Consequences of Haphazard Management Systems !

Modern terminologies of management are invented by management academicians who work in management schools located mostly in the United States of America.  They routinely invent new terms and terminologies which are fed to the rest of the world through their research papers and books published year after year. Business media further try their part to popularize these.

Taking cue from these leaders of management from the leading country of the world, other modifications and adaptations of management theories keep flooding the information circuits of the world.

In the days when computers began making an impact in the world, those of us who chanced to interact with those gigantic electronic machines using the human understandable machine codes such as FORTRAN and COBOL, soon learnt a fundamental aspect of modern technology with special regard to computers. In those days we used to refer that as ' rubbish-in-and-rubbish-out' syndrome.

In a similar way rubbish-in-and-rubbish-out situation exists in all facets of information including management.

I am not telling that all that is researched and published in the field of management are rubbish.

A good number of Indian brains have contributed to the development of management 'science'. The popularity of the term 'management guru' to denote an expert academician or writer in management is a living example of the Indian influence in modern management.

The management principles and research discoveries that have been introduced to the world under various nomenclature, idioms and personified theories that got evolved from case studies from big money making businesses gave modern management the aura of a super science or philosophy. Management Gurus in the recent past have become so influential in politics and business that they could sell their theories so effectively to the decision makers of most of the countries.

The most remarkable one being their success in  removing the ceilings on individual service remunerations or simply salaries that existed a couple of decades ago. Now those occupy top slot positions in any organization are deemed as the top management personnel and very high remunerations to them are fully justified. This was not the case in the pre-globalization era !

In the past a public company could not have paid very high salaries to the top management personnel the way they liked. There existed some statutory guidelines limiting the pay and perks.

In India, the post liberalization scene greatly benefited the top management people working in the private sector companies. All of a sudden the promoters appointed themselves to the top management slots and began to draw such high salaries never ever imaginable by the common citizens.

Some top management persons of privatised PSUs also benefitted immensely.

Some PSU managers who migrated to the private sector also benefitted as far as their salaries are concerned.

In no time, the ratio between the lowest paid and the highest paid jumped to the order of thousands from the order of tens that existed before.

The best part of the new policy was that the top management could draw enormous amounts as salaries or 'management fees' to a couple of individuals of the company even when the company made no profits !


This logic perhaps came from the interesting philosophy of management which postulated that there is 'nothing absolutely right or nothing absolutely wrong' which in simple terms meant the non-existence management failure or success !

That meant that companies can go ruined or bankrupt under the able leadership of management experts holding positions like the CXO or CEO and the good fortunes that they had siphoned out as management fees cannot be taken back from them for their management failures. Because in management there is no real failure. The situations are all various facets of management !

With this logic, a company could be set up using a small percentage of promoters' money and a larger portion of public money either as bank loans or equity from mutual funds and in a couple of years time a good part of it could be siphoned out to a few individuals holding the top management posts as their salaries. If the company's business became successful by any chance, very good. If it does not, then also it is very good !

The Management of the company has nothing to lose, either way. The losers are the public. They could be the ordinary employees of the company or the ordinary share holders or the mutual fund investors or even the simple account holders of the banks.

The consequences of such a ridiculous management system without proper checks and balances on management accountability are for every one to see.

All at the same time the policy makers allowed the existence of other sectors with administered restrictions of pay and perks.

Is it not an insane policy where a lesser experienced person holding a top management post in a smaller private company drawing a monthly salary equivalent to the yearly salary of a more experienced person holding a similar post and performing a management task at a much more complex environment only because the latter is in a company bound by certain statutory clauses which prevents the latter to draw a salary equivalent or better than the former ?

Had it been a transitional thing which existed only for a shorter period of time, we could have perhaps ignored it as a systemic fault which is unavoidable. But if such an illogical situation is prolonged for decades then the whole society would have to bear the brunt in one way or the other.

For example in India even after two decades, the economy is still in mixed mode. Earlier India had a mixed economy where private and public enterprises co-existed more or less on a levelled playing field. Certain sectors were reserved for the government and there was no competition in those.

But now again it is a mixed economy where both private and public enterprises co-exist and compete each other, but in an unbalanced playing field. The situation is neither favourable to the private sector  nor to the public sector.

It is such a situation that all management principles and theories that got evolved in the west can be either proved or disproved at any one's choice and convenience.

A situation has now come in India where honest and competent public sector managers do not find it rewarding to aspire for the top management posts. Managing the company well is not the task which need to be accomplished in this sector now. A different kind of expertize is needed for this management which is yet to be defined by the management gurus !

At least in one aspect both private sector and public sector companies are on an equal footing. Failure of the company is no more the failure of the top management team- it is either the fault of the employees or the policies.

Because some how the modern management gurus have not yet defined management failure !

Then what is haphazard management ?

Or why should we bother of the consequences ? 

