Chambers of change

Veeshal Bakshi

For national confederations of industry and commerce, it is the R-word that is operative now. Propelled by the changing needs of its members, increased competition amongst the chambers to get a larger share of the industry pie and the gradual recognition that one industry association alone cannot be everything to everyone in the Indian industry, today the Confederation of Indian Industry (CII), Federation of Indian Chambers and Commerce (Ficci) and The Associated Chambers of Commerce and Industry (Assocham) have embarked on major exercises of restructuring, repositioning and renewing themselves.

In fact, all of them are possibly going through the biggest transformations ever, which will change the very nature of how they function, what they will do in the new millenium and even completely change their very profile.

The major trigger for these tectonic changes within the industry associations have been the very changes that Indian industry itself has undergone. Economic reforms have not only changed the way businesses are run in India, but they have even transformed the manner in which apex industry bodies approach their role. With the need and nature of interaction with the government changing, industry bodies are today chanting a new mantra.

Indeed, the government itself seems to have realised the need to de-politicise the equations between the chambers and bring down the degree of one-upmanship that has been the rule. For example, the government recently took a broad policy line that the Prime Minister’s attendance at the annual general meetings (AGMs) of the chambers would be on a rotational basis.

Changes have been slowly but surely happening on other fronts too. If, traditionally, the national chambers have been clusters of largely Indian business groups, today, increasingly, multinationals are playing a key role within. All the three chambers have transnational corporate members who play key roles —- a far cry from just a few years ago.
The role, scope and functioning of all these industry associations will get highlighted this month with the CII hosting the annual India Economic Summit in New Delhi and Ficci and Assocham slated to have their AGMs. India Inc takes a close look at how the major churning and transformation that is going on within the chambers will, in turn, have a long term impact on Indian industry itself.

Restructuring
In recent times, the Confederation of Indian Industry (annual budget Rs 110 crore in 2000-01) hired management consultants BCG India to restructure the organisation. A little earlier, Accenture was brought in at Ficci to suggest major organisational changes. Says CII director general Tarun Das, “ As any organisation that has expanded and widened its horizons considerably, we do understand that there is a need for an objective analysis of our performance from an outsider’s perspective.” Adds CII deputy director general Ajay Khanna, “ Each time the economic environment changed, we have also changed.” The CII restructuring involves BCG India relooking at its existing businesses and organising new focus areas for its members like healthcare, retailing, entertainment, biotech and logistics.

To effect the changes, a total of eight groups have been formed. Four groups are looking at external and four groups at internal factors. The external review will involve a relook at CII services, public policy and advocacy, role of SMEs in the new environment. But possibly the biggest focus of change has been the setting up of CII International that is expected to help transform a national association to one with a global focus which will help Indian industry reach its global aspirations.

Towards this end, today CII has not merely 30 offices within the country but a significant presence outside with nine offices overseas in Australia, Austria, France, Hungary, Israel, Singapore, South Africa, the UK and the USA. While the office in Hong Kong will become operational shortly, it also has institutional partnerships with 191 industry organisations in 92 countries. Adds CII’s Das, “ The one big difference that we would like to see over the next decade would be in terms of our international presence.”

Ficci on other hand has also deliberately changed its organisational profile. Today, its total staff strength has burgeoned to around 300 including 120 officers. Over the years, the dependence on subscription has come down substantially from around 95 per cent to around 25 per cent. The lion’s share of its revenues are generated by its divisions through fee-based income and events. On the other hand, the restructuring at Assocham has actually involved downsizing. It has cut down staff strength from 70 to 50. Old hands are out and new people have been inducted. Increasingly, professionals are being hired. All this has made Assocham a much leaner organisation.

“We have got rid of the deadwood but restructuring an organisation and changing its work culture takes time,” says its secretary general Jayant Bhuyan.

Repositioning
One of the key aspects of the era of perestroika at the national industry associations is the conscious strategy of each to carve out its special niche, so that they do not tread on the others’ toes as they used to in the past. Clearly, there is an effort to focus on core competence.

Take Ficci (annual budget Rs 20 crore in 2000-01) which has taken some decisive steps to reorient itself.” The only way we can do this is by creating a service structure to provide service to our members,” says Ficci secretary general Amit Mitra. He attributes Ficci’s current influence in the government to quality input based on thorough research which the organisation gives to policy makers. Ficci’s online Bisnet service has been identified as the platform which will provide service to its members. “Our whole range which is servicing industry in the new milieu is focused on providing information on internal and external factors,” says Dr Mitra.

