B('{5i"~5~ 1oday, ~~'~1P],~r 7 21,1996

y ol(.{",~5, Nij11)e~r 23.

~

.. CASE STUDY

Mr Chairman and fellow professionals,

L
ET ME,AT THE OUTSET,THANKTHE ORGANISERSOF
the 25th National Management Convention for provid-
ing me an opportunity to make this presentation. I wish
to speak to you this evening about our experiments with cul-
CULTURE
SYNOPSIS: The CEO of Darshan, the Rs 365-
ture-building at Darshan. It has been over five years since we
took the firsthalting steps in that direction. We have had some
crore consumer products manufacturer, was
success, but we also have some reservations about the route using his presentation at the 25th National Man-
we have taken. It is in this context that I would welcome your agement Convention to confront his own
comments. Please feel free to interrupt me at any point of time. doubts about the culture-building process that
Itwas in October, 1989,that the Rs 350-crore Bharat Industries, he had initiated at his company five years ear-
a Delhi-based diversified trading conglomerate, carved out its
lier. Darshan had used culture as a unifying tool
various businesses into autonomous companies in the process
of dividing up the family business. The Rs 90-crore consumer to ensure that all its people pulled together in
products division-christened Darshan-inherited a small the same direction. However, even as the com-
manufacturing facility on the outskirts of Delhi, and two prod- pany boosted turnover and profits, the CEOwas
ucts: Pep, a cooking oil; and Verve, a coconut hair-oil. Both wondering whether he had really achieved his
were doing well, with marketshares of 8 per cent and 12 per purpose of improving performance through a
cent respectively-although the consumer products division's
lack of marketing focus had led to a history of failures with threats. We then looked at Darshan's organisational structure
products like sunflower oil, groundnut oil, and toothpaste. and spotted many gaps. We reckoned that Darshan needed a
The immediate tasks before the new company-which I total complement of 45 managers, as compared to the 15ithad,
joined as CEO in November, 1989-were to consolidate the to take care of its immediate business needs alone. We had to
strengths of its existing brands, divest in the lame ducks, and seek fresh skills and install a good team. But the lack of a track-
launch new products. And the overriding priority was to get record as a professional company was a major hurdle in attract-
closer to the customer. A SWOT analysis suggested that our only ing quality people. What we did, therefore, was to sell people a
strength was a sales and distribution network, panning about dream-of building an organisation from scratch. It worked.
1,500wholesale distributors nationwide. The major weakness We also ran a press campaign in the print media forsix months,
was the lack of depth in product development, quality control, announcing the birth of Darshan, which gave us a lot of visibil-
human resources management, finance, and technology. But ity and helped our recruitment efforts. Yes, sir?
the opportunities were clear: the consumer boom in the offing I remember that campaign. It was catchy. It gave some
offered the possibility of increasing our market-reach. Of kind of identity to Darshan. Was that the time when you
course, with the economy bound to open up sooner or later, an felt the need for culture-building?
increasingly-competitive marketplace would carry its own No. Culture-building was not even an idea at that time. There is,
after all, a big difference between corporate identity and cor-
porate culture. While the former creates a bonding between a
company and its external constituents, the latter is an internal
exercise, connecting people to a common objective ofserving
the customer. At Darshan, the need for a culture was felt much
Sell a dream and later-when we had the new team fully in place. Coming from
. recruit talent different companies, including well-known transnationals,
many of them simply sought to duplicate the tactics and strate-
Link culture-building with gies that had done well for them in the past. For example, one
delivering customer value of them tried to change the logistics pattern to one in his former
.. ,;jt"'C"""'.("', .' ,'"",,, ,"'N company, without regard to the time-tested relationship
Address shop-floor meetings r~ Secure buy-in by top and between Darshan and its dealers. Each manager was thus
on mission and values middle management
pulling in a different direction. That was when the need for an
internal culture as a bonding element surfaced. Yes,sir?
Appoint a dedicated manager experiential I'm sure there must have been a dilemma over the
to co-ordinate various workshops
process: whether you should let the culture evolve over
Introduce retreats, critique time, or whether it should be first articulated and, then,
sessions, open house Declare new product institutionalised...
, sessions, andfeedbacksurveys development as a thrust You've taken the words out of my mouth. Over a series of discus-
area. Announce a quality
policy. Seek technology sions with Darshan's managers, individually and collectively,
Invest in quality relationships with upgradation. Spruce up
vendors and distributors. Invite them workstations
to allin-house sessions
BUSINESS TODAY. DECEMBER 7-21, 1996
 8U5iO~5~ ;today. 'P~'~1!)b~r 7 ~21. 1996
"oJ(11)~ 5. N(11)b~r 23.

