My fellow colleagues!
I am delighted to be here once again amongst you. Today’s session is on a subject that is critical to our company’s present and future, and where each one of you can make a difference.
It is about who we are, how we work and what distinguishes us from other companies. Today is about creating a shared understanding about our “values”! I am a recent parent, and I was trying to figure out how I should measure success in this new job for which I got no training. The answer I came up after talking to many experienced parents is “I am successful if I am able to give the children the right values”. As we have been in family business for 3 generations now, we are trained to think that the company is our extended family and I believe “imbibing values” is a powerful measure of success, in the long run, for companies as well.
When I think of values, I think of strong beliefs and convictions that drive our behavior.
I think of my grandfather, whose belief in walking the talk, made him wake up in the middle of a chilly winter night to put sugarcane into a sugar mill that had stopped because the workers were sitting near the fireside to escape the cold.
I think of my uncle who went to grad school in the USA, lived on a disciplined budget and took up a local job to pay for his tuition because he believed in discipline.
I think of my father who was never took shortcuts because he believed in upholding the highest standards of integrity I have ever seen.
And I think of my brother who took every responsibility that the family gave him and discharged it passionately because he believed in his sense of duty.
By living a life based on values they believed in, our founders achieved great success and created our biggest asset – our reputation and character. v
Today, I can go to a bank and borrow thousands of crores on a “reputation” that was built by our founders – now that’s enduring success!
A wise man once said –
“If money is lost, nothing is lost,
If health is lost, something is lost,
If character is lost, everything is lost.”
Values define our reputation and character – they define who we are and what behavior to expect when dealing with us.
And I believe, our values are essential to realizing what we dreamt together last year. Last year when I was here, I spoke to you about our vision… I spoke to you about this great country, about the exciting times we are living in and how we are daring to dream… yet again! We spoke about the road we traveled together from $100 Mn in sales to within striking distance of $1 billion… about our amazing achievements and how it has built our confidence to set a higher aspiration for ourselves.v
Last year, we spoke about the enormous gratitude we owe, to our forefathers who spotted opportunities, lived in tents and endured hardship so that we could have this platform today.
We spoke about the selfless sacrifices of our colleagues who stayed away from their families and worked night shifts to build the factories that give us our profits today. v
We spoke about the untiring efforts of our people, who created new investment opportunities in time, so that we could invest our profits wisely.
We spoke about the wonderful achievements of our line managers who have delivered and continue to deliver spectacular profits.
And we spoke about the silent work of hundreds of staff members who work behind the scenes to keep our computers and canteens running, and ensuring that our payrolls are processed on time so that our line managers can deliver on aspirational targets they set for themselves without getting distracted.
Thanks to all this hard work, we are not distracted now. We are focused on our vision of achieving “Mission everest” which is $10 billion in sales by 2015. If you think that is a daunting challenge, consider this –
India is a $1 trillion economy in 2008 and is will continue to grow at 7-8% despite the recent turbulence. Assuming an additional inflation of 6-7%, I think a nominal growth of 15% is possible. This means an additional $1 trillion of GDP will get created over the next 7 years. We want only 1% of this incremental growth.
MISSION EVEREST & INDIA GDP COMPARISON SLIDE
Indian economy - $1 trillion (40 lakh crore)
Mission everest - $10 billion (40,000 crore) 1%
The Constraint is not the opportunity. India is the land of opportunity today.
The Constraint is not our resources. No matter which performance metric we look at – Sales, Profits, Assets, Investments – we are between 100 and 200 in India Inc. in FY08. We have disproportionate access to money, people and connections, and we have an ability to attract these resources to build on what we already have.
If it is not the market or the resources, then what will limit our potential?
The real constraint to our potential is how each one of us behaves every day.
What we say, what we do in a seemingly normal day has a big impact on whether we are one day closer or one day further behind in achieving our mission.
When the project leader learns about the on-site food problems, and motivates people to share food from home to improve quality and avoid overloading on the guest house, he energizes hundreds of people every day to get us one step closer to our mission.
When my secretary responds at lightning speed and sends me the email I need just before I enter a negotiation it helps gets us one step closer.
When the HR staff shows the passion to stay up all night to deliver increment letters on time it gets us one step closer.
When sugar executives dive into detailed logs of recovery of each neighboring plant and benchmark their performance it gets us one step closer.
