Leadership Perspective On Need For Excellence In Business Today

CEOs have the critical role of inspiring and leading their organisations to success. Driving excellence is dependent upon various factors, environment and circumstances that organisations experience. At a recently concluded session by CII at Hotel Hyatt Pune, industry leaders shared their journey of how business excellence can be achieved by taking the help of various tools, frameworks, embracing technology, improving processes. Panellists for the session were: Alakesh Roy, Vice Chairman, CII Pune Zonal Council & Managing Director, Zamil Steel India & General Director, Zamil Steel Vietnam (Moderator); Kaushik Merchant, Head Business Excellence, Raychem RPG Pvt Ltd; Brig. MKK Iyer SM (Retd.) Vice President–Defence, Bharat Forge Ltd; Rajnikant Behera, Co-Convenor, Forum on Operational Excellence, Executive Director, RSB Transmissions (I) Ltd and Keshab Sen, CEO President, MLR Auto Ltd. Corporate Citizen brings you the enlightening discussion

Brigadier MKK Iyer (Retd.) : I have been with Bharat Forge for over a year now, having shed the uniform two years back what I want to bring forth is that here is a company, which in 1966 started forging for Kirloskar. And from there, having found their excellence in the business world, which was the right vision of our seniors has taken this company to a different level. People do diversify; I am nobody to say about business practices. You all are more experienced than I am but the point is they have kept their own businesses very well. Bharat Forge is a nondebt company. We’ve moved forward and diversified. That’s the story I want to bring out; you can take your own lessons from this.

Today, we call ourselves a hi-tech engineering and manufacturing company and not a forging company, although the name Bharat Forge stands. We take pride in it but I am not going to talk about it that we take pride in having 55% of the world’s crankshafts on the vehicles in the world run on the products provided by Bharat Forge.

I am also not going to talk about 90% of the steel wheels of heavy vehicles in the United States are run on products provided by Bharat Forge. But what I am going to say is that we are linked very closely in two things. The first is metallurgy, we produce special steel and the second aspect is that we know a little bit of forging.

We were into auto axles and various other things. We could have made heavy vehicles but we did not do that. Why? Because our customers were not into heavy vehicles. We have customers from all over the world who are manufacturing heavy vehicles and we could not have joined that sphere of business. Therefore, we looked at who all are using special steel and forging which are important and required by this country. We realised that the defence sector needs artillery guns, which have not come in since the early 80s when we bought the Bofors guns from Sweden. As a result, in the year 2010 or 2011, we started this diversification. And this is what I am going to talk about; we started this business as the leadership perspective on the need for excellence because artillery or infantry, for that matter, as Vidya Balan said in the movie Dirty Picture the armed forces only represent three things, that are… excellence in quality excellence in quality… and excellence in quality.

"The USA is today interested in the new products which we develop, especially in the defence sector, and we have been able to develop equipment with calculated risks"

- Brigadier MKK Iyer (Retd.)

If you don’t have quality, you cannot enter the defence industry business. So when we diversified, this aspect of excellence in quality was kept in mind. And that is how we started with this structure which we have here, called Kalyani Centre for Technological Innovation which is nowhere else other than in Keshav Nagar in Pune and from there we started producing all important things in metallurgy and moved on to the next building which was KCMI, which is for manufacturing innovation. Because unless and until you convert this metal knowledge into a product and sell it, it is of no use. Thereafter, we started on all the other green dots, which you can see today. We have R&D structure of six centres, two in Pune and remaining four in other areas in India and abroad. This R&D design needed two things, one is the infrastructure for defence and the second is people who will design and manufacture it. As far as the people are concerned, we started a system called Talent Factory, in which the people who joined our company were BSc graduates selected from B.Tech with BITS Pilani, move onto M.Tech/MBA depending upon the calibre and then further move onto doctorates. Today, our KCMI structures are filled with people who have come this way. We have almost 150+ patents, which we have already incorporated.

The second aspect is the infrastructure. The ordinance manufacturing plant in Ruvab, Austria, which we bought and we started manufacturing barrels, breech and muzzle breaks, which are various parts of the artillery that is the Topkhana. And then, as a by-product, we could start into ammunition manufacturing in Pune for all calibres from 105 mm to 155 mm. There is a fabrication and manufacturing plant in Satara. The undercarriage and automatic plant, which we already had in Mysuru, was fully made utilisable. After which we started with the missile manufacturing in Hyderabad, which today is Kalyani Rafael Aerial Systems. Although we do not advertise, our friend who went and hit in Balakot, is also a Bharat Forge product.

Apart from that, as I had mentioned the centre for jet propulsion. We have already manufactured some jet engines for small-sized use such as the UAVs (Unmanned Aerial Vehicle). Also, the tactical systems where we have almost successfully made an RF (Radio Frequency) seeker. Today, I am proud to say that Bharat Forge has eight artillery gun systems, which are more than required by the Indian Army today.

