Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

16 AUG 1984

To:

Dear Friends                 

'SCALA - MOBILE ESCALATOR'

In Brazil they call it "indexation"

In America they call it COLA,  (cost of Living Adjustment)

In Italy they call it Scala-Mobile Escalator.

 In India we call it D.A.  (Dearness Allowance)

But everywhere,  it means  the same  thing to  the employees. Whenever  inflation pushes  up  prices  in  the  market,  some index  published  by  the  Government  will  also  rise.   (In India, we call it Consumer Price index-C.P.I).

Whenever C.P.I, goes up, D.A.  goes up, putting more money in the hands of an employee.

The  idea is that  even though  the prices may  have gone  up, with  the  extra  D.A.  in  his  hands,  he  can  continue  to purchase the same quantity  of articles as before.

Rising prices raise the cost of living.

So the experts  thought, "Let us put  more money in the  hands of  an employee-to   take care  of  the  rising  prices  -  to neutralise the cost-of-living rise."

Fine idea!

In fact, originally this is an Indian ideal

We, in India, introduced it 40 years ago.

Americans and Italians introduced it only a few years ago.

Italians call  it "Scala-mobile escalator".   Seems like  they borrowed the  idea  from—our—own—escalator-culture  (remember Bakul Tripathi?).

Except that they  seem to have discovered  something within 5 years  (1979-1984) which we have  still not  discovered after 40 years!  Or do not wish to discover.'

And that is,

Everytime D.A. goes up, cost of production also goes up .'

And if  cost-of-production goes up,  selling-prices must also go up.   (We were forced to  raise the selling  prices of our Switchgear Standard products a few days ago).

If we do  not raise our selling prices,  our profits will  go down.

But  nobody   likes  profits   to  go  down   -  neither   the shareholders nor the employees.

So  what is  the problem  ?   Just keep  raising  the selling prices, whenever costs go up.

But the Italians are thinking.

"No that won't  work.  If we  wish to  sell fertilizer plants in India, our  selling prices must be  lower than the selling prices of the  Japanese manufacturers  (who last month gave a YEN 6 billion  loan to India, to buy  a fertilizer plant from Japan) and our  selling-prices must be lower than those of an Indian company  called L&T.  But we cannot force L&T to raise its selling  prices.   All that  we can do  is  to reduce  our costs, by slowing  down the scala-mobile escalator.—Down with D.A. !"

If our Mr. V.G.  Desai (Divisional Manager  - Chemical Divn.) could hear the  Italians thinking, he would  jump-up and say, "very dangerous thinking!"

He means  "dangerous" for us - for  L&T!  (VGD, let me  assure you, has  no love  lost for  the Italian  workmen'.) And  with all  the  affection he  has  for our  own employees  he  keeps gazing at the following chart.

     

And he wonders,-  how  the Italians  (even Japanese) would  love to  get a copy of this chart ?

Does  Indian  Industry  have  the  "Italian Option"   (of stopping or slowing down the D.A.) ? If not,

3. Can   people   of   Powai,   possibly   increase   their productivity quickly enough  to neutralize the following increases in the wages ?

		Increase/ Employee Rs ./Month
A.	Jan. 1979 Settlement   (Average)	200
B.	D.A. Increase (Jan. 1979-July 1984)	475 to 1114
C.	Apri1 1984 Settlement (Average)	550
TOTAL		1225 to 1864

How shall we respond to these questions ?

H.C. PAREKH

PULL TOGETHER TO SURVIVE

Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

7 Aug 1984

To:

Dear Friends                  

PULL TOGETHER TO SURVIVE

In  the following  article you  will read  about the  10  best factories of America.

Somewhere in  this article, the  above mentioned words  ("pull together  to  survive"-) appear.  I  think  this is  the  main message  of this  article  - and  for all  of us  in Powai,  a badly-needed message.

Can you  locate these  words ?   If you can,  write to  me and tell me the paragraph  in which these appear.

