Managing Radical Change , livre ebook

SUMANTRA GHOSHAL GITA PIRAMAL CHRISTOPHER A. BARTLETT
Managing Radical Change
WHAT INDIAN COMPANIES MUST DO TO BECOME WORLD-CLASS
Field research by Sudeep Budhiraja

PENGUIN BOOKS
CONTENTS
About the Author
Dedication
Preface
I THE CHALLENGE OF RADICAL PERFORMANCE IMPROVEMENT
1. Radical Performance Improvement Is Possible
2. Learning to Cook Sweet and Sour
3. Into the Valley of Death
II SHAPING AND MANAGING THE FUTURE
4. The Three Stages of Competition
5. Aligning for Growth
6. Managing Acquisitive Expansion
7. Diversifiction and Diversifact
8. Going Global
III REVITALIZING PEOPLE, ORGANIZATION AND RELATIONSHIPS
9. Changing the Smell of the Place
10. The Company As a University
11. Building an Entrepreneurial Organization
12. New Management Roles and Tasks
13. Building Shared Destiny Relationships
IV TRANSFORMING THE CORPORATE PHILOSOPHY
14. A New Manifesto for Leadership
Footnotes
1. Radical Performance Improvement Is Possible
4. The Three Stages of Competition
5. Aligning for Growth
6. Managing Acquisitive Expansion
7. Diversifiction and Diversifact
11. Building an Entrepreneurial Organization
Copyright
PENGUIN BOOKS MANAGING RADICAL CHANGE
Born in India, educated in the US and currently living in Europe, SUMANTRA GHOSHAL is a teacher, author and consultant in the field of international management. He is also founding dean of the Indian School of Business in Hyderabad. He has published eight books, over forty-five articles and several award-winning case studies. Managing across Borders: The Transnational Solution , co-authored with Christopher A. Bartlett, has been listed as one of the fifty most influential management books.
Author of the best-sellers Business Maharajas and Business Legends , GITA PIRAMAL is one of India s foremost business writers. A former freelance journalist with a Ph.D. in business history, Gita has been writing and commenting on Indian business for over twenty years for leading publications such as UK s Financial Times and India s Economic Times. She is now the managing editor of The Smart Manager , India s first world-class management magazine.
CHRISTOPHER A. BARTLETT is Professor of Business Administration at the Harvard Business School, where he acts as chairman of the programme for global leadership. His focus is on the organization and management of multinational enterprises. Christopher is the author, co-author or editor of seven books, including the seminal The Individualized Corporation , co-authored with Sumantra Ghoshal.
We dedicate this book to Susmita Ghoshal, wife of one of us but friend of all three
PREFACE
T his book has a long and somewhat tortuous history, in the course of which many people have contributed to it in diverse ways. While the rest of the book is written in a plural voice, reflecting its joint authorship, I chose to write this preface in the first person singular because of this history, since the contributions of many have come to the book via their associations with me.
The foundation stone for this project was laid over ten years ago when the Indian Institute of Foreign Trade in Delhi offered me the Unilever Visiting Chair to spend a few months in India. This gave me the opportunity to visit a number of Indian companies such as Maruti Udyog, Bajaj Auto, ICICI, Tata Sons, Reliance, Thermax, Hindustan Lever and Bharat Forge. Up to that time, my academic work had been limited to studying North American, European and Japanese companies, and this first research link with a few remarkable Indian companies and managers created the germ of an idea: wouldn t it be fun to do a proper study and write a book focused on the management challenges facing Indian companies?
I must highlight the contributions of a few individuals in creating this desire in my mind. First, I was deeply influenced by my meeting with the late Rohinton Aga at Thermax. His personal values, his beliefs about management and his overwhelming gentleness and kindness had a very important and durable impact on me. Second, it was at this time that I got to know Sushim Dutta and the top management team at Hindustan Lever, and the sheer quality and enthusiasm of that team helped me understand just how good a good Indian management team could be. I had, by then, become quite familiar with the management processes of some of the high-profile global corporations: General Electric, Unilever, Philips, Matsushita, NEC, Procter and Gamble, and so on-and the people I met at HLL were as good as the best I had seen anywhere. Third, both Tarun Das of CII and N. Vagul of ICICI made this overall experience possible because, without their support, I could not get access to the companies and managers I met.