Observations on the Working Styles of Two Indian Public Sector Chief Executive Officers !

What I am going to narrate here are two episodes that happened during some years ago during my service as an engineer in a large Indian Public Sector Company. The purpose of narrating this is to highlight the importance a Chief Executive Officer in making a difference  to the performance of the business organization. Those who are capable of understanding can very well differentiate the leadership traits that made the difference to the organization on a long term perspective from some apparently negligible actions of theirs.

For obvious reasons, I would not name the persons or the organization.

This may be taken as a real life case study in management !

The company is a large metallurgical process industry (to be more specific, a large integrated steel plant) employing nearly 50,000 people, of which nearly 2500 are qualified engineers. The engineers employed by the company are from various engineering disciplines as far as their educational backgrounds are concerned. The company's recruitment policy is such that it selects fresh engineers from the academic institutions on a pan India basis based on a stringent recruitment process. Such engineers are placed in the technical management cadre of the company. It is from this cadre that the company later draws its Chief Executives and top management personnels.

Though it is a government owned Public Sector Unit (PSU), the promotions and career growth prospects in this company are not similar to the government service. In the Indian government service, seniority is the major determiner in deciding promotions of an officer from a particular cadre. Though the Indian PSUs initially followed the government rules, the career rules in them kept on changing to their convenience when the government began vesting their Boards with more and more autonomy. As such, the Indian PSUs do not have any uniform career policy, except that they follow some mandates from the government in deciding the pay and perks of the employees.

Now let us come back to the two chief executives of this PSU. For convenience let us call them Mr.X and Mr. Y. The former was the Chief Executive Officer (CXO) of the same company more than a decade earlier to the latter. Both of them joined the company as fresh management trainee recruits, Mr X joining the company during its formative years and Mr Y joining the company later during its prime performance years.

Mr. X had his education from a premier national institute while Mr. Y had his engineering education from an institute not of that prominence. Both these gentlemen incidentally hailed from the same Indian state. Linguistically and culturally they had similar backgrounds. Mr. X was a metallurgical engineer while Mr.Y was an electrical engineer. During the initial two decades of their career both worked as first line executives in two major production departments of the same company.

Mr.X had an opportunity to work in another PSU in the General Manager and Director levels for a few years before he was selected and placed as the Chief Executive of his parent company while Mr Y worked in the same company , though he held different responsibilities in a few other departments.

When Mr. X took charge of as the CXO, he came after a gap of nearly a decade and the younger generations of officers never knew him. Most of his batch mates and seniors where now in senior levels in the company holding various positions but subordinate to him. The company just at that time had completed a major expansion plan and was just waiting to get the benefits of the massive production capacity expansion. Unfortunately, many of the new production units were failing to produce in the acceptable levels due to many technical problems of a new kind which the company never faced earlier in the old production units.

For example, the new Steel Melting Shop with latest steel production facilities was not able to sustain its production because of a technical snag on its gas cleaning facility. The latter came up with latest technology and was supplied by a reputed European company. Though the plant had been commissioned, the production of steel could not pick up because the gas cleaning plants would break down so soon. Unless the company produce the crude steel in this department it cannot possibly make the saleable steel in the other production departments! Capital employed by the company in the billions was not making any returns !

The company had trained its operation and maintenance engineers in the new technology by sending scores of them to the foreign countries from where the technology was procured. Besides, the experts from the foreign suppliers and the consultants were all breaking their heads to solve the problem.

But the problem was not getting solved. More and more experts were requisitioned from other countries as well and their suggestions were getting tried one by one. But the problem remained unsolved.

The CXO was spending hours daily in meetings with high level Indian and foreign teams to resolve the technical problem. But nothing was happening.

While the big efforts were on, the CXO did another thing. He devoted some time to discuss the issue with some of his personal friends and earnestly requested them to find any one in his large organization who could be of some help. That informal request from the CXO caused a silent 'people' search within the organization, not necessarily connected with the problem. The effect was that one day, my boss requested me ( a very junior level engineer at that time and not connected in any way to steel production) to visit the new Steel Melting Shop and study the problem independently and suggest some solution if I could.

So, I visited the new shop. I knew none there. There were big actions every where in the huge production shop which was built and commissioned just recently. There were high level 'experts' and engineers from many countries in dynamic activities trying to find out some solution to the problem. Some actions of modifications were going on as suggested by some experts. The plant was not on production mode !

With difficulty, by spending some time in understanding the process and the technology by glaring at the massive pieces of equipment connected by massive pipelines and cables and by discussing with some shop personnel here and there, I studied the problem. I thought about the whole process and the systems with a rational but unbiased mind.

Then it struck me. I found the possible reason for the gas cleaning plant failing frequently ! I could also guess the possible solution ! One of the huge pipes was getting chocked with a rock like formation which was not prone to conventional cleaning within days the plant is put to service. And the chocking location was different every time.

