`Krishnamurthy's leadership has shown that he can achieve stupendous tasks. If for any reason at all he fails, virtually the entire public sector will have to be written off for the next twenty years,' noted the panel that chose V. Krishnamurthy as the Business India Businessman of the Year in 1987.
Management of a business enterprise in India is more difficult than in other countries.There are far more uncertainties that an Indian manager has to encounter while performing his tasks—even more so in state-owned companies than in private ones. But Krishnamurthy, through his exemplary stewardship of three major enterprises, changed the rules of the game in the 1970s and 1980s.
At Bharat Heavy Electricals Limited, he saved the company from imminent disintegration and dispelled Indira Gandhi's impression that Indian managers did not have the ability to manage large organizations. At Maruti, he was given the responsibility of not just manufacturing a car but of modernizing the automobile industry itself. Steel Authority of India Limited was almost a sunset company when he took over, but he shook up the organization from its very foundations and put it back in a leadership position.
At The Helm is the story of how a boy from the small village of Karuveli in Tamil Nadu starts out as a technician at airfields during the Second World War but goes on to script the biggest success stories of young India's fledgling public sector over the next five decades.
Tt gives me immense pleasure to write this Foreword to the Imemoir of Dr V. Krishnamurthy. The joy arises from many aspects of his personality--the roles he played and the invaluable contributions he made to Indian industry, the public sector, government, national policy and the social sector.
The single most important aspect of his career is that he has been an outstanding chief executive officer (CEO) of Indian industry. He compares most favourably with other leading Indian CEOs of his generation, including giants like Sumant Moolgaonkar of Telco, Prakash Tandon of Hindustan Lever, Ajit Haksar of ITC and others. It was his mission to work in and for the Indian economy. If he had chosen to work globally, in my view, he would have matched, if not exceeded, the performance of the world's big CEOs such as Jack Welch of GE, Percy Barnevik of ABB, Akio Morita of Sony and others at that level.
He has shown greater versatility than most comparable Indian and foreign CEOs. He first built power equipment manufacturer BHEL in the capital goods sector. Then, he brought to life Maruti in the automobile and consumer durables sector. He went on to turn around steel giant SAIL. Even any one of these successes would have been enough to qualify him as a great CEO. Two of them would have made him the best Indian CEO. All three make him virtually beyond reach and comparison.
Krishnamurthy has been a path-breaking CEO in both the public and private sectors. In BHEL, he did many things considered impossible not only by his predecessor but also by Mrs Indira Gandhi, the then prime minister. He demonstrated, for the first time in India, the ability of a CEO to lead a large, multi-unit, high technology, capital intensive, long gestation company to high performance. He did this through professional management interventions such as India's first formal corporate plan, a multi-functional corporate structure, delegation with accountability, budgetary control, performance appraisal and other management systems.
His success in BHEL was rewarded by his elevation as secretary to the Government of India in the department of heavy industries in the ministry of industry. While having to manage new political and bureaucratic relationships in his ministry and with other ministries, he brought much needed management concepts and practices to the ministry. Due to differences with the minister, he had to leave office without completing his term. But his contributions to Indian industry and the public sector were to continue.
Prime Minister Mrs Indira Gandhi requested him to revive the moribund Maruti. He ran Maruti, a joint venture with Suzuki Motors of Japan, virtually as a private enterprise. Without any prior exposure to the automotive sector, he blazed new trails. He not only saved Maruti but also transformed the entire automobile industry in India. Nothing less. He gave the Indian car buyer an undreamt-of world class product and service experience. Even if the core technology came from Suzuki, he led the absorption, skill training, vendor and dealer development, etc. to produce quality cars which not only delighted Indian customers but were also taken by Suzuki to its export markets. He revolutionized car sales and service in India. He also fostered the growth of many private sector auto component manufacturers, many of whom have since grown, been listed on the stock market and delivered high value to all their respective stakeholders.
Even as he was blazing new trails in Maruti, the new, young prime minister, Rajiv Gandhi, wanted him to turn around SAIL. Krishnamurthy brought about several deep changes in the attitudes, culture, technology, and systems of SAIL. He made the huge organization sensitive, for the first time, to issues of customer satisfaction, quality, timely delivery and competitive pricing. This was a revolution for a near monopoly producer of steel.