Unfortunately, except for a couple of them, the Indian Army has not yet placed orders. So based upon the current situation, the management has taken a call and has taken appropriate risks, we have already started manufacturing, and we are already firing for the Indian Army. However, the beauty of the whole system is that the United States has found these products interesting. We have been able to fire our Ultralight Howitzers along with the M777, which the US provided to the Indian Army. I cannot say that our product is better than the M777, but of course, I can always say that when we fired together, they did not find any problems and now the US Army is mounting these guns on vehicles, both 105 and 155 mm 39 calibre guns. The Chief of the Army Staff appreciated this feat and now the Indian Army procurement procedure is trying to find out a way as to how they can benefit from Bharat Forge.

Until now I have talked about our journey in defence. Now I will talk about business excellence from the infrastructure point of view; how we have moved on and developed by products that is from the gun, we moved on to ordinance, so we could make barrels, breeches, and we could make muzzle breaks of all types and we could start exporting. We export a lot of these things to various countries. Then we moved on to armoured vehicles, in which we started making road wheels and track assemblies. Today, the BMP-2 made in Medak of the Ordnance Factory Board runs on Bharat Forge wheels. This has been done because there was a decision made by the management to invest in this segment. Another by product of quality machining is defence ammunition. We do not involve ourselves in explosives. It is a non explosive company. The variety of ammunition starts from the NATO, it is the standard 155 mm to the present yellow coloured FACPDS for the Arjun tank ammunition. This is the first ammunition where we have tied up with a explosive company to make the full ammunition for Armament Research and Development Establishment (ARDE), which we would be supplying in the latter half of next year. Another by-product of what we did was we went into specialised vehicles. Now for specialised vehicles (from 2015 to 2019), we have been able to design and manufacture five different types of vehicles. The first one, the Indian Army has certified saying that it can be footed and even that it is fit for the Indian Army. The second one is the single vendor that is we are the only ones. The third one we have given to the Indian Army, the one that is used by the Indian Army in the United Nation’s mission in Congo. And the fourth one is used by the Sri Lankan Army. It’s a protected vehicle. The last one is being evaluated by the Indian Army, as we are a single vendor.

What I am trying to say is that we have been able to utilise our capability to bring about and enter a particular segment where there is no competition. Another sector is aerospace. I am very proud to say that the 737 Boeing Wings has bought Bharat Forge parts. Aerospace is a totally different ball game. Aerospace is something in which you really have to go beyond excellence in quality. So, from 2011 to 2019 we have been investing in it and we have been able to come up to this mark and that too without any order from the armed forces, which I think will eventually come.

"In my opinion, excellence stands for doing ordinary things extraordinarily well. It is a very good and simple method of how to make ordinary people do extraordinary work"

- Kaushik Merchant

My first point is the management of change. We have kept ourselves abreast with our capability, infrastructure and the talent, with possible risk. That being said, the Talent Factory that I had mentioned, twelve per cent of our employees are always on courses and they do not sign bonds. The USA is today interested in the new products which we develop, especially in the defence sector, and we have been able to develop equipment with calculated risks. The defence and R&D organisations have started calling us for their requirements. We have developed the gun called Advanced Towed Artillery Gun System (ATAGS) which was shown in the Republic Day parade last year. Because of Kalyani Steel, we were able to get a sixty-three-litre chamber in this artillery gun, without having to increase the length of the barrel. It could go to a range which is the world record of 48.07 kilometres in the Pokhran range in the category of 155 mm calibre, which has been purely possible because of the talent we built and the indigenous design and also the vision of the management.

We are lastly into missiles and air defence as I had earlier said. We are developing carbine in a joint venture with ARDE. It is already done but it has to be evaluated. Kalyani Group is now well poised to be a global artillery powerhouse.

Alakesh Roy : Brigadier Iyer has talked about his perspective of excellence in terms of business leadership. You know we have always lagged in the defence segment, so we had to import all the equipment from abroad. Now, the time has come and time has changed. Indian industries are entering into the business of manufacturing products for defence and Kalyani Group is actually superior in the world. So, I think a lot will fall out of R&D and product development will also figure into the other industries as well. As it had happened with NASA in the USA, many of the developments for the moon mission are now applicable in the day to day use.

Kaushik Merchant : I am going to talk about something, which about ten years back, I did not even know about it business excellence. I am sure some of who are privileged to be here, would understand it clear, but mostly, only when you go to the industry, you realise what is business excellence and how does it make an impact to the organisation. How Bharat Forge planned their strategy to enter into the defence segment. And how they have over time achieved so many feats, which made that organisation an excellent organisation. Before the session, we were talking to him, and I said that Bharat Forge is a well-reputed organisation, people are proud of that organisation. That is what makes the difference. Business excellence is one of the aspects or one of the tools to make an organisation excellent. And how much it is admired by the customers. Some of you here represent the small-scale industries, some of you will aspire to become larger industries and some of you, I think, are already part of larger an organisation.