The solution what I found involved replacing a length of pipe of the gas cleaning plant with a smaller diameter pipe. But my predicament was that an external expert agency had also identified the problem to the same pipe and they had recommended for going for a higher size pipe. In fact one higher size replacement had been tried without any positive result and the same agency had suggested for a still higher size and work was in progress for effecting this new replacement. My technical logic on the other hand , involved changing the pipe to a much lower size than was originally designed by the foreign technology supplier.

When I told this to my boss, he discouraged me. He even challenged my knowledge and experience. How can an young Indian engineer could possibly solve such a 'big' problem so easily, that so many teams of foreign experts could not do so far ?

That was his simple logic !

But perhaps due to some other reasons he somehow decided to forward my suggestion note to higher ups. As the problem was so serious to the company, my suggestion somehow reached the Mr.X, the then CXO, who instead of throwing it to the dust bin, instructed the next in command to personally discuss the matter with me and proceed to implement it if I was found confident !

Soon, the big bosses of the company came to meet me. Some were apprehensive, but some others were willing to buy my suggestion. Soon the CXO took the decision in my favour and ordered to implement my suggestion under my guidance. The ongoing work (implementing the suggestion of the external expert agency) was stopped and the work as suggested by me was taken up, instead.

The work got completed and the plant was started. Though there was an apprehension from many people that the gas cleaning plant would fail in the first attempt itself due to the drastic change from its initial design, they proved wrong. 

The problem was solved for ever and soon the new shop began producing steel and production picked up momentum soon after. This one success catapulted my reputation as an engineer and soon I was recognized by the CXO and the top management team as an expert of the organization who could be consulted for other problems as well.

Years later, Mr. Y became the CXO. We knew each other personally. The same company  was in peak production when he took charge as the Chief. But now the issue was maintaining the plant in that performance levels. The equipment and the people are to be kept in top form ! Unlike the former CXO, this individual was a popular figure and he had personal touch with many junior and senior level engineers and officers of the company before he was elevated to the top post.

But when he became the CXO, he decided it the best for him to keep aloof from all. Perhaps he thought that would be the best policy to maintain his 'gravity' as the Chief !

He created a large CXO Secretariat filled with a large team of officers to assist him. No one was normally allowed to meet the CXO, unless approved by his Secretariat.

He was a person in regular talking terms with me before he got elevated to the top positions. He was  from a management trainee batch a couple of years senior to mine. But professionally we belonged to a different technical discipline. But he knew about me and the areas where I was considered in the company as an expert for the past many years.

When he took charge as the CXO, a major plan was going on to modernize a major production facility of the company for crude iron making with massive investments. This  involved some major changes in the technology which were proposed by some external consultants and suppliers.

While the plans were discussed at the CXO level, Mr.Y felt that one the new technologies which was being proposed need to be checked up for its suitability by me, as he knew vaguely the experience and expertize that I had in this field. Perhaps he asked some one in his Secretariat to get me involved but they did not do it that time. His management style had somehow made his Secretariat capable of deciding what the Chief should see and decide !

Sometime later, when we met accidentally in another forum, he tried hard to discuss the matter with me, but he could not spell out the technical issue properly as was not able to recollect it fully.

The plans of modernization went ahead and got implemented and the some commissioning bottlenecks were experienced for the newly modernized facility. Again  in some other top decision making forums Mr Y desired that I should be called and my opinion should be taken before one of the new systems which came up as a new modification is actually put to use. This time perhaps he desired it because of the difficulties felt in getting this new facility commissioned together with the larger production facility that got renovated. Again none actually took him serious, though I was informally informed of this development by another top officer of the company who is privy to the high level meetings chaired by Mr.Y.

I was not involved in the said project in any way. Yet, I felt that this was some thing important and I should have a look in to it for the greater interest of my company. So, I studied the whole issue independently and found that the new facility which was going to be incorporated was to create a greater technical problem later, seriously affecting the plant life and productivity. Technically, the new system which was going to be installed was not at all required and if incorporated as such was going to cause a major bottleneck after some time, instead of having the benefits as envisaged.

So, I met the top officer who communicated the issue to me and informed him of the consequences the company would have and gave my technical advice of not incorporating this new system. But this officer informed me that it was such an issue that he would not be in a position to inform Mr Y. He advised me to meet the Chief Executive, if possible. So I made attempts to meet him, but his Secretariat denied me permission by citing various reasons of pre-occupation and busy schedules of Mr.Y. It is to be remembered that they knew our previous relations and about the desire that he expressed to get my technical views.

Then the last thing left to me was sending a direct message to him. I did that too, hoping that the persons in his Secretariat would judge that an important one and bring that to his notice.

Apparently that did not happen. Shortly, the new facility was commissioned. I remember telling a few of my colleagues about the blunder made and the possible failure of the production facility in the near future.