The idea lay dormant, however, for a few years. The initial flush of enthusiasm subsided after I returned to INSEAD, the French business school where I then taught. The day-to-day pressures of my normal teaching, research, writing and consulting pushed aside the dream of what, by then, I had come to call the India Book .
The next boost came in 1992, when Professor J. Ramachandran of the Indian Institute of Management, Bangalore, came to INSEAD for a year, as a visiting scholar. He instantly became a friend, and together we revived the idea of a book on Indian management.
He and I worked together on two cases-one on Reliance, where Ram had excellent access, having worked for a while with Anil Ambani, and the other on Wipro, for whom I had done some consulting work. Again, these two cases, and the managers we met in the course of our field work, left some very durable impressions on me and those impressions have significantly influenced the content and tone of this book.
Having worked in a large Indian public sector company for over twelve years before retiring into academe, I could not believe what I saw in Reliance. Like other Indians, I had read about Reliance in the business press-both good and bad-but seeing the company from inside was a unique experience. In interview after interview with Reliance managers, I heard the same tales of breathtaking ambition and extraordinary speed. That is where the concept of radical performance improvement first entered our lexicon-just imagine what other Indian companies could do, if only they could capture a bit of the Reliance spirit!
At Wipro, Azim Premji provided a complete counterpoint. His absolute commitment to a set of values, particularly to complete and total integrity, was as novel in the Indian corporate context as Dhirubhai Ambani s sense of ambition and dedication to growth. If Premji could build a successful business in India on the strength of those values, why couldn t others? Another important piece of the overall argument we present in this book had fallen in place.
Ram and I planned to continue the work after his return to Bangalore. But, alas, that did not happen. I got busy writing a book with Chris Bartlett, and Ram had to take on a senior administrative role at IIM Bangalore. So, the India Book once again found itself on the backburner.
It is a pity, because it would have been wonderful to have Ram as a co-author of this book. For me, working with him was a very satisfying experience. He challenged much of my thinking, and that has undoubtedly influenced the ideas in this book in ways that I may not even be consciously aware of. I believe there is also an issue here that the directors and governing boards of Indian business schools may need to consider. Are they eating their young? Among the faculty in these schools there are many Rams, with the intellectual capacity to be world-class scholars. Yet, heavy teaching and administrative responsibilities early in their careers are preventing them from achieving their potential. Somehow, people like Ram must be given the time and the resources to research and write, for they are capable of producing outstanding work.
In 1994, I moved from INSEAD to the London Business School, and my contact with Indian managers broadened almost immediately. For many Indian business families, London serves as the second home. As a result, I gradually become acquainted with quite a few of them-Dr Parvinder Singh of Ranbaxy, Ajay Piramal of Nicholas Piramal, and Rahul Bajaj, among others. The growing Indian contingent at Davos provided another opportunity for at least once-a-year connections. Over the next two years, I did some brief consulting work with some of them, and followed that up with research and case writing. It was through this process that the Ranbaxy, Indian Oxygen and Infosys cases came into being. While I was still far away from the India book , the raw materials were slowly being assembled.
Once again, both Ranbaxy and Infosys appeared to be very antithetical to the classic systems of Indian business and management I had experienced over the 1970s, as a junior manager in Indian Oil. At Ranbaxy, Dr Parvinder Singh demonstrated that wealthy family owners of successful businesses did not have to be feudal and authoritarian in their style. His commitment to internationalization was an eye-opener, as was his unwavering dedication to R&D. At Infosys, N.R. Narayana Murthy demonstrated an even more extreme form of the same characteristics. The clarity of his thoughts, the courtesy he extended to everyone, the simplicity of his lifestyle-indeed everything about him contradicted my caricature view of the billionaire owner-CEO of Indian companies. Dr Singh and Narayana Murthy are the originators of many of the ideas we present in this book-we are largely the tellers of their tale.
In 1997, three things happened simultaneously which, together, converted the vague aspiration of writing an India Book into a concrete project.
First, Sudeep Budhiraja gave me a ring from Malaysia. We did not know each other, but I knew his father, Mr S.B. Budhiraja, who was my boss in Indian Oil. After completing his MBA at Michigan, Sudeep had joined Citiban