Mohan Kumaramangalam
India’s governance, business and social ecosystems have changed dramatically since I started my career in 1975. In the previous chapter, we discussed the tumultuous political changes, all within a five-year window from 1975 to 1980. The misadventure of the National Emergency, the loss of national elections in 1977 by Mrs. Gandhi and her triumphant return after the disastrous experiment of the Janata Government happened all too suddenly like the shuffling of a pack of cards.
Like my country, my workplace too was in a change mode. Even before my career in the Steel industry started, winds of change had started blowing in India’s Public Sector. In the years leading up to the Emergency, the influence of leftist thought and the flocking of elitist, ‘progressive’ leaders to the ruling Congress Party were getting stronger.
Indira Gandhi had the dilemma of fighting the traditionalist ‘Syndicate’, the greying coterie of leaders of the Party who felt and behaved as if Indira’s Premiership was their favour to the daughter of Nehru. She had a nagging urge to assert and put any simmering revolt to rest.
She also had this self-doubt within her persona of whether she was Nehruvian enough to continue and strengthen the left-of-centre policies of her father. The Soviets who had assumed the unofficial patronage of ’non-aligned’ India were acting as the big daddy watching the novice leader settle her alignment with and sensitivities to an apparent socialist framework.
Several young, left-leaning politicians who had cut teeth in student politics, the ideological sounding board of progressive politics, trade unions and civic activism were invited, coopted and put in positions of political influence by Indira Gandhi in her party. Her game plan was to give the party cadres and the vast electorate out there a narrative that was left-of-centre, but just within a limit of tolerance. Contrasting with the conservativism of the gerontocracy that ruled the roost in the party, this image make-over did give a new dynamism to the Grand Old Party.
Chandrasekhar, Mohan Dharia and Mohan Kumaramangalam were among the resourceful Yung Turks, carefully picked up and nurtured, by Mrs. G. They became her advisors and stormtroopers in the party. The behemoth political party that fought and won independence from the British colonial masters was undergoing its first major strategic recalibration under Mrs. G. The transformation had all the signs of power struggles, often witnessed in socialist regimes, with lots of bad blood between groups and leaders.
What is important and relevant to our story about the steel industry and PSUs in the sector is the choice of Mohan Kumaramangalam as the Union Steel Minister by Mrs. Gandhi in 1971.
This was a meeting of two minds nearly in sync with each other, if not in ideology but in tactical politics for sure. Heavy Industries, importantly Steel, was a cornerstone of the massive investments by the State in most Communist and Socialist economies. Mrs. Gandhi was as impressed by Soviet economics as Nehru. She was disheartened by the lacklustre and bureaucratic functioning of the PSUs in India.
Kumaramangalam, born into a Zamindari family of the erstwhile Madras State, now Tamil Nadu, had gone through a chequered and restless quest for identity and moorings in the Communist fold and was disillusioned by the rudderless and tardy progress of the Indian left political stream. Mrs. Gandhi found the Western-educated, ideology-driven, upright and sophisticated Kumaramangalam as the best fit for taking charge of the Steel Ministry. Soon he became a confidant, a key political strategist and an advisor to her.
This one political action of the madame prime minister had in it the seeds of a possible shift in public sector performance and transformation over the next decades. As they say, the baby steps of the elephant learning to dance were taken in those hazy years of India's political economy.
It was indeed a shock and a surprise when Kumaramangalam convinced Mrs. Gandhi to push for the much-needed change in the PSU leadership and management strategies. In 1973, Wadud Khan, a senior corporate manager at Tata Oil Mills, a premier private sector company in the country, was appointed the first Chairman of the Steel Sector Holding Company, Steel Authority of India Limited. SAIL as the apex corporate body, assumed overall responsibility for the development and management of the public-sector Steel investments.
The consolidation of the Steel plants into a single holding company was to the best of my knowledge the first major restructuring and strategic realignment attempted by the huge Public Sector in India.
However, a holding company structure in the public sector had the inherent danger of degenerating into another bureaucratic layer delaying critical decision-making. The legacy of lethargy, looseness of controls and processes and the overhang of bureaucratic and political interventions in policy matters were all hurdles capable of scuttling the smooth and graded evolution of government-owned steel companies into a dynamic, market-aligned corporate entity.
