Painless Transformation
A Case Study Of The Crompton Greaves Turnaround
By Kewal K Nohria
Publishers: Macmillan India Ltd
Price: Rs 250Books on management have deservedly acquired a bad reputation. They offer so many ten-point programmes for prosperity, draw so many utterly fatuous charts, and offer so many ready-to-serve recipes that their practical utility is close to zero. Add to that the fact that the reader has to wade through an impenetrable thicket of jargon, and it is easy to decide that reading books on management is an activity best avoided. This book is the odd exception which proves the rule.
The secret of all good management books, this one included, is that they have one common feature--they relate theories to ground reality. You can tell a book written by a practitioner of the manager's art from one written by a consultant easily--the former is usually far more useful, while at the same time being far less pompous.
Kewal Nohria's Indian background will beespecially useful for managers in this country, since foreign books on management often suffer from the problem that the kind of situations they describe are very far from Indian reality. At the same time, the book is no mere description of what Nohria did--for those seeking to link theory to practice, Nohria's book chronicling his tenure at the helm of Crompton Greaves offers you kaizen, quality circles, business process re-engineering, while at the same time showing the reader how these concepts can be used.
The book tells the story of how Nohria turned Crompton Greaves around, but it's not just another turnaround story. Rejuvenating a company in India has very different connotations from doing the same abroad. You can't fire staff, getting into new products and relationships is a long, excruciatingly slow business, and managing the trade unions and the government is a full-time occupation.
How Nohria managed the transformation painlessly for the workers of Crompton Greaves is the story of this book.The one fact that stands out, and makes this book in a sense unique, is Nohria's roots in the Indian ethos--the Crompton "parivar" sums up his attitude to his company and his workers.
Nohria became the CEO of Crompton Greaves in August 1985. Times were bad for the company. Industry in general, and the electrical industry in particular, was gripped by recession. At Crompton Greaves, productivity had declined, and overstaffing and inflation had resulted in a substantial cost push. Low profits coupled with high investments led to increased interest burden. Sounds very familiar.
The most appealing thing about Nohria's point of view was his faith in human nature. Consider this passage. "In India, we are fond of blaming labour for low productivity. My personal experience shows that we are wrong to do so. For the low levels of labour productivity prevailing in India, 70 per cent is for want of managerial efforts, and 30 per cent because of workmen's attitudes. I keep telling my colleagues that if the per headproductivity in an Indian unit is Rs 2 million lower than that of its foreign counterpart, management accounts for a gap of Rs 1.4 million. This is because of the way we communicate, the sort of equipment, plant layout, and materials we provide."
One anecdote is illustrative. The author says that confronted by a bloated work force, he made what he considered to be an irresistible offer to workmen over 50 years old. He told them to stay home, collect their pay and finally come on their retirement day and collect full retirement benefits. Amazingly, there were no takers for the scheme. When Nohria asked about the reason why nobody accepted the offer, he was told that if the workmen sat at home, people would think they had been laid off, and nobody would respect them any more. The moral of the story is that people don't work for money alone, they work for respect. A corollary to that is the conclusion that "getting work done out of fear is simple, but getting work out of respect is more lasting".
Of course,not all of Nohria's success is due to human relations alone. Technology management, development of goals and vision, the nitty gritty of productivity improvement are all equally important, and have been written about in abundant detail in the book.
But the focus remains on Nohria's commonsense approach. For example, he discouraged writing of internal memos "as they were often meant to build an explanation or a shield to justify an anticipated failure". His anecdote of how Crompton Greaves workers repaired a transformer in less time than the Japanese when an appeal was made to their sense of pride is an example of the sort of attitude domestic industry must have if it is to compete globally. Nohria's book will help teach Indian managers how to achieve that goal.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.