A readable Indian management book is a rarity, when it is based on the author’s personal experience, the more so when it is wrapped up in less than 180 pages. In this first writing effort, the author narrates well his experiences in managing Indian public sector enterprises, or PSUs.
Shiv Malik sticks to his core message that with the right system and rules, ordinary people can do extraordinary things. Applied to the public sector, it entails, above all, running such enterprises as regular commercial ventures. Given that so many PSUs are run as cash cows for the powerful, not all of whom are politicians, this message has much relevance in our country.
Malik came to the public sector after nearly three decades of work in the private sector. That, plus a sense of humour and personal courage, enabled him to carve a purposeful and effective path in the enterprises he headed, PEC and MMTC, during the years of India’s massive economic transformation, from 1989 to 1997. It is a pity Malik (who happens to be a good friend), has chosen discretion, leaving out many of the more juicy stories of the ways in which he learnt to cope with pressure from political masters. One of the stories eliminated at the final stage relates to his Orissa experiences, which probably had contemporary relevance. But what remains is sound narrative of the art of the possible in managing public enterprises in times of turbulence, especially during the early years of economic reforms. Given the importance of the public sector in our country, these lessons have much relevance.
The book’s first substantive chapter deals with the process through which the heads of public enterprises are selected. Presented as a fictional account, the vagaries of the existing process are captured well; “...what if the prime minister was to make a mistake since he had never met the candidate himself. I was told that the government had a foolproof system… The prime minister’s office either briefed him or whispered the right answer… I marvelled at the ingenuity of the system.” Malik goes on to recommend that the selection be entrusted to a board of retired or serving heads of companies, plus IIM professors, checking the past performance of candidates and their credentials.
Two detailed chapters narrate the author’s experience with the turnaround in PEC (1989-93) and MMTC (1992-97), and form the core of the book. This and other examples, including the action by MMTC to construct an office complex in the Bandra Kurla area of Mumbai to create an asset worth Rs 1,000 crore in lieu of selling the plot of land, illustrate one of Malik’s core messages: “Often the main obstacle lies in our own minds.”
The MMTC chapter is scintillating. It covers the way this enterprise handled its 1992 economic reform-driven crisis, when it lost 80 per cent of its business and had to creatively search for its own rationale, while retaining its 5,000-plus employees. Of the many strategies deployed, the key one was perhaps its commitment to communication, with its internal stakeholders and with the government, the principal shareholder. Malik laid the foundation of recovery, which took MMTC to its present heights. The leit motif was entrepreneurship, not a word traditionally associated with PSUs anywhere.
In the remaining six chapters, Malik draws broad conclusions. He covers the lessons drawn for PSU management, his experience in negotiating with Japan, the contrasts between the way China, Japan and India handle bulk buying, the decision process, and a practical guide on ways to deal with political interference. A full chapter is devoted to how a public sector executive can deal with political interference. In essence, this is not much different from the ways in which a civil servant might cope with this same issue. Integrity is always a personal choice. Those who fall prey to external pressure may at least sometimes be culpable of their own proclivity for using such external assets for personal advancement. Innocent victims are not very numerous.
The chapter on negotiating in Japan is especially valuable given India’s expanding engagement with this Asian powerhouse, and the fact that so little authentic Indian material is available on this subject. While interviewing top Indian CEOs a dozen years ago — the results are summed up in the book Managing Corporate Culture: Leveraging Diversity to Give India a Global Competitive Edge, (Ulrich, Rana and Chaudhry, Macmillan, 2000) — we had encountered irrational antipathy to Japanese business, mainly a product of ignorance. Malik offers both practical advice as well as counsel on basic methods that businessmen need to master when dealing with counterparts in that country. He shows in this understanding of negotiation concepts as well as sound knowledge regarding his interlocutors.
The book could have done with an index. The writing style may seem sometimes a bit ponderous, but that is the price one pays for years spent in churning out official syntax, in which passive constructions and circumlocution are the order of the day. Consider the way invitations to official meetings usually end: “You are requested to make it convenient to attend”!! I am sure Malik’s next work will liberate him from that legacy syndrome.
TURNAROUND
A Public Sector Story
Shiv Malik
Om Books, Noida, 2010
178 pages; Rs 395
