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).
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26 Apr 1982
Dear
Colleagues
FACTORS
AFFECTING DECISION-MAKING :
1.
Present size
of L&T and the fast rate of growth
ISSUES OF
DECENTRALIZATION
2.
Locational
Constants
a.
Large work
force at Powai
b.
Different
groups at Powai (having different cultures-different skills-different
products-different work ethics-different approaches to problem solution)
BUT
c.
To deal with
Common external agencies who do not recognize these differences and tend to
treat L&T (especially Powai works) as one homogenous monolithic entity
(which it is not )
Eg. Central
& State government Municipal/Local authorities . The Union / Labour
commissioner Govt. Agencies (Customs / Excise / Octroi etc) Banks, Financial
Instiutions AIMO/AIEI/EFI etc.
Irrespective
of the divergent needs of the groups the decisions to be conveyed to these
agencies have to be consistent and conveyed by a common spokesman of the
company.
As the
company grows and as the institutions and the regulations proliferate (which
they invariably do ), the common spokesman (eg. GM(Delhi)-
GM(Powai)-GM(F)-DGM(Personnel)-DGM(Public Relations) etc etc.) will need to know more & more of the
group operations to be able to synthesize, group-views before presenting to
external world.
3.
COMMUNICATION
How
accurately and speedily will the
decisions get conveyed to all of these
employees for whom these decisions form a Vital imput (For their own Secondary
decisions)-will be a crucial factor in the years to come.
Besides
making a "Decision Inventory", it will also be necessary to make an
inventory of persons (or levels) upto which these decisions will get conveyed.
Needless to
add that some research on the means/methods/modes of communicating these
decisions (Decision-Channels?) - will be required.
While
deciding 'who to communicate', the need-to-know will of course be the major
factor-but hierarchy cannot be ignored. There are instances of some Senior
Manager feeling unhappy at being left-out of some meetings where their peers
have been invited, even when they were in no position to contribute to the deliberations. This even led to feet-dragging
in the implementations of the decisions taken-perhaps for no other reason than
that the "Sense of enlarged Participation" was missing.
A large
group may mean a few "Superfluous" persons and waste of their time but trying to form a
small group, strictly on a "need-to-know" basis, could sometimes
leave out an important person.
4.
THE
"SERVICE-MALADY"
While
talking of participation in decision-making, I cannot leave out what I consider
to be the "Service-Malady". While taking any operating decision it is
quite common to involve only the persons immediately concerned with the same
and leave out all others.
Let us take
a simple example of working-out the next months production-schedule. I would be
surprised if the following persons would be invited to such a meeting.
1.
The
maintenance Engineer
2.
The
Quality-Control Engineer
3.
The Stores
Officer
4.
The Labour
Officer
5.
The Cost
Accountant etc etc.
These are
treated as "Peripheral" or "Service" functions. It is
surprising that these functionaries do not get a "Sense-of-belonging"
or being in the mainstream and therefore their commitment is very low? This is
traditional Line Vs Staff dividing line
which is counter productive in the modern context.
In these
days who likes to be remembered only
when things go wrong? Who wants to be a mere supplier of data/input or
only a recepient of decision to be implemented ? No one likes to feel that his
labor (or mental skills) are being purchased under a legal contract as a
factor-of-production like machinaries or raw materials.
Such a
process of "Brand Consultation"
is quite likely to further slow-down the decision-making at L&T .
but will certainly improve the quality of such decisions and the speed with
which these will get implemented.
To counter
the slowing-down effect of the "Participative Style" of decision making,
let us now turn our attention to the next factor viz.
5.
THE
DELEGATION-IN-DECISION MAKING
In my
Circular at. 16-4-1970, I have listed the factors which inhibitdownward
delegation of decision making. These factors are as much Valid today as they
were 12 years ago. To these we may add what SKB has put down on page 2(items)
of his note viz.
RISK AVERSION
It is said
that the publicity/propaganda machine of a U.S Presidental candidate trumps-up
such a fantastic image of the man that if he gets elected, he finds it
impossible to take any decision which may tarnish that image! It is as if he is
standing in the middle of a room with mirrors on all sides (including floor
& ceiling) and he is expected to project a perfect profile in each of the
mirrors!!
L&T
seems to be caught in a somewhat similar predicament. May be we have put
ourselves on a pedestal (or in a fish bowl) where we are under constant
scrutiny by the outside world. May be we have allowed ourselves to believe that
we are infallible-we just can't make mistakes !! What would others think-the
financial institutional /the banks/the competitors/the shareholders/the govt.
/the public-if there was a mishap?
To us the
consequences are fatal and therefore we must check and recheck the entire range
of possible consequences before taking a decision. Perhaps our thinking gets
stymied/Paralysed due to this fear.
Now how is
any Organisation different from a human-being in
- Its external search of "Happiness"
- Its limited options
- Its Constraints (internal & external)
- Its Information-gap
- Its capability to "alter" the environment
(the limited resources)
- Its successes and "failures" ?
There are
bound to be some errors/mistakes/failures when we start delegating downward.
But this is inherent to any process of learning. One new could be
"There
are no mistakes in life-there are just opportunities for learning".
·
As we grow
fast and
·
As we induct
a lot of people form outside (we must, for cross
pollenization) who do not know our
decision-rules (only a few are
written)
We are bound
to make mistakes. But the fear of making mistakes should not / must not prevent
us from delegating downwards.
