V. Krishnamurthy took over as Chairman of SAIL in 1985. At the time, SAIL was hugely inefficient with outdated technology, low capacity utilization, massive overstaffing, and was losing money. Krishnamurthy implemented a people-centric approach focused on constant communication, improving productivity and quality, developing marketing and customers, and upgrading technology. He spent time visiting plants, communicating with managers and workers, and developed a plan of action. Krishnamurthy improved efficiency, reduced costs, increased customer commitments, and oversaw technological and process improvements that helped turn SAIL into a profitable company.

1. Group 28
At the Helm: Reforging SAIL
A dreadful assignment
Group 28 SMP batch 12
Shyam Sundar S, Bibek Singh, Shashank Shyam Abhyankar,
Ankul Mehrotra, Abha John Jitendra Charan, Rajeev Kumar Bhasin
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2. Group 28Group 28
● Born on 14 Jan 1925
● British Airfields as Technician In charge for electrical installation at Kolar and
Chettinad
● Involved in design of several hydroelectric projects at Chennai Electricity Board
● 1954 joined Planning commission as a research officer for Natural resources
division
● Cleared UPSC, and joined Central engineering services, part of planning
commission
● HE(I)L – a fledgling public sector company
● Deputed as Manager at Trichy – BHEL, Chairman BHEL (Re-engineered BHEL)
● Vice Chairman and Managing director at Maruti
● 1985 Chairman – SAIL (At the helm of it due to Rajeev Gandhi’s request)
V. Krishnamurthy
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3. Group 28Group 28
Leadership
Importance to people and
treating them with dignity
Constant communication
with all stakeholders
Creating awareness of
quality and productivity
Developing a marketing
and customer culture
Constantly upgrading the
technological status of
the company
V. Krishnamurthy’s Management Philosophy
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4. Group 28Group 28
● Actual Capacity utilization was 73% against Target of 85%
● High inefficiency due to obsolete technology in all 5 plants
● Hugely Overstaffed 250,000 direct employees on payrolls
● Highly bureaucratic and hierarchical
● Lack of leadership
● Posted 320 crores of loss in 1982 - 84
SAIL – The dreadful assignment
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5. Group 28Group 28
● People centric approach
● Highly effective and
constant communicator
● Productivity and Quality as
key pillars
● Customer centric approach
● Using technology to upgrade
the company
V. Krishnamurthy’s Magic – Reforging SAIL
Leadership
Importance to people and
treating them with dignity
Constant communication
with all stakeholders
Creating awareness of
quality and productivity
Developing a marketing
and customer culture
Constantly upgrading the
technological status of
the company
5

6. Group 28Group 28
● “If we succeed, credit is yours; if it does
not I will take the rap”
● Participatory approach towards to
reforge SAIL
● Spent first 5 months visiting each plant
meeting managers, union representatives
and workers
● Organized drinks and dinner evenings,
especially for the younger lot
● Arranged workshops for corporate
managers level involvement in key
discussions
● Priorities of Action plan drafted with the
help of people
Importance to people, treating with dignity
“Each and every employee of SAIL should
know about the mission of the organization,
its objectives and future plans so as to feel a
sense of pride and identification”
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7. Group 28Group 28
● We were constantly talking to people, getting to understand their problems and seeking
solutions
● Interactions across the organization to prepare a Priorities for Action document
● Roped in 685 corporate managers-executives of the level of chief superintendent and
above to get their views
● Divided them in groups of around eighty people and organized four days workshops for
intense discussions on all the key issues listed in the Priorities for Action document
● These managers became messengers to take the message forward across the
organization
● Convincing Unions: “It’s better to go through discomfort of a planned change than the
pain of a forced change.”
Constant communication with all stakeholders
“Modernization of the mind before modernization of machines became my mantra while
managing SAIL”
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8. Group 28Group 28
● Organization restructuring for improving productivity
● Enabled collective thinking or policy making to improve productivity by
introducing the corporate planning divisions
● Improved work culture by inducing discipline
◦ Reduced overtime bills by bringing in managerial
level disciplines
◦ Exposed managers inefficiencies and pushed them
to plan work well
◦ Took tough measures to reduce absenteeism
from 38% to 5%
◦ Cross department deployments to improve utilizations
◦ Overlapping shifts to reduce productivity loss of 5-10%
◦ Trimmed the workforce by schemes like VRS,
redeployment of existing staff on vacancies
Creating awareness of quality and productivity
“Everyone will be paid for
the work done and not for
the time spent”
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9. Group 28Group 28
● Initiated an 8 hour shift for the marketing teams, gave some motivational
incentives like subsidized lunch and more frequent interactions between
families of executives and non-executives
● Increased overall efficiency led to faster deliveries and higher quantities of
steel
● Committed to customers for no price increase for next three years
● Educated SAIL employees that the success of any business depended on how
efficiently it can give the customer what he wants
● Changed distribution mindset to marketing mindset
● Three principles of marketing for SAIL
◦ Absorb all costs within its control
◦ Commit to delivery schedules or pay penalties
◦ Replace supplies if complaints about quality
Developing a marketing and customer culture
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10. Group 28Group 28
● Time bound supply scheme started in 1985 to commit to
supply a certain percentage of supply within certain time
schedule
● If not delivered, pay penalty of 3.5-4% to the customer
● Customers were appreciative of this gesture in a supply
constrained market
A Chennai based customer producing large machinery, KCP, returned the
cheque bearing the penalty payment, saying this gesture was good
enough and that he did not want the money
Developing a marketing and customer culture
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11. Group 28Group 28
● Implemented the marketing MIS
(Management Information System)
to curb the demand and supply gap
● Introduced the stockyard
modernization program to better the
turnaround time of trucks that came
to take deliveries and avoid
congestion at stockyards
● Investment in computerization and
wireless communication network
linking all the plants and stockyards
with each other to track movement
of wagons
Constantly upgrading technological status of SAIL
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12. Group 28Group 28
● Modernized the mind before the
technology
● Facilitated employees to British and
Russian steel plants to get an idea of
modern production systems and
equipments
● Drew the Technology Plan and Technology
Committee set up to oversee the
modernization program
● Covered revamping old equipment,
upgrading technology and reducing energy
consumption and introduce new processes
Constantly upgrading technological status of SAIL
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13. Thank you!
❑ Shyam Sundar S
❑ Bibek Singh
❑ Shashank Shyam Abhyankar
❑ Ankul Mehrotra
❑ Abha John Jitendra Charan
❑ Rajeev Kumar Bhasin
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