mission statements were evidently too esoteric for them. Butwe

CONCERNS had one thing in our favour: their loyalty to the organisation,
generated by an association of over 10years with the erstwhile
consumer products division. Once the top management openly
demonstrated its commitment and secured buy-in at the middle
common commitment to the corporate culture. level, it would be easy to sell the idea down the line. We got the
document translated into Hindi, and distributed copies to each
Did Darshan use culture effectively? Was its
workman. I personally addressed the workmen in all the three
objective of culture-building appropriate? Was shifts, and spoke to them about the importance of customer-ori-
culture-building at all essential? Did Darshan entation. Idid it every week over the next six months. Ispoke to
go about it the right way? While Modi Xerox's the same audience, on the same issues, over and over again. We
K. Swetharanyan feels that only minor modifi- also held small group workshops, co-ordinated by the line man-
cations are necessary, Citicorp Software's agers, to reiterate the message. However, the line managers
V.V.M. Rao and Mahindra-British Telecom's were getting impatient. They were spending so much time on
new initiatives that itwas affecting theirregularwork. To lifttheir
V.M. Vartak both advocate linking culture- burden, we created a new post-general manager (organisa-
building to strategy. And the NMIMS' Aneeta tion development). His brief was to provide a momentum to cul-
Madhok suggests that the process must be ture-building at Oarshan by simultaneously working at three lev-
aligned to Darshan's business objectives. els: the individual, where he would develop processes aimed at
personal growth; the small group, focusing on team effective-
we coaxed out a consensus. And the culture we wanted was ness and team renewal; and the organisation, to build the values
summed up in one sentence: delivering value to the customer we had already spelt out. Yes, sir?
through building a value-based organisation. That became the But appointing a dedicated person for organisation
sheet-anchor-a mandate, so to speak-for all our subsequent development (OD) has its problems. People tend to pass
efforts at culture-building. But, as you would agree, that sen- the buck. Nobody owns the effort. I have seen it happen
tence was only the skeleton. We had to breathe life into it. And in most companies with TQM, for instance,...
thus evolved what came to be called the corporate mission and Yes, but unlike TQM,ODis, essentially, a top-driven and manage-
values statement. The mission outlined what we wanted to be: ment-led effort. Itsucceeds only when its messages are reinfor-
a highly competitive consumer-oriented enterprise-number ced and reiterated regularly from above. But, as our own expe-
one or two in each product category. The values, which out- rience has shown, one can never reiterate enough. It isamazing
lined the preferred behaviour in accomplishing that mission, how people in an organisation wander from the basics. The OD
centred around three fulcrums: people, products, and profits- intervention reinforced the culture-building efforts at Oarshan
the three Ps. The document elaborated-and I quote: "We will through four different mechanisms: experiential workshops,
invest in mutually beneficial relationships with PEOPLE. We will retreats, critique sessions, and feedback surveys. Each was exe-
offer consumers value for money through creating PRODUCTS of cuted on structured lines, and has today become part of the
superior quality. We will use PROFITS for both reinvestment as
well as for maximising wealth for all stakeholders. The three Ps
are the three cornerstones of a mutually reinforcing and syner-
gistic triangle, each drawing from the other to create more of
itself." The statement was discussed at a two-day workshop of
all managers with a view to building a comprehensive, detailed
document. Over the next few weeks, each manager discussed
the document further with his close subordinates. The idea was .. Providesa bondfor
to identify practices which contradicted, or fell short of, the peoplein company
"""'"'''''''' ""'"''''

standards prescribed in the document, and align them with

new standards. The effect was electrifying. Iwas surprised at the ...Enhancestran$parency
in workenvironment
degree of ownership it generated among the managers and
supervisors. This was around mid-1990.Your question, sir?
But what about the workforce? Why were they not
.
. ...........................

process
Fosterscontinuous
improvements
included from the beginning?
Much as we tried to make the exercise participatory from the .Encourageshonestyin
beginning, we had to exclude the 550-strongworkforce because communication
of historical reasons. Although their average age was 35, few .
among them could comprehend issues beyond those which .. ClarifiesorganisaUonal
affected them at their immediate workplace. Concepts like methodologies

BUSINESS TODAY. DECEMBER 7-21,1996

.
 iU6ib~5~ 19day. "P~'~J!)b~r1 21.1996
5. r-I"tbb~r
~

y ol"",~ 23.