When he became chairman of BHEL, he was in his forties. This was a welcome departure from the then general Indian organizational culture and public sector ethos that one had to be older and more senior to become chairman. Another characteristic of the public sector at that time was blind compliance with the directions, orders, instructions, hints and even unstated desires and expectations of civil servants and the minister concerned. The typical PSU CEO was involved mostly in project implementation and, after commissioning, he was preoccupied with production. Without being insubordinate in any way, Krishnamurthy changed the culture by simply taking charge, giving comfort to employees and delivering results through his leadership and managerial competence. In a top-down milieu, where planning for PSUs was done primarily by the Planning Commission with some involvement of the ministry, Krishnamurthy took the bull by its horns and produced corporate plans for all the three PSUs he helmed. It was not just a statistical extrapolation but a strategic plan.
One day in the middle of 2002, I got a call from Dr A.P.J. Abdul Kalam. At that time, there was no talk about his becoming President of India. A week or so earlier, he had addressed managers at the Human Resource Development Institute of Bharat Heavy Electricals Ltd (BHEL). In his interactions after his presentation, he found that people at BHEL were still talking about various initiatives I had taken during my stint as chairman and managing director—twenty-five years after I had left the organization. He said he had then tried to find out more and had searched for books written about my work in BHEL but could not find any. 'Isn't it time you wrote about your work?' he asked.
Since then, friends and family members have been requesting me to document my working life, which to most of them appeared unique and full of experiments. But I never got down to the task. I used to advise active professionals to spend at least 20 per cent of their time documenting their work for future generations. This lack of documentation is one of the shortcomings of the professional world in India.
I realized that I was also guilty of the same lapse. I am glad that I have attempted to write this book before my memory fades. I have tried my best to recollect most of the incidents in my working life and sincerely hope this book captures the philosophy behind my actions and decisions.
I have received numerous national and international awards for my work. I am both honoured and humbled by such recognition, but what I really cherish is the immense satisfaction I get when I look back at the three organizations whose course I helped shape and the contributions I have made to policy making relating to the economy, public sector and the country's technological landscape.
As I reflect on my life and work, the one thing that strikes me is how what I did in the normal course turned out to be path-breaking in many ways. But at the time when I did all that, there was no sense of creating history; it just seemed the natural and most sensible thing to do.
In each of my three public sector assignments, I was put in a challenging situation. In the case of BHEL, I had to save the company from imminent disintegration and dispel the impression that Indian managers do not have the ability to manage large organizations. In Maruti Udyog, I was given the responsibility of not just manufacturing a car but of modernizing the automobile industry itself. Steel Authority of India Ltd (SAIL) was almost a sunset company when I took over, and the challenge was to shake up the organization from its very foundations and put it back in a leadership position. In each case, I battled a negative image. In each case, doubts were raised about my ability to make a difference. In each case, I was able to prove everyone wrong.
It is a sad comment on the way the public sector is managed that I am feted for something that should have been par for the course. The public sector has some of the best brains in the country. Why, then, were they not able to deliver results—to the shareholders (the public at large) or to the customers? To a large extent, the system is to blame. Over time, the public sector has come to be synonymous with the absence of identified ownership, leading to lack of accountability and insecurity in the tenure of the chief executive. This was not always the case.
I am a great believer in the public sector and the Nehruvian model of development of which it was an intrinsic part. Though I am a strong advocate of economic freedom, I feel the post-1991 economic policies resulted in an excessive dependence on the market economy and in the government giving up its role in many areas. At that point of time, I felt that was the right approach. But over a period of time, I have come to believe that the free market can take the country only up to a point, and the government and the public sector do have a role to play.
Contrary to popular perception, the concept of the public sector that Nehru envisaged was not akin to the Soviet model, where private industry was practically non-existent. In the Nehruvian model of a mixed economy, only the manufacture of arms and ammunition was reserved entirely for the public sector. In a number of manufacturing industries that required large investment—like iron and steel, heavy machines and telecommunications equipment—new projects were assigned to the public sector with a view to securing accelerated economic growth. There was no attempt to bar private industry from these areas. The public sector was meant to help develop a self-reliant economy, and there is no denying that it did play this role in areas as diverse as manufacturing steel, power equipment, and professional education as well as building a scientific temper in the country through the thirty-odd national research centres. Like Nehru, I also believe that human resource development is best done through the efforts of the public sector.
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