When the all members of the cement team collaborate to review 85 plant parameters every day to produce plant consistent performance, or the marketing team makes a detailed micro-plan to optimize the sales mix, that gets us one step closer.
The day our finance team takes the challenge of financing a billion dollar SPV and the corporate affairs team takes the challenge of incubating 30 million tons it gets us one step closer.
However we are one step further away from achieving our mission, when someone doesn’t share information because he has a score to settle with his colleague.
And when someone misses on his commitment to get back about his views on a key policy in time, it takes us a few days away from our mission.
And when we don’t have the curiosity to learn the new tricks that our competitors have discovered, or we lack the humility to think that someone can teach us something new, it takes us further away from our mission!
So, how each one of us in this hall behaves every day, gets us one step closer or further to our mission. Our biggest challenge as a company is, how do we generate consistency in this behaviour of 800 leaders who are determining whether we are one step closer or further to our mission? The truth is we can’t control their behaviour – but guess what?
They can control it!
So we decided to share with them a set of principles to live by and explain to them why it is important. And then hope that they will find it useful and imbibe it. And this set of principles is our “Values”.
When I think of values, I think of them as a “compass” that helps us decide which way to go when we are lost.
“Values” give us guidance on how to behave when we face dilemmas in our daily work. And they serve as an anchor when we are seriously examining taking short cuts, or having doubts about going that extra mile which will make the difference. “Values” are a set of principles that have the power to give a recommendation to each one of us, on the “right” behavior in any situation.
We have spent over 3 years identifying these “Values”. The four family members spent over 10 meetings and 100 man hours and made a draft that was given to a committee of Executive Directors for comments. We synthesized those comments and took it to our 60 top leaders in the Goa conclave earlier this year. We got wonderful inputs from them and we together finalized the 4 core values, and 3 behaviors for each value which we all believe should define this company’s character. Now we are taking this to 800 executives across the company.
Our 4 values are Learning, Excellence, Teamwork and Speed.
Our first value is Learning!
Alvin Toffler, a celebrated author says, “The new illiterates of the 21st century will not be the people who cant read or write but the people who stop learning!”.
We live in a world that is ever changing and in which new knowledge gets created and distributed faster than before.
The internet is a 10 year old phenomenon that has changed the way we work. Google was not the first search engine, it was not the first email but Google was the fastest learner – it paid attention to what mattered most to internet users.
Google had software programmers sitting in focus groups, and interface designers working with internet users to understand what the customers wanted. They learnt about the features which mattered most and simplify life, while Microsoft and Yahoo were brainstorming in ivory towers. Result - Google is 7 years old and is the largest internet brand!
I convinced my Mom to allow me to buy a VCR when I went to high school. When I used to go to my local video store it had a big section on videos and a very small DVD section in a corner. I thought I was pretty visionary when I upgraded DVD player in college but most movie prints were not available on this new format at the local store. I kept telling the salesman to get DVD prints and he thought its too expensive to work in India. Now-a-days when I go to the local market, the VCR video store has shut down and the new kid on the block is the one with the biggest DVD collection. The difference is, one knew what is going on, the other was too arrogant to pay attention and learn. The same is the story of old cinema halls and the PVR multiplex company.
It happens in jobs too. In the 1980’s when typewriters were in vogue, the best secretary was the one who could type the fastest. As we moved to PC based world in the 90’s and word processor took over, many secretaries who did not learn lost out. The PC secretary won and the typewriter secretary lost.
Lack of learning can hurt big companies like Microsoft and Yahoo, it can hurt the small businesses like the local VCR store and the movie theater and it can hurt individuals like the typewriter secretary of the 80’s.
What behaviours are important for “Learning”?
We identified 3 behaviors that support learning.
The first learning behavior is “curiosity”. Children can teach us something about curiosity. Curiosity is to be hungry like a child, to learn from anyone, anywhere. Curious people take initiative to seek out knowledge from within and outside. In work, you can find them reading new books, sharing articles, talking to competitors, talking to consultants, visiting new plants, even visiting different industries and countries to learn new things. They are always fresh with new ideas.
The second learning behavior is “humility”. Humility is about being open and flexible to learn from others irrespective of role or position. Again children can teach us something here. My 3 year old daughter learns from everyone – parents, grandparents, servants, friends, books, TV… everything. She doesn’t care about the position or the seniority… all she cares about is knowledge.