It happened the way I thought. The iron making facility which was renovated by spending huge amounts have been spending millions again and again to off set the problems that kept developing. Major investments are being done and productivity is affected adversely. The facility which was created to produce crude iron trouble free for at least a couple of future decades is failing every now and then. Much money and efforts are spent to keep it running with frequent shut downs and  repairs.

During the short period of about two years as the CXO, many apparently invisible acts of Mr.X made the company fare very well in the next many years. His acts had a long term positive effect. I have knowledge of many such things and in a few other cases also I was personally involved.

Mr.Y remained in the seat of the CXO for nearly four years. He got a good working company to manage. But the way he performed his function as the chief executive mostly caused long term negative impact on the company. Though he had left the position, his style of management had set in a negative slide for the company.

What was the personality trait that made it possible for Mr.X to effect a better future for the company?

What was the personality trait of Mr.Y that caused the company to slide down ?

How to Kill a Successful Organization ?

Don't ask me why I selected a title like this for this blog. Some of you are familiar with famous book titles like 'the games people play'. Knowingly or unknowingly people also play 'games' aiming at killing or destroying successful organizations.

Organizations are well knit networks of people for accomplishing some defined tasks or objectives in a defined framework of rules or bylaws. There are governmental organizations and non-governmental organizations, business organizations and non-business organizations, charity and non-charity organizations, professional and non-professional organizations, registered and non-registered organizations, etc., etc.

Our governments function through various kinds of organizations. Businesses are carried out through organizations called companies or firms. In short every individual now-a-days is associated with one or more kinds of organizations. Even your family is one kind of organization, perhaps a smaller version of it.

If you are an employed person you belong to an organization which employs you and you work within the organization to earn your livelihood.

So government departments, companies, societies, trusts, partnership firms, institutions, professional bodies, etc are all organizations.

Organizations are for the collective benefit of the individuals of the society or the nation. But unfortunately, organizations which do destructive, anti-social or illegal activities also exist. But for the purpose of this discussion I do not include the latter here.

I want to discuss only about those organizations which are set up for objectives which are legally approved , socially acceptable and for the common good of both the individuals within the organization and outside it.

I consider such an organization successful if it is fulfilling its objectives reasonably well for quite some time and has made a visible presence in the society by their collective efforts.

If the public and those members or individuals connected to the organization generally perceive the organization as good, then the organization can be deemed as successful.

Just as individuals, organizations also has a birth, a childhood, an adult hood, periods of sickness and old age and even death.

Unlike individuals whose life expectancy is determined by natural law and cannot exceed certain maximum, organizations can be kept alive and healthy for longer periods by some techniques known as 'good organizational management'.

If the head is the main organ of an individual, the head of the organization is perhaps the most important member of an organization. He or she is called the Chief Executive Officer (CXO) of the organization.

Just as a brain dead individual can be kept alive for some time, a headless organization also can be kept alive for some time without performing.

Just as individuals have parents, organizations also have parents, some one who takes initiatives in creating it. But once an organization gets created and gets a good CXO and survives its infancy period, it is normally capable of surviving provided its CXO functions well.

Unlike individuals, organizations are capable of replacing its heads by itself or by adopting self sustainable techniques devised for its survival.

However big or strong an organization, its strength and weakness both lies with its CXO. Interestingly, this CXO has to be an individual. Experiments to have a sub organization as a CXO have been found not so successful.

Just as successful individuals have other individuals as their envious enemies, successful organizations also can get such kind of enemies who try to destroy it or weaken it from time to time. This is the threat to any organization.

Even individuals who grudge an  enmity or envy can pose a threat to an organization. Even individual members of an organization sometimes become intellectually or mentally sick posing an internal threat to an organization's existence.

Though normally, such periodical threats and attacks are overcome by an organization which is run by an efficient  CXO. Organizations where good systems and practices are in place also can resist such attacks for quite some time.

But clever enemies who are determined to destroy an organization knows the trick to accomplish their task. They know that the CXO is their trump card. What they normally do is to get a characterless and incompetent person selected and installed as the CXO of the organization.

They know very well that an incompetent driver, pilot or captain can very easily drive the truck, plane or ship to destruction very easily.

And exactly that is how the enemies, both internal and external, of an organization try to destroy a successful organization.

First get a pliable, not so experienced or competent individual, project him as great and then install him as the CXO of that very successful organization as its CXO.

Occasionally some organization parents, out of sheer love and affection to some individuals, allow them to direct the organization, just as some wealthy kids are allowed to drive the expensive car by their parents before they get the driving license, to the eventuality of an accident later.

In either case, one thing is sure. If the CXO of the organization is an incompetent and characterless person, the organization will definitely suffer seriously. But the effects may not be visible immediately always !

Leadership by efficient, competent and honest individuals is the key to success for any organization.