1. ATTHE HELM: Reforging SAIL
SMP
Group 57
Kolkata
R Rengesh
Siva
Satya
Srivastava
Thane
Mukesh
Tanak
Jeetesh Joshi
Pune
Prakash
Variyam
Leading Organizations
2. V. Krishnamurthy
- Born on 14 Jan 1925; Finished College in 1943
- Joined BritishAirfields asTechnician In charge for electrical installation at Kolar and Chettinad
- End of 1944, joined Design and Drawing office, Electricity department, Chennai
- For the next two years, involved in design of several hydroelectric projects
- Posted as Junior engineer toTechnical Directorate, under the Chief engineer,V. P Appadurai
- 1954 joined Planning commission as a research officer for Natural resources division
- 1955 appeared UPSC, and Joined Central engineering services, part of two planning commisions
- 1960 Joined HE(I)L – a fledgling public sector company.
- 1967 Deputed as Manager atTrichy – BHEL
- 1972 Appointed as Chairman BHEL (Re-engineered BHEL)
- 1977 Secretary – Heavy Industries
- 1981Vice Chairman and Managing director at Maruti
- 1985 Chairman – SAIL (REFORGING SAIL)
3. Mr V. Krishnamurthy, the turnaround specialist having a track record in BHEL and MARUTI,
was appointed as the chairman of the giant organization SAIL. This was a well established
company but was almost a sunset company and was in a deep crisis in 1985. At that time, the
company was incurring a loss of Rs.1 crore a day. Mr V. Krishnamurthy was given supreme
authority & full support to move the company in profit earning mode and to run it more
efficiently by any means, by our late Prime Minister Mr Rajiv Gandhi.
APPOINTMENT AS CHAIRMAN
4. Decisions influenced by External govt agencies
Company was paying huge amount as overtime expenses
High energy cost.
High coke rate consumption.
Low capacity utilization.
Low productivity, low morale of work force but large work force.
Poor quality of steel production
Mismatch of production and demand
No strict delivery schedule.
Little customer orientation
No modernization of plant.
•
Referred as “DreadfulAssignment” by PM
- ActualCapacity utilization was 73% againstTarget of 85%
- High inefficiency due to obsolete technology in all 5 plants
- Hugely Overstaffed with 2.5 lakhs direct on Pay rolls
- Highly bureaucratic and hierarchical
- Lack of leadership
- Posted 320 crores in 1982 - 84
Challenges Observations
5. Leadership Insights
1. Inclusion of Sr. Managers: “You have done ur best, but perhaps
the desired results are not yet achieved. Let’s try differently. If
succeeded, it’s urs, else, I take the rap”.
2. BringingYoung talents to create transparency and
communication
3. Rigorous communication thro’ workshops
4. Restricted external pressures
5. Convincing Unions: “It’s better to go through discomfort of a
planned change than the pain of a forced change.”
6. Inter-plant Raw Material planning
7. CustomerCentricity
8. Efficient Distribution channels- cater to all segments
Winning Resolutions
1. Creation of 13 Page document – 5 Priorities of Action
2. Institution of Corporate planning department
3. Banning Overtime throughWell researched argument
Addressing Manager inefficiency, not employee welfare.
4. Cross skilling and cross functional deployment of resources
5. Uniform working hrs for both Managerial staff and workmen
6. LaunchingVRS
7. Creating limelight for neglected departments
8. Bringing in Performance based appraisals and incentives
9. Zero Base Budgets
10. Swift execution by awardingTurn key projects (end to end
acc’tability)
7. End Summary:
Work culture in SAIL had changed. Mind modernization had appeared.
Overtime cost reduced from Rs.40 crores to Rs.2.40 crores from 1985-86 to 1986-87
10000 employees opted forVRS and there was a marked reduction in manpower.
Capacity utilization of facilities was increased to 93%
Economies in scale obtained in procurement & production.
Energy cost was reduced.
Customers services Improved.
And all these led to the company generating profits steadily since 1985 which increased to
Rs.302 crores in 1988-89
Thank you
Virtual Group 57
9. Personality profile –V.Krishnamurthy
• Very humble beginning – born in village ‘Karuveli, Thanjavur District, Tamil
Nadu in 1925. Faced tough situations during his early life, which
eventually made him a self made man.
• The virtues which were explicitly seen as his main possession all through
his career, could clearly be linked to the selfless attitude during the early
part of his life, which he inculcated when he lived with his brothers.
• All through his career, VK exhibited a great sense of direction, vision and
highest level of integrity with the organizations that he worked with, and
he himself attributes these to the pure intent in his thoughts and actions
• Simplicity, honesty and a collaborative win-win approach paved the way
for success in each of his endeavors
• VK never allowed his own personality to be influenced by others however
great the opposing force would be. He always managed to stay his
ground, was more than convinced about the direction and objectives that
he set for himself and for the Organizations that he turned around.
9
10. Evolution of a Planner, Leader and above all, an excellent strategist…
• Joining the Planning commission was a turning point in VK’s life – developed expertise in Policy
making; learnt to think big and to look at problems in a wider perspective; thus enabled him to see
through from the start point till the end of the road, even though the journey was quite difficult and
full of obstacles
• Opportunities to work on big and important projects at a young age enabled VK to develop a sense of
self reliance and pride in his own work. During interactions with many prominent ministers and
leaders of Independent India, VK observed that always National interest prevailed over differences
between individuals- molded his leadership style and reinforced the inherent selfless attitude
• The excellent leaders with whom VK worked during his management career at HE(I)L offered
guidance when necessary, but never interfered or imposed themselves on his work or decisions - a
leadership style that he carried forward
• In depth understanding of industries like energy, power plants etc. proved very handy when he
assumed higher roles in BHEL and SAIL. This along with his detailed analysis of business processes
enabled to decide on the right direction for the entire organizational restructuring programs and to
formulate necessary strategies
11. • There is no general prescription to handle all situations. Strategies and Leadership styles need to be
suitably varied based on the long term objectives
• There are however few factors which are fundamental and which ensure long term sustainability of
organizations, listed as follows.
• Any company whether in private or public sector, cannot prosper if it does not engage in marketing
and in keeping the customer at the centre of all its decisions
• Every company must ensure that it is technologically strong and sound and over time, self reliant.
There is no substitute for in-house efforts on R & D
• It is equally important to ensure that the organization has the correct policies, standards, systems and
procedures to help optimize its functioning. Directly adapting any existing system without adapting
to our needs, without blending with our ethos and culture will not yield results
• Every company must have a strong focus on Quality of its products or Services
• No company can achieve its success if it ignores the people that make the organization.This includes
motivation and treating them with dignity, and involve people at levels to make them feel as part of
the whole process 11
Important notes…
