Today’s newspapers carry following reports regarding
the L&T / Mindtree situation :
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 …”
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 )
===================================================
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 “ :
=======================================================================
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 “
=======================================================================
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 !
=====================================================================
I can keep writing for hours !
=================================================================
25 March 2019
Rsvp :
hcp@RecruitGuru.com
