Case Game: The Case Of Vision Formulation

CASE GAME
The Case Of Vision Formulation

How do you grow a business without an articulated vision? Total Industries-BT's fictional company-and its owner-managers, the Kumars, did not have to grapple with that question through the company's growth years. Today, having grown into a conglomerate, Total must formally spell out its vision. Can the family's young scion, Abhinav, create a winning vision? Mirc Electronics' G.L. Mirchandani, Andersen Consulting's S. Sampathkumar, and IIM-Indore's Rajan Saxena try to resolve the issue. A BT Case Study.

By R. Chandrasekhar

Abhinav Kumar never failed to enjoy his company's establishment-day jamboree. That was one time in the year when his company, Total Industries, really splurged on its employees. Assistant managers and above-122 of them-would be flown into Mumbai from all the branch offices, and lodged in hotels for 2 days.

The get-together cost the company Rs 50 lakh, but Kumar knew it was a small price to pay for the camaraderie it generated. After all, Total was no longer the textile-peddling, one-man outfit his grandfather had founded back in 1927. Rather, it was a Rs 6,000-crore plus conglomerate with interests in consumer electronics, switchgears, batteries, and soaps and oils.

Being a largely family-managed company, Total liked to be perceived as a benevolent employer. Today, watching his employees come together like a big family, Kumar felt proud about his grandfather and father. He turned his gaze to where his father was sitting, 2 tables away to his right, chatting animatedly with Srikant Suresh, President (Consumer Durables Division). In another 5 minutes, Kumar Sr would be up on the dais, making his annual address to the employees. Kumar knew what his father would be talking about. They had discussed it over dinner last night.

Ratika Sahai, the young President (Batteries), took the microphone as soon as the evening's last item, a dance recital, came to an end.

''Thank you Rachna for your wonderful performance. Ladies and gentlemen, before we wrap up this evening, I would like to invite our chairman to the dais for his customary address.''

Amidst loud applause, Deepak made his way to the dais.

''I hope all of you had a good time over the last 2 days. Although this is only our fourth get-together in as many years, I feel a tremendous sense of belonging. I hope you feel the same because, as a company, we will prosper only when all of us contribute our best.

''As I see it,'' Deepak continued, ''the challenges before us are many. We need to become a more efficient company. We need to become more cost-competitive. Our products need to be of better quality, and we need to become more customer-friendly. The business environment today is vastly different from what it was when I joined Total. Unless we regularly re-vitalise the organisation, change our mindsets, and re-visit our basics, we cannot be competitive. What kind of a company should Total be in another decade?''

For about half a minute nobody replied. Then, Manoj Kohli, the President of the switchgears division, stood up to answer the question. ''Probably the largest company in the country,'' he said.

''Certainly the largest company, Manoj, but also the market-leader in all the segments we choose to be in,'' Deepak elaborated. ''Do all of you feel that way?'' he threw the question at the audience.

''Yes,'' pat came the chorus.

''Let's keep that in mind when we return to our jobs tomorrow morning, and work towards making it happen. Once again, thank you all for being here, and I hope it was worth your while,'' Deepak said, concluding his address.

Kumar met up with his father near the exit. ''Sir, can you give me a ride back home,'' he asked. Kumar always ''Sir-ed'' his father in front of the other executives.

''What happened to your car?''

''I have it. But I want to talk to you.''

Deepak gave him a quizzical look but did not say anything. After saying goodbye to his departing colleagues, Abhinav joined his father who was already seated in the car.

''So, what do you think, dad? Did it go off well?''

''Of course, it did. Do you have any doubts?''

''Not about the party. But something did strike me as odd.''

''What?'' Deepak asked, his curiosity piqued.

''Remember when you asked what kind of a company Total should be in another 10 years?''

''Yes. What about it?''

''Didn't it strike you as odd that there was a long silence before Manoj replied?''

''I think they were hesitant. It's not everyday that I ask them a question like that.''

