Dear Apurva,
I am an ex-L&Tite [ 1959 – 1990 ]
I thought , my following blogs re the CULTURE and VALUES of L&T might interest you
With regards,
Hemen Parekh
Mumbai
Monday, 25 March 2019
Contours of the Independence
Today’s newspapers carry following reports regarding the L&T / Mindtree situation :
“ L&T should define Independence : Natarajan “
Extract :
“ I don’t know what the contours of the INDEPENDENCE are. It is difficult to make a ( judgement ) based on a press statement “, Natarajan told ET …”
“ All of us will get back to biz in 7-8 weeks “
Extract :
“ We have proven that companies can built on the platform of HIGH INTEGRITY and high level of CORPORATE GOVERNANCE and still deliver HIGH PERFORMANCE “ ( Shri Krisnakumar Natarajan , Chairman, Mindtree )
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I cannot agree more with Shri Natarajan
Independence / High Integrity / Corporate Governance , are the very foundation of a company’s CULTURE
As far as the foundation of Mindtree is concerned, no one knows it better than an insider like Shri Natarajan
It would be very difficult for me – being an outsider
But, when it comes to the Value Foundation of L&T is concerned, I was an insider for over 30 years, rising from a position of a Supervisor to the position of General Manager ( Powai ) > General Manager ( Strategic Planning )
Allow me to narrate a few “ personal examples “ :
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INDEPENDENCE
[ A ]
Around 1977, L&T decided to get out of its manufacture of drilling equipment business, which employed some 300 + employees at its factory at Madh Island
At that time, as GM ( Powai ) , I was responsible for Industrial Relations and sole negotiator with Shiv Sena labour union ( Bharatiya Kamgar Sena – BKS )
Union leaders Naik and Nakhate came and argued that , it is L&T’s moral responsibility to absorb these surplus employees into other units of L&T . “ How can a company employing 7,000 people not be able to absorb 300 persons ? “
I said :
“ I will ensure that no one is retrenched if you undertake that these employees will accept whatever other jobs are offered to them , in whichever unit “
Union agreed
When I conveyed my understanding with the Union to my boss, Mr S R Subramaniam (SRS ) , he was furious
He said :
“ Parekh, I just asked our lawyers ( Gagrat ) to apply to Govt for factory closure and retrenchment. What now ?”
In the end , - and much against his own decision- SRS backed up my decision !
[ B ]
During long-term “ Wages Agreement “ negotiations with the labour union, I reached a stalemate and the union representatives walked out of the meeting , declaring they will not negotiate with me anymore and will only negotiate with my boss SRS
When they approached SRS directly , he said :
“ Parekh represents the L&T Management and is empowered to commit on its behalf . He is the final authority in this matter . Go back , request him for a meeting . He is a reasonable guy “
Union leaders returned to the negotiating table after 3 weeks of boycott
[ C ]
When Union demanded that L&T head office in Ballard Estate should work for 5 days-a-week , in place of five and half days, Chairman Shri N M Desai ( NMD ) , asked me to present union justification and my response, to a group of L&T directors
During the meeting, NMD had to leave the meeting for a few minutes – at which time , all other directors present told me that they are in favor of a 5 day week
When NMD returned , he said :
“ So , Parekh , what do you recommend ? “
I said : We must reject Union demand and continue to work as now
NMD :
“ If that is what Parekh thinks is best for the
Company, that is what he will tell the Union “
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INTEGRITY
[ A ]
During 1980, we were going through a very bad patch as far as labour agitation / militancy / go-slow / strikes etc was concerned
On the subject of “ Industrial Relations Climate at Powai “ , I was making a slide-show presentation to the Directors and other General Managers of L&T
When I reached the last slide, before showing it, I looked up to Chairman Shri Desai and said :
“ Sir , after I show you this last slide, I am not sure whether I would be able to keep my job “
NMD just smiled at me and said :
“ Parekh, go ahead and show the slide and we will soon find out “
That last slide read :
“ A MANAGEMENT GETS THE UNION IT DESERVES “
I managed to keep my job !
[ B ]
I had hoped to conclude “ Bonus Negotiations “ with Union in 1984, by end April , but it went on for weeks, without reaching any agreement
I called Union leaders ( Naik and Nakhate ) in my cabin and said :
“ From 10th to 20th May , I am supposed to take my family for holidays and all train and hotel bookings have been done many weeks in advance. If I don’t go , I have to cancel all reservations and lose money .
But it would be misunderstood by you and the 7000 workers, if I leave the bonus negotiations half way at this stage “
N&N said :
“ Sir, upon return from holiday, do you promise to settle and disburse bonus by end May ? If yes, then go ahead “
I said :
I promise . But you too must promise that there will be no go-slow / agitation during my absence from Powai
Union leaders kept their promise and I kept my promise
Reason ?
