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— Jamshyd Godrej
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CHANGING MINDSETS:
An Indian Recipe
“From a caterpillar to a butterfly sounds and feels good! From an ugly, black caterpillar to a bright, colourful butterfly — the symbol of fantasy, of love, of good cheer! But imagine what is happening to the caterpillar as it goes through this metamorphosis. First it goes blind. Then its legs fall off. Finally, its body splits open, to allow the beautiful wings to emerge. Think of the fear and the pain it goes through. Which caterpillar, willingly and of its own volition, will sign up for the transformation?”
This is the brilliant metaphor that managerial guru Sumantra Ghoshal uses to describe corporate transformation in his DMA-Escorts award-winning book, Managing Radical Change, written in collaboration with Gita Piramal and Christopher A. Bartlett.
Of all the books on Business Management that I have read in the last few years, Ghoshal’s book interested me most because of its singular relevance to the Indian corporate world. Ghoshal had, when abroad, read about some very successful Indian companies in the business press. But seeing these companies from inside on returning to India was for him a memorable experience: “In interview after interview with Reliance managers I heard the same talks of breathtaking initiative and extraordinary speed.” At Wipro, too, Azim Premji provided a complete counterpoint: “His absolute commitment to a set of values, particularly to complete and total integrity, was as novel in the Indian corporate context as Dhiru Ambani’s sense of ambition and dedication to growth.” Again, in the Thermax house journal, Rohinton Aga wrote: “Honouring a commitment is not a matter of money. It is a matter of culture, of values, of character. If I have made a commitment to do a thing, I take responsibility for it — no delays, no excuses, no alibis. How can we make this an integral part of us?”
Agents of change
In 1994 moving from INSEAD (a French business school) to the London Business
School and observing that for several Indian business families London serves
as the second home, Ghoshal got acquainted with quite a few of them — Dr.
Parvinder Singh of Ranbaxy, Ajay Piramal of Nicholas Piramal, and Rahul
Bajaj, among others. His contacts were further strengthened by annual
encounters with the growing Indian contingent at Davos.
The fundamental premise of Ghoshal’s book is that radical change is possible and, more to the point, senior managers have to grow to believe deep in their hearts that it is possible. For, to become agents of change, they need to change their mindsets. As Jamshyd Godrej, writing about what it takes to become a world-class organisation, put it: “The root of our difficulties is our mindset. We need to change our focus from routine to improvement, from profits to customers and profit, from results to process and results, and from specifications to satisfaction. This is easier said than done. Americans offer a three-day magic potion for change in the mindset. The Japanese have no such magical solution. In my opinion, we have to figure out our own recipe for change.”
Unfortunately, having been brought up in an era of crippling regulations and bureaucratic hurdles during the so-called socialistic pattern adopted by the Government, managers have come to believe that everything in big companies happens slowly and incrementally. Radical change is in fact too radical for them, too unsophisticated and even unIndian. The mindset therefore has to change — radically. “In a deregulated competitive economy,” writes Ghoshal, “driven by the cruel logic of markets, a company that fails to change fast enough can and will die — as is manifest in the slow march to extinction that has already become inevitable for some of India’s great old companies. At the same time, in this
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“Rather than managing through
the abstractions of plans, budgets and controls, top-level managers must
recognise that their key task in building competitive advantage lies in
stimulating the company’s most valuable resource — its people — to be more
motivated, creative and entrepreneurial than the employees of its
competitors.”
— Sumantra Ghoshal
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deregulated market economy, a determined management can transform a company much more quickly and much more effectively than was possible in the past.”
Ghoshal dismisses the pervasive myth that radical change is possible only when a company is in crisis. The strongest evidence to the contrary is the much-written-about case of General Electric’s “formidable” CEO, Jack Welch, who brought about the most radical changes, including the dismissal of over 100,000 workers at a time when the Company’s market capitalisation was $11 million. It is worth noting, though, that Welch, with his counterstrokes, was able to increase it to $450 million! Similarly, in the case of the perennially successful Hindustan Lever, Keki Dadiseth, when he took over, radically decentralised the Company to create small highly entrepreneurial businesses. At that time Hindustan Lever represented 5 per cent of Unilever’s global turnover. Dadiseth’s ambition was to increase the Indian representation to 10 per cent.
