The very intensity of the interactions during those 10 days every month is what makes the learning stronger for the cluster. And one of the life-giving forces of the collective learning emerges from these sessions: the fierce community-feeling within the cluster. Says Kiran Deshmukh, 45, Director, Sona Koyo Steering (Cluster One): "If I need any help today from any of our cluster companies, I only have to pick up the phone. We're absolutely open to one another." It is this transparency that must be the building block of the NCC.

WHAT KIND OF LEARNINGS
will the NCC generate?

The frequency, and not the magnitude, of the learning opportunity is what makes clustering a success. In fact, the idea is not for every member of the cluster to lift lessons or practices in toto from one another, but to get the germ of an innovative solution, which can be improvised on and moulded to the company's specific needs. So, the more the number of ideas spawned within the cluster, the more the benefits that will flow to the members, who will multiply the gains many times over. Want to see how the NCC prototypes are applying the philosophy to their cluster-learning of TQM? By following Tsuda's principle: "If you plan daily, you have 365 days to improve performance. But if you do it monthly, you have only 12." Adds Maruti's Kumar: "Tsuda-san says that drop by drop makes an ocean. Practices, he says, should be an inch long but miles deep."

For that, the process-improvement practices of every member of the cluster must be structured accordingly. The system followed by the cluster prototypes show the route that quality offers. Every company starts its day with a sunrise meeting, where different teams meet to discuss the agenda for the day. But there are never more than 2 or 3 items on the agenda so as to make the plan an actionable one. This way, there are daily targets for generating improvements, piling them up over a month so that the cluster-learning process delivers plenty of new ideas to every member. Says Amtek Auto's Dham: "We have shared considerable knowledge within the cluster about even setting this agenda. Even how--and in what order--the points are structured is as important as having the right points to discuss."

At Sundaram Brake Linings--which, like all members of Clusters One and Two, follows the Plan-Do-Check-Act cycle of quality--the sunrise meetings cover micro-issues under the 5 broad areas of manpower requirement, changeover requirement, preventive maintenance, shift-plans, and hourly production plans. At GKN Invel Transmissions, the agenda is even crisper: production, rejection, and action. The programme not only has to be specific, the minutes of every meeting also have to be recorded so that the files can be consulted whenever the experiences and ideas have to be shared.

Importantly, Tsuda manages the learning process at the 2 clusters specifically so as to draw out solutions from within the company instead of imposing his own ideas on them. The objective is to set off a chain reaction of thought, leading to ideas which spark off more thoughts, and so on. Says N. Ravichandran, 44, Executive Vice-President (Operations), Lucas-TVS (Cluster One): "Tsuda-san doesn't believe in giving fish to the hungry. Rather, he teaches them how to fish." Ultimately, the NCC must depend not on its teacher, but on itself, to create and continuously replenish the knowledge-pool that will be its competitive advantage.

HOW WILL THE NCC
absorb its learning?

The number of interfaces between different members of a cluster are limited. Ideal though it would have been, the entire workforce of one member cannot interact with its counterparts in another company so that the learning can be directly absorbed all over the organisation. The only option, accordingly, is for the managers of every organisation to act as conduits for the transfer of the knowledge acquired through the process of cluster-learning. And, as Ikujiro Nonaka suggests in his seminal, The Knowledge-Building Organisation, the responsibility for this rests with the line-managers. Just how can they facilitate the flow of the learning from the other members of the cluster to the people within the organisation? By setting themselves the appropriate objective.

Says Tsuda: "Each layer of management must contribute appropriately in value addition." The way he defined the process for the prototypes of the NCC, an organisation must distribute the responsibility for the 3 performance-management objectives appropriately. The first of these, retention of the existing levels of performance--to ensure that there are no drops from current standards--should be left primarily to shopfloor workers who can use the techniques of TQM, such as the 5Ss, daily work management, and poka-yoke, for the purpose. The second and third objectives--improving performance levels, and effecting quantum jumps in them--should, in his book, be the job of the middle-manager, taking 40 and 50 per cent of his time, respectively.

The connection with cluster-learning? Simple: the more time a manager focuses on breakthroughs, the more will he be drawing on the knowledge generated from the cluster systems rather than from within his company. And the process of applying that knowledge will entail disseminating it throughout the organisation. The technique of this circulation holds the key to its absorption.

The way the NCC prototypes do it, the primary vehicle is visual. Or, as Tsuda puts it: "On the ideal shopfloor, a visitor should not need to ask questions when going through the process. It should be visual and simple." Working as they do in a TQM framework, this is translated, for the clusters, into the use of graphic charts and single-point instruction sheets, placed within easy reach for quick reference whenever necessary. More important, however, is the principle at work, which states that it is the responsibility of the managers to ensure that the knowledge that they gather from their cluster-learning is communicated simply and unambiguously to each and every person in the organisation.

That is precisely the system which both Clusters One and Two follow in their bid to internalise the learning from their fellow-members. The workers go on to use this learning to take over from the managers the responsibility of maintaining performance standards. It is to maximise its cluster-learning that Krishna Maruti, for instance, is conducting a pilot project of withdrawing supervisors completely from one of the lines at the factory, and giving the workers the sole responsibility of maintaining performance-levels. Says Ashok Kapur, 52, CEO, Krishna Maruti (Cluster Two): "Eventually, I will remove all supervisors from the lines. My vision is to create a company where each worker thinks and produces quality, and has the confidence of maintaining his performance." That, after all, is what cluster-learning is all about.

HOW WILL THE NCC
become competitive?

The concept of clustering has deep roots in contemporary management theory. In Michael Porter's map of competitiveness, clusters are more than companies sharing a common mission. They are geographical concentrations of firms occupying different positions on the value chain of an industry, feeding off one another because of the internal competencies that every member grows in response to the 5 forces that, in the Porterian world-view, affect the structure of an industry.