Irrespective of the organisation, you can become excellent. What would I say is excellence? In my opinion, excellence stands for doing ordinary things extraordinarily well. It is a very good and simple method of how to make ordinary people do extraordinary work. I will give you a very good example. Who makes the best bhakarwadi in Pune? The answer is Chitale Bandhu. But if I ask the same about misal paav, then I am sure, there will be at least 700 names. Nevertheless, if we talk about smaller areas then there will be at least one person who makes the best misal paav in that area. What has happened in the process? The question, which comes to mind, is, what has Chitale Bandhu done so that their bhakarwadi is admired by everyone?

What does leadership do? Leaders provide an environment for others to participate. I am not from Pune, I don’t know that Chitale Bandhu is the most famous bhakarwadi manufacturer here. I am sure together as a group, we can identify many things in each company and in each business that has achieved excellence. Typically, excellence requires you to take on multiple roles and strategy is one of them. Creating a strategy or creating a plan to win is an important role for leadership. How does the leader achieve it? Leader achieves it by creating a vision. Again, that vision can be a statement such as I want to attain leadership status in all aspects of my business. This sentence can be applied to any organisation as regards to leadership status. How to put it in action? Whether I can give the best products. As one of the speakers had mentioned, whether I can give the best services. For example, in the IT sector, which company would you recommend as the company that gives the best services? Not everybody would have interacted with TCS but what makes TCS the best, is something that we should look at. The process of identifying or benchmarking is the second aspect of business excellence. One is to create the mission saying that I will be the best; second is one of the ways to make it the best. The important aspect is benchmarking. Benchmarking means to know where I stand, where others are in the field and where I would like to be. Again, when you look at this process, you will find what you can benchmark. In schools or colleges, you used to get ranks, grade points, averages etc. and you get to know he/she is the highest scorer. In industry typically, this information, barring maybe a few automobile segments, information is not available. For example, how much time does it take to develop a new product? It may take three years for some, it may take one year for some, it may take three weeks for some, depending on the product. So, if you benchmark a product, let us say, I’ll talk about my company, we manufacture multiple things, but largely in the electrical segment. We manufacture cable-joining kits. Just to give you a small example, when you join two wires in your house, you put an insulation tape. When you join two loose cables, it is not as easy. You have to ensure that the multiple things inside one cable are connected rightly to the multiple things into the other cable. We make those specialised kits, we have a proprietary technology which we make. But am I the best? Yes, I am. Are there competitors? Yes, there are. In which areas others are better? They might have a higher production rate, they might have faster delivery or better quality or lower cost, it could be any of these. When you benchmark them against that, you will identify that these are the areas in which somebody else is excelling. And then comes the process aspect. What is it that makes a company good? If they are doing something well, what is it that they are doing different, how are they ensuring consistent quality? How are they ensuring that they have the lowest cost? In India, we are very price-conscious. Irrespective of the best product on the offer, as an industry, especially in slightly turbulent times that we are having now, we are very price-conscious. I would like to have the best of the products at the lowest cost. How do I reduce my cost? The first thing I tell my vendor, ‘you should reduce your cost, it will benefit us’. The speaker in the earlier session talked about automation, digitisation and big data. All these technologies helped me reduce the cost or making the organisation more efficient. Each of these expressions needs improvement, each of these defects needs improvements, which collectively will lead to excellence. The other part is innovation. I would say innovation is the fourth point of this thing. Leadership, support, creating the vision and mission, benchmarking it with others, learning from others as well as maybe hearing from customers and from the vendors. That also is benchmarking. When I hear from a customer that someone else is doing well and I try to emulate it, that is also benchmarking.

The third is the process. How do I improve my processes within the organisation? Whether it is a quality improvement or anything else and see that I reach the next level. The fourth is innovation. Innovation means looking at things differently. Please don’t think innovation is done only by R&D scientists. Innovation is done by you, me, it can be anybody. I would say that innovation is your own journey when you discover something, which you are not told before. That is an innovation for me. For an organisation, anything beyond the current boundaries and learning from them is innovation. For a country, learning from others is innovation. For example, last year there was a lot of applause within the country and outside when our ease of doing business came down by over fifty points. When it came down, what happened? It did not come down overnight. It happened because as a country, we took that decision that I will improve my processes, I will reduce my bureaucracy and interference in these processes. Multiple processes were taking place and each of those we benchmarked with some other country…this is the best practice; this is what we should also do. When you innovate, you learn something new. For example, the current innovation areas are within largely the technology domain. From there, how do I use, for example, sensors in my factory? How do I reduce injuries? When I’m operating near the machine’s moving part and when the machine is operating, my hand does not get injured. It’s an innovation and for your factory. It will not exist anywhere in the world. It’s for your factory, for your organisation, for your own individual needs this is the thing.

To summarise, leadership gives you the vision. It also provides you with the resources, it monitors the performance and rewards and all those things. Then you have to adopt the best practices, which are coming from other organisations as well as from the customers, from the vendors and from anywhere else. You have to have processes to implement those practices within your organisation. Lastly, I would like to add, excellence is also about innovating, doing something new, what nobody else has done and try to replicate it in your organisation. I’m sure this mantra of excellence, all of you will be able to do in your organisations.