The third learning behavior is “innovation”. Learning is useful when it is applied to solve problems. If I go to China and meet a new vendor who can supply bag house of good quality and half the price, it is useless until I can convert it into savings for the company. If I find out how pizzas can guarantee a 30 minute delivery and apply it to cement delivery its very valuable.
Our second value is Teamwork!
Corporations are a team sport not an individual sport. It’s a relay race not an individual race. Everyone has to run their own leg of the race, but we win or lose as a team. I take an example of a sport this nation loves – cricket.
We all have our roles to play as a bowler, batsman or fielder and we should all excel in our individual roles but when we win the world cup, it doesn’t matter who scored how much and who took how many wickets… all that matters is we won! We all get the glory. And when we lose, it doesn’t matter whether you scored a century and I took 5 wickets and someone took none… all that counts is that we lost as a team! If our team wins the world cup all of us will be more prosperous and more successful, we can tell our children we were a part of history… it will go on for years. If I win the man of the match, its one night of glory and it is lost after that and it is less rewarding.
We identified 3 behaviors that support teamwork.
The first behavior is “trust and mutual respect”.
If I don’t trust and respect your colleagues, how can I play together and win. How many of you have seen the movie “Chak De”? Do you remember how shabby the team performance was when each player was frowning and finding faults in each other? They had no respect for each other. Some were stars, others were not and clearly it did not matter who is a star. Because the team wasn’t a star team and the stars did not realize that they lose if the team loses, until the coach reminded them that hockey is a team sport. Corporate competition is also a team sport.
Pause here and think carefully. How many of your team members do you trust and respect. Trust and mutual respect is the starting point if we have to win the Olympics or succeed in mission Everest. Look at what we are putting at stake.
And remember what I told earlier – what you say, what you do, how you behave every day gets us one step closer or one step away from mission everest.
The second behavior that demonstrates teamwork is “collaboration”.
Collaboration simply means working together. Working for each other, not against each other. Working to help each other, not to hurt each other. This is the most obvious behaviour but often the least practiced. Our “egos” come in the way. We expect the other person to share information before we will share. We expect the other person to come to our desk before we will go to his. We expect the other person to take initiative before we will take it.
On the other hand, when we collaborate together we can create magic. When the cement team reviews daily performance as a team it improves plant consistency, when the finance team gets support of the technical people to handle a banker’s visit it improves our chances of raising money, when the businesses send the MIS on time it improves the impression our IR department makes on potential investors, and when we work with our suppliers to understand and help them it actually lowers our prices.
This is the daily behaviour I am talking about which shapes our company’s future, and is the biggest factor in which company will succeed or lose in the next 10 years in India. Our behavior is in our hands.
The third behavior in supporting teamwork is meritocracy.
Meritocracy is about rewarding individual people and groups who went that extra mile so that they become an inspiration and role model for others. When the team wins, everyone wins. However, we also want to inspire and reward the best behaviors so that we can motivate more and more people to practice that behavior more often.
Our third value is Speed!
Speed is important in a world where information can travel in an instant. What happened in the USA 60 seconds ago is known to everyone instantly via the internet or TV channels. Human beings are creating and transmitting knowledge faster than ever before. How many of you have children? Do you think they learn faster today than you did when you were a kid? The same is true for a 20 year old, a 30 year old all over the world – they are ambitious, aggressive and quick.
We believe that in an interconnected world speed is of the essence – the big will not beat the small, the fast will beat the slow.
Look at Infosys, Bharti, Suzlon – they did not exist 15 years ago. That is half a generation ago the biggest companies in India did not exist. Reliance did not exist 20 years ago. Google, Amazon and Facebook are all less than 10 years old. These companies are the biggest brands in the world and in terms of corporate age they are barely teenagers – some of the them haven’t even celebrated their 10th birthday yet. What is unique about them? They are all fast and agile.
In the new world the fast will beat the slow. No need to be afraid of big companies but we better lose our sleep over quick companies.
Like other values, we have 3 behaviors that enable us to live speed as a value every day.
The first behaviour is passion!
Passion is about drive to achieve. It is about the madness to make things happen. It is the spark within each one of us.
It is passion that makes our people work 18 hours without complaining. It is passion which makes our secretaries stay on till midnight if we are around in case we may need them. It is passion which makes us miss our vacation to go with a colleague to help him in his work. Passion is the source of energy that provides quick response time.
The second behaviour is empowerment!
Empowerment is about creating authority to take quick decisions. We are working on pushing decision making down so that the decisions can be made quickly and closer to the point of action.