''They were hesitant, dad, but not because they were shy. Don't you realise they don't know what we want Total to be? They do not know what our vision for Total is.''

''Bah...don't give me your management jargon. I don't care if they don't know of our ''vision.'' We have done perfectly well over the last 73 years without your 'vision' thing,'' Deepak scoffed.

''Those days, our executives just took orders from you and grandpa. But, today, we are asking them to act like profit-centres. Don't you think having a common vision which everybody knows about will help?''

''Do you think Total got to where it is today without a vision?''

''No. But the vision is locked up inside the heads of people like you, me, and our top executives. We have not discussed its contours and documented a formal statement.''

''I don't know, Abhi. I would still trust my gut feel than go by some fancy vision statement. It looks good hanging from your office wall.''

''No, dad.'' Abhinav persisted. ''It's just like you and I having our breakfast or dinner talks. Only, this time, it will be communicated to all the employees in the company.''

''I don't feel comfortable about your management mumbo-jumbo. But we will do it anyway.''

The car pulled into the driveway of their sprawling mansion.

''Thanks, dad. Eventually, you'll see that it works .''

''I hope so. Good night, son.''

Next morning, Abhinav asked his 4 presidents-Srikant Suresh of Durables, Manoj Kohli of Switchgears, Guneen Roy of Soaps and Oils, and Ratika Sahai of Batteries-to join him in the conference room. Without much ado, he got to the point as soon as the meeting began.

''Tell me something frankly. Do you think Total has a vision of where it wants to go?''

His audience of 4 was momentarily taken aback by the question. They looked at each other, before Guneen replied: ''Of course, aren't all of us committed to making Total the best company in the industry?''

''There are 2 things involved here, Guneen. One, only you and I seem to know where Total is headed. And two, even we see the final goal differently. We have been so caught up with our day-to-day operations that we haven't articulated the big picture.''

''You are right,'' Kohli said.

''But how do you develop a vision for a company that is as diversified as ours?'' questioned Ratika. ''Should we find a common thread that runs across all our businesses and build the vision around it, or develop separate vision statements for each of them?''

''I think the unit-specific vision would make sense provided we were to spin off our divisions into separate companies,'' Guneen said. ''Given our current position, we should identify the unique set of skills that straddles the 4 divisions.''

''In fact, I do see some common characteristics,'' said Kumar. ''One, our businesses are volume-driven. Two, the sales are largely dealer-led. Three, our products cater to the mass market, and they are sold on the economy plank. So, what is the core proposition that binds them all? Obviously, it's value-for-money. So, should our vision be built around this proposition?''

''It's my sense that we should,'' Kohli said. ''Look at our marketshares. In refrigerators, we have one-fifth of the market, it's 23 per cent in switchgears, and 17 per cent in CTVs. Our marketshare in batteries is modest because it's a relatively new business for us. Of course, soaps and oils is a legacy business, which Guneen is trying hard to turnaround."

''I feel that connected to the issue of vision is also the question of strategy,'' Ratika noted. ''It must make a fit with the vision.''

''I think this is what we should do,'' Kumar opined. ''As a first step, do an in-house vision poll to find out what our people feel about it. We'll work on the strategy thereafter.''

It took Total about 2 months to finish the in-house poll. The results were revealing. There was a stark absence of vision awareness below the middle-management level. In fact, the clerical cadre was not even sure that Total had a vision.

''This is scary, dad,'' Kumar had told his father the evening the poll results came in.

''But do you think all our employees are capable of understanding the complexities of the business?'' his father had asked.

''May be not, but they'll appreciate transparency. And if we keep our vision simple-not simplistic, though-I don't see why they won't buy it.''

''I have my reservations, Abhi. Can we develop a meaningful, shareable vision for all our businesses? How should the vision be put across, and how should we manage the mechanics of developing this vision without trivialising what we have toiled to build over the years, or scaring our employees away with too high a vision?''

THE DISCUSSION