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).
|
13 July 1986
To:
Dear Friends
ECD Vs. ECD
If this
title sounds like India vs. England that means you have been watching TV.
But
test-cricket is being played in far away England and is normally entertaining.
Whereas,
ECD Vs. ECD is going
to be played
right on our home-ground (that
is, Powai) and it is
going to be a grim battle for survival.
Now if you
are curious what is this all about, let me explain.
You have
already heard about the first ecd - which stands for Employee Convertible
Debenture.
Last year. Government of India announced a Scheme under which a Company may offer such debentures to its employees. Under this Scheme, an employee may deposit every year, either Rs. 500 or
Rs. 1000 or Rs. 2000. At the end of the
5th year, the total amount is converted
into company's shares (at a fixed price decided by the Govt.). The employee cannot sell such shares to anyone for the next 2
years.
The whole idea
is to make an
employee feel that if the
company prospers, his investment also grows.
So it is in his self-interest to
see that the company prospers.
I will come
to that a little later, but first let me complete the story of the first ECD.
On 27th March
of this year, L&T, our
company, became the first Indian company to request
the existing share-holders for
permission to allot 500,000 shares to the employees .'
I am
not surprised that the
share-holders approved this proposal without any discussion. It only shows their great faith in L&T's Corporate Management. They firmly
believe that whatever proposal
Corporate Management wish
to implement, will definitely make the company grow and prosper.
But
what did surprise me - somewhat - is the fact that
our Management thought of this proposal
in the first place - and having
thought, they decided to implement it.
On the face of it, there was no
need.
Issue of ECD (Employee Convertible Debenture = Shares) was neither a collective
bargaining issue nor a requirement under
any law !
But
then there was no need to be surprised. After 27 years in L&T, I should know better ! In whatever they decide - and
do - L&T Management has
always kept in mind the
long-term interest of its employees !
And that
brings us to the second ECD.
And this ECD
stands for Economy (Co- operation) Drive !
And so that there is
no doubt in anyone's mind, let me say this at the very outset,
"This
decision to launch an Economy (Co-operation) Drive is also in the long-term
interest of the employees".
And if in the process, some short-term benefits have
to be sacrificed - then these have to be sacrificed !
This
ECD was launched by our Chairman on 5th June when
he told a group of General Managers,
" For
some years now,
our costs have been
rising, the competition growing, our
margins are shrinking and our
profitability (ratio of Profit-before-tax
to Sales) continuously declining.
We must reverse these
trends. We must fight, like
hell to
-
cut costs
-
improve
capacity utilisation
-
increase
employee-productivity
-
eliminate
waste
-
increase
market-share
-
work
harder/work smarter, etc. ".
On 2nd July, at
Powai, Chairman conveyed this
message to a larger group of managers
and their commitment was sought.
On 5th July,
Chairman spoke to managers at Madras and
on 10th July to our managers at Delhi.
More
meetings are planned, both in
Bombay and at other L&T
locations, during the next few weeks.
Managers, everywhere,
are being asked
to give their suggestions for cutting costs and
improving productivity.
But
clearly that is not enough ! When
it comes to managing
productivity-improvement, every employee is a manager !
And
that is why "Co-operation" is the
middle-name of this second ECD - Economy (Co-operation) Drive !
So it is. ECD vs. ECD.
As I
said earlier, it is going to be a tough fight
- and it must be fought in every place where an L&T employee works. And it must be fought with grim determination. We
must make it a "no-nonsense" fight.
For the last 6 years,
I have been sending these letters to you - pointing
out the dangers on the
horizon. Now, the danger is
at our door-step!.' It is
time to dig in our feet and fight back.
We must
fight,
-
Lethargy
-
Absenteeism
-
Lack of
discipline
-
Complacency
-
Unproductive
(or obstructive) employee-practices
-
Wasteful
work-practices, etc.
But we
cannot fight these things, if we keep
fighting amongst ourselves.
It is
high time we forget our differences - if we have any. It is high time
we forget our narrow, selfish, individual interests and, in whatever we say and do, first ask,
"What
is in the best interest of L&T ?".
"Give
me your blood and I shall give you freedom"
Today our
Chairman seem to be saying
"Give
the company your ECD and the company will give you ECD".
I am sure we
will not be found lacking !
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