What we need
therefore is
- Some more decisions-rules
- Far more performance-Criteria
- An atmosphere where no one will be hung for
sticking-out his neck
- No stigma attached
- An atmosphere where an employee would own-up his
mistake (and not cover it up) and come forward on his own to discuss it
objectively with his boss to turn it into a truly "learning
-exercise".
The next
task is to decide/define what could be / should be delegated.
The
scientific method to determine this would be
1.
To define
the rules at each level of management hierarchy
2.
To fix the
responsibility for the tasks to be performed
3.
To set
performance criteria
4.
To lay-down
decision-rules
Since this
would be a time consuming exercise, an acceptable short-cut would be ask the
secretaries of all Managers to divide all incoming papers into two sides viz.
1. Where no decision is apparently required. This
would be the papers where the sender merely wishes to keep informed. No
decision is requested of you (although some senders of messages are quite
subtle!) . You are merely required to store the information in your grey cells
(the memory bank) for possible future use.
Some of
these messages are of the nature.
"I am
pursuing this particular line of action and propose to continue with the same
unless you (the receiver) have some violent objection".
2. Where the recepient is "expected" (by the sender) to react or give a decision.
It is this
second pile of papers in which we are interested. These are papers where a
decision is requested. So these are the papers where delegation is possible.
Even documents requiring only your signature fall in the category.
Since
signature /authorization is your approval of somebody's decision! Even a
ratification means the same. It implies that you (the recepient) have an option
not to approve/ratify by refusing to sign.
To each of
this incoming papers requiring YOUR decision, the secretary could attach a
small pink slip which could read.
I am unable
to delegate this to someone because
a)--------------- 8 factors listed in my circular of
16.4.70 + some more
b)---------------
c)---------------
It MSSPL was
to collect just one days slips from the tables of all the managers, we would
know
- What prevents L&T Managers from delegation decision-making?
A diagnostic
study of this type could possibly lead to what should be done to encourage
delegation. Such a study would produce a comprehensive "inventory" of
the decisions being taken/delegated by managers all over L&T. It would
certainly help in categorizing the decisions such as :
- Strategic Vs Tactical
- Short term Vs Long term
- Policy Vs Operational
- Major Vs Minor (resume committed)
- Pertaining to Physical Systems Vs Information
systems
-
Restricted
to group or repercussions likely to be felt in the other groups.
- One-time or of repetitive nature.
- Data-based or Intuitive etc etc.
If a
check-list incorporating the above mentioned categorization was to be prepared
and used by MSSPL study-team, it could bring into sharp focus the entire
decision-making process at L&T. A better understanding of this process
could lead to better decision rules.
MOTIVATIONAL
CLIMATE:
I have
mentioned this quite at some length, during my presentations to
-
PRC in 1980
-
OCM in
Feb.81
Some 10
years ago, Managers used to earn much more than a Supervisor and considerably
more than a worker. They also felt that much more responsible.
In 1982 the
gap has been largely bridged with the wages of an unskilled mazdoor equally the
stipend of a Diploma Engineer!- at the beginning of the grade! On the other hand the Responsibility gap has
widened! Absolute Job-Security (thanks
to our labour-laws) and militant trade-unions have taken all fear out of a workers
mind, leading to rampant reverse-exploitation in the high-wage island companies
like L&T.
In Singapore
Prime Minister Lee has been raising workers wages on purpose so that the
industries would be forced to get out of "low-technology"
products-which cannot sustain the high wages-and get into "high
technology' products which could compete abroad.
Our
government has managed to raise the wages-without any purpose! And what is more
we cannot 'fire' low-skill people and 'hire' high-skill people-even if we can
continue to keep shedding low-technology products and keep getting into
high-technology products-which is itself not so easy for a company like
L&T.
By 1992 the
income-gap would have been reduced to nil. The cases of drivers whose
take-house pay exceeds that of his director-boss would no more be isolated! By
1992, I visualize that almost 50% of the persons whose names appear in the
Employee's Details (persons drawing >= Rs. 3000 pm) in L&T' s. Annual
Report would be "Unionised"! - and this number would be of the order
of approx. 1000 persons out of a total 2000 in that years report!!
Any debate
on whether this is a welcome trend or not is meaningless. Any debate on whether
any intelligent boy would anymore want to spend 5 years getting B.E./MBBS/C.A.
is also meaningless.
The only meaningful question is
"How do
you make all the 2000 persons (the unionised and the managerial) feel and act
with equal responsibility?"
With several
companies granting a monthly wage increase of
Rs. 400/500 (e.g. Bajaj) in 1982 to their unionised employees, L&T
will find it extremely difficult to maintain the present wage disparity (if
any) between the unionised and the supervisory staff. If this is coupled with
increasing worker indiscipline and union militancy there could be severe
erosion of supervisory and the managerial morale and lowering of managerial commitment.
What is a
possible solution?
I have tried
to provide an answer in my OCM presentation of Feb. 81.
There will
have to be a complete change in the managerial attitude-from the corporate
management down to the shop-floor supervisor.
No more
shall we assume that we the managerial staff alone shall decide all important matters. The union
and the workman must share some of the decision-making responsibility-starting
with the matters of "How" followed by Where, When, What and finally
Why.
Having
demonstrated that a wage-gap (and therefore a responsibility-gap) is
impossible, the worker participation in management becomes inescapable!
If we wish
to remain motivated (anything otherwise is suicidal ) and avoid high blood-pressure,
the only sensible thing to do is to completely change our attitude.
H. C. PAREKH