The intensity of rivalry among neighbouring companies competing for the same customers, the sophistication of demand because of competition between downstream firms, the development of localised resources and infrastructure, and the growth of competent suppliers contribute to the competitiveness of the industry. The pressures here originate primarily from the marketplace, and geographical contiguity is vital for the competitiveness that the strategy of clustering is designed to deliver. And the benefits accrue to the industry first--raising its competitive status--and the firm afterwards.

The NCC--whose biggest difference with the Porterian cluster is in the fact that the gainers will be the individual companies--however, will operate in a different way. The contiguity, for starters, is not geographical at all. For, it is neither interaction with other players on the value chain, nor the benefits of being part of a socio-business community that will make it world-class. Instead, as its two prototypes are demonstrating, its power will come from shared learning, co-operative improvements in process-management, internal competition to attain global quality standards before the others, and sheer peer-pressure.

Agrees Ashish Basu, 39, CEO, Institute of Quality Learning: "As a method of implementation, common interest groups are useful because they provide a forum where people with similar interests and problems can share their experiences, and gain from a wider spectrum of ideas from others and benchmarking." Adds K.K. Nohria, 63, Chairman, Crompton Greaves, who'd like his company to join a cluster: "The concentration on implementation, rather than advice, and constant interaction between cluster members is what enables each member to learn by keeping up with the rest."

The life-force of the NCC? It's not machinery, technology, or people. It's knowledge--the ability to leverage money, machinery, and manpower for the best results. And precisely because physical distance offers no impediment to the flow of such knowledge, the NCC--which is the corporate equivalent of cross-functional teams within the organisation--will not be limited to a geographical locality. On the contrary, its spread will be countrywide, so that each member can assimilate the unique learning from operating in different local conditions and add it to the common pool. In fact, the diversity of the environments in which its members operate will be one of the founts of its riches. Explains Satish Kaura, 47, CEO, Samtel Color, who uses the cluster approach within his group: "The diversity of their origins brings major benefits to cluster companies. The cross-learning approach has significant merits. But you have to ensure that the group is not too diverse to have any common ground."

Want to know why clusters learn quicker than standalone companies? For the same reason that birds learn to sing quicker when they are part of a group. Call it the demonstration effect, but, in a cluster, it is not just the teacher--Tsuda in the case of the prototypes--who is doing the teaching. Different students also contribute their personal learning, each adding a different dimension, that enriches the general pool of knowledge which everyone can dip into. Avers Sundaram-Clayton's Srinivasan: "Being part of a cluster is a force-multiplier. It is an innovative approach, and is different from the way we worked at Sundaram-Clayton. Because we were alone, it took us 8 years."

Look closely at the prototypes of the NCC, and what emerges is the entity of the Learning Cluster--an extension of Peter Senge's idea of the Learning Organisation. Just like the single corporation that turns continuous learning--an action that every employee must perform by acquiring new ideas, sharing them with others, and embedding them in processes and practices--into competitive advantage, so does the cluster become a depository of the ever-widening knowledge because of the continuous inflow of new ideas from its members. That is why the constituents of the NCC will compete with one another for developing new ideas--not for business. The vital difference with old-fashioned market competition: the gains of one will not be at the expense of another. Game Theory--embodied for business in Adam Brandenburger and Barry Nalebuff's classic work, Co-opetition--shows how co-operation between potential rivals can lead to gains for both.

Likewise, collaboration between the members of the NCC will maximise the knowledge gains for all of them, translating into benefits for each. Says Peter J. Baptista, 56, CEO, Tata Liebert, who wants to join a cluster: "Working together conditions the thinking process of every organisation, eventually raising the standards of the entire industry. Many companies already have networks for sharing practices and learning, in the form of, say, benchmarking and process migration. The NCC will give them a formal structure.

That the cluster route to competitiveness is already paying off for the members of the prototypes of the NCC is obvious from their own roster of improvement. Going as it does beyond ad-hoc corporate confederations that are sometimes formed for selective--and occasional--sharing of information and best practices, the NCC is the embodiment of a sustained strategy for attaining global standards. Sure, it will never substitute a sound business plan, a superb piece of innovation, or even an unmatched core competence. Nor will membership automatically lift operational efficiencies to stratospheric levels, decimate rejections from the shopfloor, or turn people into paragons of productivity. And, above all, companies must ensure that the excitement of being part of a cluster does not close them either to the imperatives of running their business well, or to other sources of learning--employee-training, for instance.

What the cluster will do, though, is to funnel into its members the knowledge that is continuously being generated all around them. For, being part of a cluster automatically increases the number of entry-points for learning to flow in. No one company can realistically expect to be either the origin or the depository of all the learning that is relevant to its business. So, instead of scrambling to catch up, working as part of the NCC will enable them not only to stay abreast, but also to raise their own levels of ideation in response to those of their peers. Says Suresh Rajpal, 58, President and CEO, eCapital Solutions: "When you know it will take years to get anywhere, even starting on the journey can be painful. It is essential that there be some quick hits through the journey. Being in a cluster helps because somebody or the other will have been successful with what you're trying. That's the inspiration to go ahead."

An added advantage: companies from the country that use clusters to strive for global excellence will find that it is not a practice their international competitors follow. Says Nagpal: "The (cluster) approach has not been successful around the world as Western countries are individualistic, and their companies don't believe in collaboration for mutual benefits." So, clustering could deliver gains that companies elsewhere in the world are shut out of. The NCC will offer a gateway to the global knowledge economy that India Inc. must enter. That's why clustering, in the 21st Century, will be a strategic short-cut to global competitiveness.

Additional Reporting By R. Sridharan

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