I had the habit of not releasing a circular unless I got the assurance of the Union leaders in advance that its requirements will be implemented by the workers
[ C ]
Mr Holck Larsen ( HHL ) once recommended appointment of a young girl as an unskilled worker in Madh Bit Plant
She came from a very poor family and her father was jobless
She was interviewed and appointed , on condition that she submit her SSC pass certificate in 1 week
When, despite several reminders, she would not , an inquiry with her school revealed that she had not even appeared for her SSC exam
I asked the Personnel Manager to terminate her services and phoned HHL to convey my decision
His response ?
“ Let her go . We cannot change our norms “
And , on one Sunday , HHL ( as was his habit ) , turned up at the gate of Madh factory and was stopped at the gate by a security guard ( of a contract agency ), who did not recognize him.
Guard said :
“ Andar jaana manna hai “
HHL tried to convince him that he belongs to L&T , but the guard would not listen !
HHL did not bother to call for the Shop Supervsor on duty – and turned back !
Next day HHL phone me to compliment me for hiring a proficient security agency
[ D ]
Vallabhan ( a shop foreman in Madh ) came to me and requested for a loan of Rs 2,000 from his Provident Fund
His father wanted to buy a plot of land in his native village
I explained to him that our PF Trust rules did not allow loans for purchase of land . He was in tears and asked me to speak with Shri Desai ( Chairman ), to intervene
When I explained the situation to Shri Desai, he said:
“ Parekh, we as trustees of PF , cannot break the rules and create a bad precedent .
But if you think we need to help this man , I can loan him from my personal bank account “
==============================
CORPORATE GOVERNANCE
[ A ]
Around 1959, S K Toubro’s engineer son wanted to join L&T as a junior engineer
HHL and SKT discussed among themselves and decided :
To avoid nepotism in the company, no children of managers ( above designation of Dy General Managers and above ) can be appointed in the company
I believe, this rule still holds
Once when I was heading Central Personnel Department , one fresh engineer got interviewed and was sent an Appointment letter – everything strictly on merits of the boy
In his standard / printed green Application Form, he had clearly stated that his father was a Director of L&T ( appointed by LIC ). No one reads that last para declaration in fine prints !
This would have required passing a Special Resolution in AGM, which was no problem at all
But LIC nominated director did not want such a resolution in the AGM agenda . So , he resigned !
[ B ]
In early 60s , there were 2 / 3 years when L&T was going through very bad times , business wise
And there was also a talk that L&T managers were influencing colleagues to recruit/appoint , known persons, overlooking the merit criteria
It was then that HHL called a meeting of the senior officers and handed a circular which explained the bad situation we were going through
The last line of that circular read :
“ Blood may be thicker than water but remember, Red Ink is even thicker than blood “
The message was loud and clear !
[ C ]
After very successful turn-around on the productivity front, NMD asked me to conduct seminars at many factories / offices of L&T all over India , to share the experience / methodology that I used at Powai to obtain a whole-hearted “ worker participation in management “
In these seminars, I used to stress that :
# L&T belongs to the Nation
# We , the employees, are just one of the Stake-holders
# Even shareholders do not OWN the company
# L&T Directors, certainly do not OWN the company
I used to show this slide to L&T employees participating at each location
In Bangalore meeting , Shri Desai ( Chairman ) dropped in , since he happened to be in Bangalore office on that day
When I showed that slide , he concurred with my views through some comments of his own !
[ D ]
Even after HHL became Non Executive Chairman , as per earlier practice , his car was getting “ maintained “ at the Powai Service Station department of L&T
I was GM ( Powai ) at that time and the Transport Department reported to me
After one year, SRS ( my boss ) told me that , as per rules , Company cannot maintain the car of a non-executive director , ( something which I was not aware and certainly not HHL ) , and asked me :
“ How much money have you spent in past one year on maintenance of HHL’s car ? “
After inquiry , I said : About Rs 70,000 / -
I offered to destroy old records and create new internal records ( job tickets / purchase vouchers etc ) – in the name of any current Executive Director . A simple matter of few hours
When someone informed HHL about this lapse , next day he sent a cheque for Rs 70,000 / -from his personal bank account, drawn in favour of “ Larsen & Toubro Limited “
When he received famous Magsaysay Award , he attributed that to the achievements of L&T , not himself !
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I can keep writing for hours !
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25 March 2019
Minding the Tree ?
For past 3 days, newspapers are full of reports / articles / debates and interviews re the planned takeover of Mindtree by L&T
In one report, founders / promoters have expressed fears about the possible mismatch between the cultures of Mindtree and L&T
I have no clue about the culture of Mindtree, but having worked in L&T for over 30 years ( 1959-1990 ), I have a fair idea of L&T culture
Question :
How can one delve deep into the “ Minds “ of the employees ( Trees ? ) of L&T, in order to unravel the nature of that culture ?
Answer :
Search for hidden clues in what they might have written about L&T .
One such source ( although somewhat superficial ) could be :
https://www.glassdoor.co.in/
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