Behavioural context
It is generally believed that people’s attitudes acquired over a period of
time do not change easily. On the other hand, reviving businesses requires
revitalising people, i.e. changing people’s set mindsets. Ghoshal argues
that revitalising people is not about changing their fundamental attitudes.
It is about changing the context that managers create around their people:
“Every company has an internal behavioural context that shapes how people
within the company think, feel and act. To change behaviour, that context
has to be changed. The responsibility for creating the behavioural context
lies at the level of senior managers.” He gives the further example of
Ranbaxy. Ranbaxy’s Parvinder Singh once said: “‘We are recruiting well and
take on good people. Somehow our environment does not allow them to remain
good and they become sub-optimized.’ By ‘our environment’, he was referring
to Ranbaxy’s internal behavioural context, and he was emphasizing that
having good people was not enough, a company needs to create the context in
which good people can become the best they can be and perform at the highest
level.”
Ghoshal goes on to define the four characteristics of the normal behavioural context — constraints, when top managers take all the decisions which constrain the people on the shop floor from using their own initiative. The second characteristic is compliance whereby people at the lower level have to abide by all the decisions taken at the higher level. The third pervasive aspect is control exercised by the few at the top over the many below to safeguard against the latter doing anything wrong. The last characteristic is contract whereby relations between colleagues and dependants and divisions assume the nature of binding contracts rather than free exchanges.
As against this, an invigorating internal environment as proposed by Ghoshal is characterised by four very contrasting attitudes. Constraint is transformed into stretch,
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Time is very short, and we must
act now, today, not tomorrow. We must follow the chosen path with religious
fervour, as if it was the be-all and end-all of our very existence. Any
complacency, any attitude of
laissez-faire, any attitude of defeatism, will be suicidal on this
journey.
,
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There were two boys in a
class wearing similar shirts. One boy came up to the other and said, “Same
same”. We are taught to value “same”. Same is good, different is bad. Today
people say that they don’t go to so-and-so’s house. Why? Because they are
different. Different is not so good is the underlying message. We need to
think about that. Being different can be good.
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which means that every individual at whatever level is trying to do more rather than less, continuously pushing himself or herself. The second change is from compliance to discipline ingrained in the day-to-day behaviour of individuals and in all management processes. Thirdly, high performance companies replace control with the norm of support. The perception that bosses exist to control is replaced by the feeling that bosses exist to help them do better, to guide and mentor them and help them give of their best. Lastly, there is a shift from contract to trust. A real feeling of trust that both are part of the same organisation and trust exists as the condition precedent in order to win by their own efforts. Ghoshal gives the example of two companies, Infosys and HDFC, which have been able to create invigorating behavioural contexts within themselves and been able to achieve very high performance levels on the strength of the behaviour of their people.
Fundamental shift
No doubt this requires a fundamental shift in the company’s management
beliefs: “Rather than managing through the abstractions of plans, budgets
and controls, top-level managers must recognise that their key task in
building competitive advantage lies in stimulating the company’s most
valuable resource — its people — to be more motivated, creative and
entrepreneurial than the employees of its competitors. Only when they
liberate and challenge their people to develop and leverage their knowledge,
skills, imagination and courage will they have created a dynamic,
self-renewing company.”
Jamshyd Godrej spoke of finding our own recipe for changing mindsets. The whys and hows of this have been analysed by us in considerable detail in the hope of inducing our senior managers to read Managing Radical Change, which at least suggests a direction for changing mindsets. In an editorial article such as this we can only present a few salient points of Ghoshal’s brilliantly argued thesis. But reading the book will bring to light so many other aspects of managing radical change: the book examines in painstaking detail the complete processes of building an entrepreneurial organisation; it suggests a management system that insists on performance, but ensures complete freedom to managers on how they perform; it divides the three stages of competition into competence for dreams, for resources and competencies, and for existing markets: finally, it aspires to the creation of “shared destiny relationships” (instead of the existing “power-based relationships”) by a company with its workers, built on mutual trust and a commitment to mutual independence and the skills of joint learning and problem solving.
