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Enabling Empowerment THE CONFLICT. My managers have to protect the interests of the company. They must have the capabilities to take tough, and quick, decisions. But empowerment could compound my problems as CEO since it does not guarantee successful strategic and operational decision-making THE RESOLUTION. A good general trusts his foot-soldiers. And turns them into decision-makers. Although Lal takes time to empower a person, once he is comfortable with his manager, he is never in two minds about granting him autonomy. Says Lal: ''It takes a while to empower a new person. Once I start trusting him, I believe that any decision he takes will be as good as mine. The quality of his decisions will always be superior since he is accountable.'' Such trust doesn't merely extend to his CEOs, but percolates to the lower levels too. In 1979, B.K. Chaturvedi, 49, Managing Director, Eicher Goodearth, and Group Head (Technology & Engineering) -- then the general manager of the group's Alwar-based tractor unit -- had clear instructions to hammer out an agreement with the labour union. Although he succeeded in negotiating a settlement, he ran into one problem: he had to get Lal's approval before he signed it. But bad communication lines wrecked his efforts to contact his boss in Delhi. So, he went ahead and initialled the deal. And Lal was only too happy. Explains Chaturvedi: ''Even in situations where I had to take decisions beyond my authority, I never felt unsupported. Lal has never made us feel that he is the owner.'' Nor has Lal had a reason to rue his decision to professionalise. In 1994, for instance, R.C. Jain, 51, managing director, Eicher Tractors, was struggling to bring the newly-acquired gear unit, Ramon & Demm, back on the rails. Labourers had disrupted production at the company's Mumbai-based plant, forcing him to declare a lock-out. Any other owner would have panicked. Not Lal. He neither visited Mumbai nor questioned Jain's decision. Recalls Jain: ''When I briefed him on the situation, he merely said: 'As far as I am concerned, you are my general there. We are always behind you.''' This approach, obviously, made the final hand-over to a team of managers easier. Catalysing Consensus THE CONFLICT. It is essential to create a team-oriented mindset in my top managers so that broad objectives are not cast aside for individual goals. But while democratic leadership may prevent major deviations from corporate goals, it may also choke decisions with bickering THE RESOLUTION. There are as many views as there are individuals. And any leader, however democratic, must find ways to crystallise views into consensus. So, how do you find your way through a thicket of opinion without bruising egos? Claims Lal: ''If I were to drop dead tomorrow, none of my six companies would fold up. Somebody would run them. That's because Eicher's managers have learnt to work as a team.'' He realised early enough that if professionalisation was to work in the group, ideas had to coalesce and blossom in teams. Points out Sid Khanna, 42, managing partner, Arthur Andersen: ''Lal has created a highly participative form of management. There is great focus on cohesion and consensus-building at the top.'' It was in 1992 that Lal decided to sit back, and let his managers thrash out decisions which would only bear his stamp of approval. But stepping down was not as easy as he had hoped. None of his top managers was willing to accept a role where they would be leaders -- not followers. Says Lal: ''I used to have a system where several people reported to me. When people still kept coming back for ideas and approvals, I decided to let go completely.'' Recalls Sachdev: ''He began distancing himself from day-to-day affairs when he realised that people were still dependent on him.'' Sometimes, that has meant over-ruling himself. That, post-liberalisation, Lal desperately wanted to manufacture cars is no secret. Not only was the tie-up with Volkswagen close to finalisation, he also considered partnering the transnational's Czech subsidiary, Skoda, when Volkswagen found the project unviable. But, after a market study concluded that the project might jeopardise the group's future, Lal decided to accept his core team's decision to steer clear of the car business. Says Badri Agarwal, 49, managing director, Eicher Goodearth, and CEO (group affairs): ''We concluded that we would be overstretched if we went for a car project. Lal stood by our decision.'' Likewise, in 1993, when Eicher took over Royal Enfield Motors, Agarwal was in favour of selling off its Ranipet (Tamil Nadu) plant, which manufactured the 50-cc Explorer two-wheeler, and its Chennai agro-engines plant, both of which were incurring losses. Although his contention was supported by the core team, Lal was against it. Agarwal held a series of meetings with Lal, who heard him out. And it was the core team's view that, finally, prevailed. That's why each of Eicher's five businesses is headed by an Executive Committee, all of whose members meet at the Management Conference. Points out Agarwal: ''The idea is to get the best decisions by pooling our resources.'' Stretching Systems THE CONFLICT. I must create systems in a culture that is driven by personality. I must ensure that Eicher's vision -- becoming a group that is global -- survives its leaders. I must create a world-class customer-focused organisation by motivating my people. But it must be done without pandering to egos THE RESOLUTION. Begin with the super-ordinate goal: creating a customer-focused organisation. Then, institute people-management systems, and set objectives that synergise with the big goal. And you build an organisation that has in-built mechanisms to absorb and adapt to change. Take participatory management, total quality management, and the Critical Mass technique, add on the fact that every step is being made in the group to codify learning -- and Lal's grand design becomes clear. Explains Lal: ''As far as possible, I want a structure that is not dependent on personalities. That is the ultimate objective. We are all temporary.'' Eicher Motors, for instance, became one of the first to implement the Critical Mass technique in 1995. This tool -- which involves every employee within the company, provides her with a sense of ownership, and reduces inter-departmental conflict -- is tailormade for the post-Lal Eicher. Essentially, the company's employees and other stakeholders -- such as suppliers, buyers, and shareholders -- brainstorm for three days every year over its vision, mission, and strategies. What emerges is a clear-cut programme on what, when, and how to achieve business objectives. Other companies in the Eicher Group are now implementing the technique. Points out S. Sandilya, 49, Managing Director, Eicher Motors: ''Lal is extremely open to ideas. By his actions, he has only reinforced our faith in people.'' Will Lal's managers rebuild the house that he built? Or will they simply try to prop up the edifice over time? His answer: ''Continuity may be desirable, but time is a great teacher. There is an evolutionary element in any (growth) paradigm. Even I may change my views. So, why can't they? But (an organisation's) core values and systems should be sustained and nourished.'' Still, Lal cannot wish away the conflict of roles that accompany even his new mandate. Should he play the strategic advisor, who has a say in strategy-making? Or the strategic investor, who simply demands more value as a shareholder? And will his children forever abide by his decision? Notes Pankaj Munjal, 35, the CEO of the Rs 196-crore Hero Motors: ''What Lal has done is normal practice outside this country although it has yet to prove successful here.'' Only when -- or if -- Lal resolves these final conflicts will he have executed Eicher's transition to being a professionally-managed business. And proved that withdrawal can be a winning strategy for a business family. |
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