Do you think there  are other messages in this article  which, we, in Powai,  ought to follow ?   Please send me before  30th August   1984,  a  200-word  write-up   (English,  Hindi,   or Marathi) on what,  according to you, are the messages and  how we can adopt the same in Powai.

The  best write-up  will be  published  in Powai  pageant.   I thought of announcing  a cash prize of  Rs.200/- for the  best write-up.  Then,  when I looked  at the following  tabulation, I  realized  that an  L&T  employee cannot  be  motivated  any longer with a prize of Rs.200/-  !!

MONTHLY PAY PACKET
GRADE	Min.	Max.	GRADE	Min	Max
	Rs/month	Rs/month		Rs/month	Rs/month
US	1619	2368	TA I	2792	3605
SSB	1624	2589	H.V. Driver	1893	3108
SSA	1637	2909	Clerk III	2211	3654
SB	1892	3144	Clerk I	3122	3978
SA	2134	3342	Steno B	2511	3679
HS	2553	3552	Sr. Steno	3432	3978

(Monthly pay packet excludes bonus and ex-gratia)

From the following  article, can you  find out what motivates American  employees  (all employees)  ?  - and  will  it work equally well in India ?

H.C. PAREKH

ESCALATOR - CULTURE

Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

16 July 1984

To:

Dear Friends

ESCALATOR - CULTURE

A few days back I was going through the shops and talking to the Shop-Representatives and the Shop-Supervisors about the pressing need to raise the productivity.

"Let us all work harder - and smarter", I was telling them.

At one shop, the Unit Manager proudly introduced to me the Shop-Representitive  and added,  "This shop  has  an enviable record of  improving the labour-productivity,  both after the 1979 Agreement  and the  1984 Agreement.  On  both occasions, the workmen have exceeded their productivity-targets".

I heartily congratulated the Shop-Representative for such an exemplary  performance.  I  said  I  was very  happy  to hear about this.

It was the Shop-Representative's turn to say something.

He said,                                            “but we are very unhappy".

When I composed myself, I asked.

"What for ?"

He said, "We are not getting promotion to a higher grade".

I did  not argue much  (shop-floor is  not an ideal  place to argue), but  I asked him to  carefully study  the "job classifications" which  have been  recently revised under  the new Agreement.

Whether  the workmen of  that shop  (or for  that matter,  any worker  anywhere in  Powai), deserve  to  be promoted  to  the next higher grade depends upon three  things:

1.  Whether a higher grade exists  in that particular "trade/ job", in a given area.

2.  Whether a particular worker  has already acquired sufficient proficiency  in  the specific  "skills/capabilities"     described in the job-classification of that higher grade.

3.  Whether,  in his  shop,  there is  so  much  work of  the     higher classification that, for atleast  6 hours out of 8     hours, he can be expected  to be doing such higher classification work.

Higher productivity  (doing more  in less time)  must not  be confused with higher "skills".

Everybody  is  capable  of  giving higher  productivity.   to produce  more   (in  less   time)  is  not   merely  a  moral responsibility  of all  who are  beneficiaries of  the recent Settlement.  It is equally  a matter of saving our jobs - our very existence as a company.

On the other   hand everyone is not  capable to acquire higher skills and  very often, higher  "skills" are  just not needed to perform certain tasks.   So the "grade" simply has to stop there.

Unfortunately, some  of us do not  understand this difference whereas some others  do not WANT to understand'.  If you have any doubt  about my  statement, please  read-on the following article of Bakul Tripathi.

Whether as an  individual or as a company,  if we want to get ahead of others, let us get rid of the "mental escalators!

H.C. PAREKH

Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

5 July 1984

To:

Dear Colleague

The Secrets of Success

The  following  article  by Jayant  Dubashi   (India Today  -30/6/84)  is based on  a book  - "In  Search of  Excellence -Lessons  from America's  best  run companies".   The book  is currently on the 'Best-seller' list.

When  Dr.   D.F.  Pereira  (DGM-HRD)  made   an  audio-visual presentation about this  book to a small group  of managers a few  months back,  I immediately  resolved that  I  must read this  book.   And  as  if  to  tempt  my  resolve,  a  friend returning from U.S.A. gifted a copy to me.

