leadership of R Srinivasan, in his capacity as CEO, is a benchmark for organizations that recognize change as the only constant factor and believe that leadership can be shared.  From strategic planning to tactical planning to operational planning……… individual ownership and roles have been defined.  The result is a quantum jump in organizational performance: better quality at lower costs.

The second action must be a massive preparation of the entire company.  Management must decide what quality technology – knowledge, skills and tools – their people need and make sure they get them.  The training must include problem-identification/problem-solving skills that provide the foundation for continuous quality improvement.  The firm’s quality training program must also include interpersonal skills and tools that facilitate and accelerate the process of team formation and team problem solving.  This training must include the basics of strategic quality management for all managers throughout the company: quality planning, quality control and quality improvement. 

The Aditya Birla Group has consolidated all it's cement business under Grasim Industries Limited.  The responsibility of O P Puranmalka, who heads the marketing operations of the cement business, is to create a common identity for five brands.  His mission is to create brand equity in terms of quality while satisfying the shareholders with lower costs. Towards this end the leader has organized a massive preparation exercise for the marketing operations.  The training extends from marketing knowledge, skills and tools, to quality management and systems, company wide.  A Herculean endeavour involving a focused quality agenda, as well as, skills for mature inter-dependence.

The third action is to actually "do" something.  Managers must select several bellwether projects and get them done, and participate in the process.  The problems selected should be generic, chronic and tractable.  Quality  improvement  progresses one step at a time.  As major problems are solved, and the results tracked and publicized, the cost reductions, quality improvements and market gains become impressive. Examples of bellwether projects abound.

For instance, Swaraj Foundry Division, is the backbone of all units of the Swaraj Group that includes the blue chips Punjab Tractors and Swaraj Engines.  The division is a supplier of automotive castings.  Since electricity is one of the major inputs for a foundry, it became the focus for a bellwether project at the division.  The area of concern selected the team: cross-functional senior managers.  A structured problem solving methodology was adopted by the team to reduce electricity consumption by 25 per cent.  The first step of this methodology required identification of the vital few equipment that consumed much of the total electricity input.  Consequently, compressors and heaters were identified as public enemies number one and two.  Diagnostic studies on the shopfloor revealed that some heaters were redundant at select locations, whereas, most were being used even during unproductive hours.  In regard to compressors, the remedial actions were primarily preventive maintenance driven.  Further, in several areas, compressors of lower ratings replaced the inefficient ones.  The impact was significant on total electricity savings.  The division has saved, cumulatively, about Rs 100 lakhs over the past five years.  The annual savings from this project will continue permanently.

The bellwether project was diagnosed and remedied by the employees.  Ownership for holding the gains was natural.  The wallpapers in the division celebrated the success.  The team earned a place in the quality history of the division as more and more managers volunteered to invest time in solving vital chronic problems.  The subsequent bottom-line results and market gains at Swaraj have indeed been impressive.

Similarly, the top management of Marico Industries identified reduction in oil smear on 200 ml plastic bottles as their bellwether project.  Parachute coconut oil is used by millions of consumers across India.  Oil smear on the 200 ml plastic bottles projected a poor image to the customers.  The incidence of oil smear was, at the early part of this decade, as high as 80 per cent.  The project team reduced this incidence to single digit per cent over a six-month period.  Apart from the actual money saved, the product image improved.  Further, the organization overcame the attitude – “oil smear is not a defect”.