Ghoshal draws attention to the pitfalls when old established companies tend to rest on past laurels, ultimately suffering from the common corporate disease of “satisfactory underperformance”. He dismisses the myth of charismatic leadership as a prerequisite to radical performance. No doubt charisma helps, as in the case of Naval Godrej, but certainly it is not a prerequisite. Ghoshal mentions some market leaders who can scarcely be described as charismatic. He warns against the danger of surface solutions. While suggesting the need to fundamentally rethink their policies for developing and recruiting the best talent, all that really happens in the case of several companies is that “the rhetoric has become sharper and the HR presentations have become fancier”.
Francis Bacon wrote that while some books are to be read and put aside, there are other books that need to be read and re-read, then chewed and digested. Managing Radical Change belongs to the latter category.
B.K. Karanjia
Mantras For Success
CHANGE reproduces excerpts of Executive Director P. D. Lam’s message to employees at the Locks Division Annual Function 2001-2002, details of which had appeared in our last issue. Although this message, when delivered, was meant for the Locks Division, it is appropriate to all Divisions in Godrej.
Friends,
Any occasion which celebrates an achievement, or a success, must be
applauded, but I do not wish that you forget, even for a moment, the
realities in the world around us. Economic compulsions have compelled our
country to open our doors to fierce global competition, and we have on one
hand, the corporate giants of the Western World with their superior
technologies and deep pockets, and on the other hand, China and Asian Tigers
with their “factories of the world”, both of which have brought the war into
our very backyard. In this exacting scenario, can our Locks Division
survive, or shall we, like thousands of Indian companies silently fold up,
and become a part of history?
What must we at Godrej do to ensure that our Locks Business, which has been nurtured for more than a hundred years, continues to survive and grow from strength to strength, irrespective of fierce global competition?
Time is very short, and we must act now, today, not tomorrow. We must follow the chosen path with religious fervour, as if it was the be-all and end-all of our very existence. Any complacency, any attitude of laissez-faire, any attitude of defeatism, will be suicidal on this journey.
What are our mantras?
First, Productivity — Our productivity requires a quantum jump in order to
succeed. Not just productivity on the shop floor, productivity in everything
we do every day. Data shows that on an average, productivity in China is 70
per cent more than in India. If we need to change, we must embrace
productivity with fervour, and leap-frog to those levels which are
internationally acceptable.
Second, Quality — Quality must be our religion in everything we do, however small. Quality is, and must continue to be, the responsibility of each and every man and woman in the Locks Division, for unless our Quality measures up to the best in international standards, no one will be interested in dealing in our products. We must believe in Quality, breathe it, live it, make it a part of our existence. Reputable companies in India and the world have already achieved such standards whereby rejection can be measured in minute numbers of five and six per million, and above all, these Companies continue to strive to improve further. If we do not have a mindset to reach these levels, the battle is lost before we can fire a single shot.
Thirdly, Price — Why should anyone pay us even a rupee more when equivalent goods of high quality are available at acceptable prices? Our prices must be so engineered that we can benchmark to be at least 20 per cent below the best in class, so that with all possible duties, our landed cost in the export market is still competitive. And for this, we need to work together, in teams, and develop unique methods of meeting international price point parameters.
Fourthly, Continuous Improvement and Striving to Excel — Anyone who puts a limit to achievement is a person who has no place in our Organisation. This world is for winners and winners alone, and a winner has no limits. We need improvement in every sphere of activity, be it large or small, every day of our lives. Every time we achieve a benchmark, we must raise the bar, as our limitations are only those we create ourselves. If this concept of continuous improvement is made our credo, we will see the transformation of our factories, we will see the changes within ourselves, and we will experience the sweet smell of success.
Lastly, we must believe in ourselves, our capabilities to do it, and just go out and do it.
My friends, our destiny, the future of our Company, our own future, the future of our children is in our hands. Our success or our failure depends solely on us. Let us not blame the external environment. Companies working in the same environment have succeeded in spite of it. Let me conclude by giving you a message. Shut your eyes, let your mind wander, dream of what we can achieve, the heights we can soar to. Wake up, and have the will to do it. Then go out and do it.