But I am  not one to be  so easily tempted! I prompty  "lent" it to one  of our Vice-Presidents  - who  saw it on  my table and must have felt  tempted.  I know he has a better  resolve than mine.

But when  I heard about this article  in Indian Today,  I not only managed to borrow a copy,  I spent a few minutes reading it and some more minutes thinking  about its relevance to L&T to-day.

The  article   speaks  about  eight  basic   practices  which characterise   the    successfully   managed    companies (apparently  "reading books on management"  does not  seem to be one of them!) - in U.S.A.

Are these universal characteristics? and if so, are  these to be found in the best managed Indian companies?

In the absence  of an Indian study, we do not  know for sure. And although,  Mr. Dubashi has  raised many questions  about the   Indian  companies   (L&T  included),  these   are  left unanswered.

I do not think we, at L&T, need to wait for an  Indian study, I don't think we even need to conduct an in-company study.

But  I  do  think  we  need  a  lot  of  soul-searching.   We certainly need to examine our ways of doing things.

My personal belief is that:

All the  problems of  the world  are known  - almost  all the solutions are  also known.   Only unknown  (undiscovered) are the persons  capable, willing  and motivated  to try  out the known solutions.

Can we, within each one of us discover that person?

H.C. PAREKH 

AHI-RAVANA/MAHI-RAVANA

Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

4 July 1984

To:

Dear Friends                 

AHI-RAVANA/MAHI-RAVANA

In my last-note  to you, I talked about  the " Enemy -from-Out -side" viz. the Competition.

Today  I wish to  speak about a  more dangerous  enemy  - "The Enemy  Within".   This enemy is  "indiscipline  and  inefficiency" .—

What makes  this enemy deadly is that  most of the time it  is "invisible".  It  is hidden deep-down inside each one of us  -like cancer.  And  you cannot fight  too well something which you cannot see.   And more so if you do not WISH TO SEE'. ? ! ?

So this  enemy has a  ready-made friend  in each one  of us -ready to hide it, ready to protect it.

And it has deceived many  of us into believing that it is our friend.

That is what  makes it more deadly  - an enemy disguised as  a friend !

This is what  Coal India Chairman, Mr.  Gujral found out  (see the story given below).

To know how  Mr. Gujral went  about searching for  this enemy and how he  managed to  chop-off the nails  and teeth  of the enemy, when and where he found them, please read this story.

Mr.  Gujral will  be the  first one  to admit  that  enemy of Indiscipline and  Inefficiency, is far  from finished,  it is quite capable of  growing new nails  and teeth'. Remember the story  of Ahi-Ravana  and Mahi-Ravana  from Ramayana  ?  From every  drop of their  blood was  born a  new Ahi-Ravana/Mahi-Ravana. In modern  times, we  call them  "indiscipline" and "inefficiency" !

In case  you do  not know  (and wish  to know)  how Lord Rama ultimately killed  these demons,  please do write  to me.  On the other hand,  I am eager to learn from you how to  'tackle' the modern Ahi/Mahi Ravanas.  So please do write to me.

As far as our own  situation at Powai is concerned, the demon may SEEM tiny when compared with the Coal India demon.

But let  us remember that  demon is a  demon -  no matter how tiny.  And one of  its magic abilities is to appear tiny - to deceive  us  in  looking  at  it  from  the wrong  end  of  a binocular.  No wonder, to  most of us in Powai, it appears so small and so far - almost a harmless insect!

Let us face it.

Indiscipline and  Inefficiency are never very far  - they are all the time lurking around us.

And their  small size  is a small  consolation!.' A microscopic virus can kill an element.

So the message is clear. Kill the demon, before it kills you!!

And the  message is not meant  for any  particular section of employees.  Here  there is no question  of any one trying to teach a  "lesson" to anybody else.   The enemy resides inside each  one of  us.   So let  us pick-out  our  own Ahi—Ravana/ Mahi-Ravana and engage it in a hand-to-hand fight !!

A never ending fight ?

Perhaps.

H. C. PAREKH