CROMPTON GREAVES Ltd Managing Director Sudhir Trehan has said that companies need to have in place strategies for survival and competitiveness before preparing strategies for growth.
Citing his own company’s turnaround, he said a major culture change in the organisation is needed to achieve performance excellence “as growth happens to people”.
He said this while delivering a keynote address at a CEOs conclave on ‘Business Strategies for Growth’ organised by the Confederation of Indian Industry (CII) in the City on Friday. Top industrialists, academicians and senior government officials were present at the conclave. IIM, Indore, Director S P Parashar and IIM-I Professor D L Sunder moderated the sessions.
“In a booming economy”, Trehan said, “if you straightaway prepare a strategy for growth you will come down to the earth once the market boom is over”.
Sharing what he called a three-stage journey of Crompton Greaves, Trehan said for the period 2000-2003 the company adopted a strategy of survival led by operational excellence.
During that period the company took some painful decisions like shutting down the non-viable units, reducing workforce both white and blue collar, and divesting from a number of non-core businesses. The company also reduced its borrowings and set new benchmarks in productivity and quality.
Then came the growth phase from 2003-2006, when the company set in motion a culture change in the organisation. “There was a time when CG stood for Central Government instead of Crompton Greaves”, he said in a lighter vein, “because we promoted the employees every three years irrespective of their performance”.
The company then redefined its values “to build a team of right people to get a growth strategy going”. The company also put a thrust on R&D to make the growth sustainable.
For the period 2006-2009, the third part of the journey, the company aims to achieve global leadership in its core areas of business.
Addressing the conclave, CII Western Region Chairman and Forbes Marshall Ltd Director, Farhad Forbes said there has been a significant change in the mindset of Indian companies over the past 15 years since the liberalisation.
The first factor responsible for this was a change in the global economic scenario where today’s emerging economies, countries like China and India, are dominating. The second factor, he said was much more dramatic change that has taken place in the domestic economy in the past 15 years.
“Today, we have more competition; our customers have far greater choice; there is a resurgence in the manufacturing sector and the companies are not only looking to go global, but are also acquiring companies to provide greater market access and access to R&D; the whole mindset has changed”. Forbes, however, voiced some concerns saying that there were signs of overheating in Indian economy.
Tata Consultancy Services (TCS) vice president Pankaj Baliga spoke about the role of information technology (IT) in formulating and supporting corporate strategy.
He outlined four “think steps” where IT does not play a key role and four “do steps” where IT is key factor. Forbes Marshall Pvt Ltd Director Naushad Forbes spoke about “catching up at Forbes Marshall” and underlined the importance of innovation.