Before the holding company structure was established, the legacy Public Sector Steel Plants at Bhilai, Rourkela and Durgapur were units of Hindustan Steel Limited while Bokaro was established as an independent company outside HSL.
HSL had built a professional work culture and good control procedures largely because of the experience and commitment that KT Chandy, its legendary Chairman brought to the Company. Chandy born in Kottayam, Kerala had an illustrious and rich corporate experience. He was a graduate of Loyola College, Madras and did his LLB from Bombay University. He went on to pursue a string of academic qualifications in institutions of global repute such as the London School of Economics and the Middle Temple, London. He was a multifaceted genius who had mastery in disciplines such as Law, Economics and Management. He rose to be a Director at Lever Brothers and was a key player in establishing Hindustan Lever as the pioneering retail marketing company in India. Chandy became the founder and director of India’s first Management Institute, IIM Calcutta and worked very closely with stalwart political leaders like Dr BC Roy, the most acclaimed Chief Minister of West Bengal. Chandy helming Hindustan Steel Limited pitch-forked the public sector steel maker to the ranks of a reputed, professional and stable organization, a rarity mon the PSUs.
Many people then believed that a changeover from HSL to SAIL as a holding company would be not a productive and sensible move. The joke was that when a similar holding company structure was considered for the public sector fertilizer industry, someone in the ministry suggested the Fertilizer Authority of India Ltd (FAIL). But good sense prevailed soon enough, and the name was changed, otherwise, the company would have ended up as a butt of jokes with the acronym, FAIL
It was not that SAIL did not have its moments of hope and glory. It was something of a coup when a leading light of the private corporate sector was brought in to occupy the highest echelon of a government organization.
When Wadud Khan left after three years, he had already made the first moves on shaking off the complacency and lethargy of the PSU behemoth. He moved to Steel Mistry as the Secretary and was succeeded as SAIL Chairman by RP Bilimoria, also from the House of Tatas. He was Director, Personnel at Tata Steel and it was indeed revolutionary to appoint him to head the Heavy Engineering giant, SAIL.
It was to the credit of Mohan Kumaramangalam that he kept his agility, flexibility, foresight and openness alive during his tenure as Steel Minister. Coming from a committed leftist background it was amazing how he was willing and open to bring in core talent from the private sector. Kumaramangalam tragically met with a fatal plane crash and that event cut short India’s first experiment to breathe fresh air into the PSU Management structure. From a leaking tap and a bottomless pit, the PSUs had to travel a lot to change the perception, value systems and passion for results. That journey was just initiated by Mohan Kumaramangalam.
During my studies and research later, I spent a lot of time going over how the public sector was performing and changing globally. Sadly, at that time the public sector story everywhere including in Communist, Socialist and Third World countries was mostly similar. Nepotism, external interference, lack of result orientation and very little return on capital defined the public corporate investment in much of the world.
SAIL was not able to maintain the tempo and ethos of transformational thinking and dynamism as swift political changes brought in an ill-knit and opportunistic Opposition Alliance where socialists, nationalists and self-seeking political satraps squeezed the possibility of any recovery and transformation of PSUs. SAIL like most PSUs slid back into the easy-going, aimless drifting that most government sector enterprises were used to. In my tenure in SAIL, I saw a procession of Chairmen coming in and exiting, almost resembling a musical chair game.
Some saw their tenure as a job, to be done with and move on and there were those, a few of them, who took their assignments seriously. The political alignment with the ruling dispensation was an underpinning anchor that ensured a relatively easy ride for an incumbent CEO of a PSU. That too was ‘tentative’ since you could fall out of favour with the political leadership at any time on any ground. I would say that the prestigious corner office in the plush Ispat Bhavan on Lodhi Road, New Delhi was more like a guest house suite room where the occupant was ever on a tentative stay at the whims of political masters.
The most eventful and transformational tenure of any Chief Executive that I was fortunate to get associated with was that of V Krishnamurthy, the Change Master with a magic touch and a unique vibe with the first family of Indian politics. I will cover the experiences and learning that I got through my association with Krishnamurthy and his team of top management during the latter half of 1980 in a subsequent chapter.
Commentaires