I know one promoter who decided that before you shut the kiln in the cement plant, you have to take his permission. One day there was a bad hot spot and the kiln had to be immediately shut but the plant manager was waiting to contact the promoter. The promoter could not be reached on the phone and the kiln kept running. By the time he could reach the promoter the kiln was damaged beyond more than usual and the loss was significantly higher. We want people to be empowered to decide quickly. And we will enable processes that make this happen.
I know that a treasury manager was waiting to contact his boss to take approval to sell a share whose price had flared up but could not reach him as he was on international vacation. By the time he came back in 10 days, the market had softened significantly and the company missed an opportunity to realize large profits.
If we want speed, decision making has to be close to the source of action with the people who know best. The business leaders and the corporate office leaders will hopefully ensure this. If not, you can remind them of “empowerment” behavior and “speed” as our value.
The third behaviour which enables speed is meticulous detailing!
We believe “meticulous detailing” enables speed rather than hindering it. It gives us the confidence that we understand what we are doing, and gives the ability to explain it to other people to bring them on the same page while executing.
I will give you an example. We can do a cement or sugar project without a proper activity chart and if we have a star project manager he will perhaps deliver. But what happens if he falls sick or leaves. The project is in turmoil. So while we thought we had speed it was individual not organizational. On the other hand, we can do a project by detailing an activity chart, which might seem to slow us down at the beginning but it brings everyone on the same page and allows faster execution later. And this creates organizational speed because we have a plan which everyone understands. Reliance made an activity chart for their refinery which was broken into daily work schedule. When 80,000 workers entered the project site, they picked up a sheet of paper at the gate which told them about today’s work schedule. No wonder they were the fastest in the world to build the refinery. That’s speed enabled through meticulous detailing.
Our fourth value is Excellence!
21st century is the century of globalization. Protection and license raj is gone. Indian BPO’s take American jobs away. Chinese suppliers can beat local suppliers on cost and quality. Indian models can get Hollywood assignments and new companies can build global brands in a few years thanks to the internet.
By emphasizing excellence as a value, we are recognizing that in the 21st century we have to compete against global competition, and we need to have a global vision in everything – benchmarking costs, technology, people, processes, suppliers... everything !
Excellence means preparing to compete in the Olympics instead of the local league.
We identified 3 behaviors that support pursuit of excellence.
The first behavior is “courage to take challenges”. When we are on the global stage our limits get tested. How may of you watched the Beijing 2008 Olympics last month? If Michael Bolt has to win 100 m, he has to run in 9.7 seconds. He can’t say I am doing great if I do 9.9 seconds, because last year I did it in 10 seconds. If I have to compete with Bolt, I have to probably aspire for a target of 9.5 seconds. It requires courage to take this challenge. Why courage? Because it means I am giving myself the chance to fail. Now that’s tough if I am a local league champion! What happens to my self and public image when I am training? It requires courage.
So when we start thinking about challenges our areas, we have to think about “Olympic” targets. What’s the best in the world? Do I know? Am I curious to know? Can I beat that?
Can I bring sugar recovery up to 11%? Can I set up a new cement plant in 15 months? Can I raise money at Libor + 100 bps? Each one of you has to think what is “Olympic” excellence in your field?
The second behavior is “focus”. Once we have identified your challenge and have mustered the courage to take it, then we have to be all consumed by it.
Mission Everest is my challenge ladies and gentlemen, and I have the courage to take it and be all consumed by it. What is yours? I invite you to think about it and make it public!
The third behaviour for excellence is “quick implementation”. This means putting into practice what we know and what we learn. It requires physical and mental discipline. It requires planning. It requires daily execution.
So our 4 values are Learning, Teamwork, Speed and Excellence. We have coined an acronym to remember this easily. It is by picking the first letters of each value “Lets excel”.
In closing, I want to talk about what’s happening in India and how we want to participate.
The last century was about meeting human needs but the new millennium is about matching human aspirations.
We live in a world where the young are reaching higher, dreaming bigger and demanding more; a world that is challenging the limits of hope and possibility.
Our goal is not just to build a great enterprise for our stakeholders, but, more importantly, to build a great future for our country and the world at large; to give hundreds of thousands of people the power to fulfill their dreams, shape their own destiny, and the means to realize their true and diverse potential.
I wish all of you and our group the very best for the future and seek the blessings of the almighty and our elders in our journey forward together.
Thank you!
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