Ever since he took charge of Ficci in 1996 after giving up the job of a professor in a US university, Dr Mitra has steered the organisation towards research and strengthened it by consistently adding human capital. “ Today, 43 people who have studied at the Delhi School of Economics work full-time with Ficci,” adds Dr Mitra.

Ficci says the new frontier in business will be intellectual property rights. Ficci has created a special research cell which produced a four-part investment study. Says Dr Mitra, “My vision is clearly aimed at making Ficci an intellectual industry association which specialises in research”, but he is not oblivious to the importance of money. Dr Mitra has pushed Ficci’s budget to around Rs 20 crore per annum, nearly a seven-fold rise from the Rs 3 crore budget of 1996.

On other hand, CII has perhaps taken the most elaborate initiatives in the field of quality. It has already set up CII Institute of Quality in Bangalore sponsored by ABB Ltd. Others centres are being set up in Kolkata, Mumbai and New Delhi to provide world class training and human resource development to Indian industry and other sectors of the economy.

Today eighty per cent of CII’s revenues comes from organising mega events. “We earn this revenue. It is not subscription and if we did not organise mega-events professionally, we would not have been getting this revenue,” says CII’s Mr Khanna. Subscriptions contribute only 10 per cent while seminars and conference contribute another 10 per cent.

Assocham (annual budget Rs 5 crore), considered a distant third behind CII and Ficci, is also trying to carve a new niche for itself. Its secretary general, Jayant Bhuyan, who spent over 20 years at CII, is forthright and candid. “When I joined Assocham I said, CII is a leader in both money and visibility. Ficci is a poor second in many fields, but very strong in certain areas and even better than CII in some. So we said: let us be a good third and look at areas which are niche areas.”

Further, Assocham’s focus of activities has also been shifting towards the states. Mr Bhuyan says other different things that Assocham has done involve state governments in promoting tourism. It did a major seminar with Andhra Pradesh chief minister Chandrababu Naidu in August last year. Rajasthan chief minister Ashok Gehlot too has responded positively, agreeing to work closely with Assocham on tourism. Assocham wants to play within its limits but to maximise its strengths. “We have decided to build on our strengths,” Mr Bhuyan says.

Rejuvenation
At another level, all three industry associations are going through major changes in their profile. For one, there is a generational change that is happening in Indian industry. The old stalwarts of Indian industry who held sway like L M Thapar at Assocham and B M Munjal in CII have given way to the younger generation from the same business groups. That also reflects why CII’s Young Business Council is a very active and emerging focus group within CII, much like the forum Global Business Leaders for Tomorrow at the World Economic Forum.

Secondly, increasingly corporates are opting for cross-chamber memberships. Corporates like Ballarpur, the RPG group and Reliance Industries have taken roles in various industry associations simultaneously rather than confining themselves to just one, as in the past.

Thirdly, at the organisational level there is a deliberate process of succession planning and a process of inducting professionals that is happening with the chambers. This has been deliberately cultivated at CII for example. CII currently has a very strong second and third line of leadership. This is a mix of people who have grown with the organisation over the past 20 to 30 years and new inductions. The sectoral, divisional and functional heads in CII operate in their own areas as strategic business units. Says CII’s Mr Das, “ The process of grooming to take over the mantle of the director general has been on for several years.”

Major changes have been effected at Assocham too. Mr Bhuyan, who has been at Assocham for nearly two years now, says the organisation neglected its members in the past, especially the member regional chambers.

Need to leave behind the past
Despite all the major changes that have been happening, none of the three chambers has been able to outgrow their rivalry. For example, CII and Ficci still cross swords over various issues. The most recent brush was at the India-EU Summit which was organised jointly by CII and Ficci under instructions from the government.

“ CII is a corporation which makes money and hypes up its activities. I want appropriate hype but based on cutting-edge technology,” says Dr Mitra.

Says CII’s Mr Khanna, “We are an industry association with direct membership of 4200 corporates. Ficci and Assocham are chambers whose basic constituency is city and regional chambers.” Mr Bhuyan argues that one reason why Assocham continues to have a high brand value in the government is due to its balanced approach to all issues.

Clearly, even as major changes are under way, there is still need to emerge from the past. Unless they do that, the three associations will find that the best efforts will not bear fruit.

—Additional inputs by Sanjay Sardana