Jai Hind, Jai Godrej
MAKING A DIFFERENCE
Excerpts of a lecture on “Mindsets for Change” by Satish Pradhan, Executive Vice President (Group Human Resources), Tata Sons Ltd., organised by the National Institute of Professional Secretaries.
Secretaries are an extremely critical interface of an organisation and play a vital role in the waves of change in an organisation.
Before making any changes, it is important to assess how we view ourselves — not so much what we are, but what we think and what we feel. Do we wake up in the morning and tell ourselves that we’re something good, God’s gift to mankind? Or, do we say oh, hell, one more day to go through the grind?
Gautam Buddha once said that we are what we think. All that we are, arises out of our thoughts. By our thoughts we make the world. The reality that we are, that we think we are living, is actually a product of how we have thought it out in our minds. We may also think that this world is merely an illusion.
We have to be true to ourselves and then we can look at the world in different ways. We may think that thinking and feeling are different things. A statement such as “I feel that it is a nice dress” means that I feel good about what I say. I think it is because of the dress. But it may also be because of the person who is wearing the dress. We cannot split a thought and a feeling. We do tend to feel something of our thoughts and think something of our feelings at the same time.
The “feeling” switch in our mind determines a lot about our thinking. We have rules for everything. About how to start work, for instance. We do not switch on the printer first. It is always the hard disk, then the monitor and then the printer. We do not go straight to Microsoft Word. We first check our e-mail, respond to it and then work on Word. Some of it is important and useful. But some of it may not be important. We should learn to break pre-fixed rules.
How do we look at the world? Rules say that we are either right or wrong, good or bad, efficient or inefficient. But life is not usually either/or. It is this and that. If the boss criticises the secretary for a letter that she drafted or finds that there is a mistake in the letter, that does not mean that the secretary is bad at her work. There may be a typographical error, but the draft may be good. The content, the timeliness and the visual appearance may be good. So there are all sorts of combinations. The boss need not be happy or angry every time. We are not mortgaged to time as such.
As a result, most of the principles that we have lived by actually become questionable. Why change at all if we are comfortable? It is important to change because what we have done so far may not be enough to keep up with modern times. Things today are radically different. First there was the manual typewriter, then came the electronic typewriter, then Dictaphones, computers: Wordstar, mail merge, MS Office… What happened to stenography? What happened to the basic secretarial skills we were groomed in? The world is changing. Are we ready to take on the challenge as the world moves forward?
A large part of it depends on how we deal with people. The way we look at ourselves and think of ourselves, as well as the way we think of others are very important aspects in changing mindsets. Not just secretaries, even bosses should know how to deal with colleagues. Do the colleagues matter? The bosses may say to colleagues that they don’t do things the way we do. But the boss should put himself in their shoes, be in their position and he will know the difference.
There were two boys in a class wearing similar shirts. One boy came up to the other and said, “Same same”. We are taught to value “same”. Same is good, different is bad. Today people say that they don’t go to so-and-so’s house. Why? Because they are different. Different is not so good is the underlying message. We need to think about that. Being different can be good.
You may have heard the one about the man who was speeding along a narrow country lane in his posh convertible. As he came round a bend, he saw a car with a woman at the wheel coming towards him, swerving from side to side. As he managed to pull out of her way, the woman shouted: “Pig”. Without a moment’s hesitation, he shouted back at her: “Cow”. As he turned round the corner, he actually drove straight into a pig standing in the middle of the road.
If you have a mind that is willing to change, you will hear invitations, opportunities… but if you don’t, all you will hear are threats, accusations and cries of “pig”.
Often, situations at work may seem depressing and bleak. We should try and address such issues. See what inspires us. There is the story of a man named Victor, a Jewish psychologist. He was rounded up during the Holocaust but survived the concentration camp and wrote about it. He was in a place where every minute of survival was an achievement. All he thought about was ways to survive from one day to the next. He dreamt of going back to Vienna. That was what kept him going. He had something bigger than himself that gave him the energy and will to survive.
We should all seek something that is larger than us. That helps us move forward and gives us the energy to keep trying. One of the most remarkable aspects of human nature is the ability to find inspiration in the darkest moments. It is difficult but not impossible. As the saying goes, “I’ll not subject myself to the tyranny of anything other than my own conscience.”
R.A.
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