CASE STUDY

annual training calendar. Experiential workshop is the bedrock

of culture-building. It is aimed at exploring the nuances and . !"TRI~t4GtEIf.
interpretations of the mission and values document, and at ~
:::
...
bringing to the surface tj1e conflicts involved in adhering to -<
those values. The workshop is held in groups of about 15 indi- 7J;;. 1:
:;
viduals from different levels. The modules are designed in such
a manner that people can express, without inhibitions, their
innermost prejudices about processes. I attended the first few
workshops, and still do whenever I am in Delhi. The extent to
which negative ieelings are purged is amazing. Each workshop
cleared the air over hundreds of personal dilemmas, enabling a
distinctive culture of openness to emerge.
Retreats are annual conferences held soon after the strate-
gic business plan for the financial year is finalised by the top
management. The plan, which provides data on expansion,
diversification, investment requirements, and profits and cash-
flow projections for the next year, specifies the thrust areas for
the year, depending on market conditions and availability of
resources. Participants are split into respective work-teams so
that their individual goals can be set in line with the strategic
business plan. Firmed up between a supervisor and a subordi- MISSION
nate, and prioritised by weightages for facilitating proper Tobeahighly.competitiveconsumer-oriented
enterprise.t40.1 or2 in eachproductcategory
appraisal, the goals are reviewed for mid-course corrections.
Since it is attended by everyone above the level of frontline
supervisor, the retreat facilitates networking and offers an
opportunity to build cross-functional support. Imust confess that is what worries me. Are these all that culture-
Critique sessions are problem-specific. They are initiated by building can deliver? Frankly, I don't know. But the exercise
employees themselves in order to resolve inter-group conflicts, has also brought problems in its wake. The increase in aspira-
with a person unconnected with the conflict being invited to act tion levels among employees, engendered by a more trans-
as mediator.! must also point out that we have taken several parent environment, has generated its own compulsions.
related initiatives to buttress the culture we're trying to build. While internal pressures for business growth are mounting, we
We refer to our people as members, and not as employees, in all need to find career opportunities for people commensurate
our internal communications. Everyone, including myself, is with their new aspiration levels. The fact that we are a flat
addressed by his first name. We invite vendors and distributors organisation-there are only five layers between the CEOand
to conferences and social events as part of the process of build- the supervisor-has diluted promotion prospects. Unless we
ing quality relationships with them. And under our Organi- build on ambitious growth targets now, we may not be able
sation Address and Open House systems, I personally make a to consolidate the gains of a value-driven organisation. We
presentatjon at the beginning of every financial year on the per- also have to deal with two basic misconceptions among
formance and the prospects. MayIhave your question, sir? employees: First, the management could be using culture-
What are the tangible benefits of this exercise? Is Darshan building as a tool for enabling a compliance mode in the organ-
a different organisation today from what it was in 1990? isation. And second, values represent the absolute truth,
Darshan is characterised by teamwork, openness, a learning providing no room for deviation. Not only have all the efforts at
environment which fosters continuous process improvements, culture-building not succeeded in dispelling these notions,
and a high degree of employee-involvement. Our turnover rate they have, in some cases, even emphasised them. Besides, all
has dropped from 25 per cent in 1992 to five per cent today, the line managers are spending a lot of time on culture-
compared to the industry average of 18 per cent. Our culture building, and we don't know where to draw the line. That's
motivates people not only to work hard for Darshan, but also to why, ladies and gentlemen, I'm not as confident about the
stay on. The findings of our latest feedback survey on value gains of culture-building at Darshan as I was even a year ago.
practices, conducted two months ago, show a positive value Thank you for your attention.
swing from 2.3 points in 1992to 3.15 points, out of a maximum Is Darshan putting too much emphasis on culture, .
score of 4. We have also launched several new products, with perhaps at the expense of strategy? Has the company gone
new-product development being a thrust area for the last three about culture-building the right way? Could it have done
years. We have improved our marketshare to 35 per cent in it differently? Is culture becoming an extension of the
coconut oil and 15 per cent in cooking oil, in the face of grow- CEO'Spersonality? Or does it really have a link with business
ing competition. And our turnover has gone up to Rs 365 crore strategy? Can it be an enduring exercise, adding value to
in 1995-96,from Rs 285 crore in 1994-95.Yes, I knew there business in the long run?
would be a question at this point. Yes, sir?
But couldn't you have achieved all this even in the normal . Case study by R. C HANDRASEKHAR. Refereed by the
course, without getting into this culture-building thinking? BUS I N ES S TO DAY Panel of Referees

152 BUSINESS TODAY. DECEMBER 7-21,1996

 1k~il)~i~;roday, ~~'~Q)b~r7 - ~1,1990
~ oJUII)e-5, NuJbh~r 13.. --,

CASE STUDY

Solution A
T
HE GENERIC at all levels, any top-driven initiative is bound to lose momen-
route that Oarshan tum down the line. Itis also true that a culture-building exercise
has taken, and the is usually rooted in a crisis situation. That is what gives it the
sequence that it has fol- necessary drive. That is also the reason for linking culture-
lowed are in line with what building strongly with strategy right at the beginning.
companies normally do It is also important to reiterate the linkage on a continuous
in the area of culture-build- baSis to sustain employees' interest over a long period. If the
ing. And although Oarshan linkage is weakened, the employees will not only interpret the
has gone about it in a struc- exercise in isolation from the company's long-term strategic
tured manner, it was goals, but also confuse it with hype, thus reducing the credi-
necessary to involve every- bility of culture-building. It is quite easy to create the excite-
one from the beginning. Of ment and tempo when times are critical and survival is at stake.
course, a manufacturing But once the desired quick-hits are achieved, complacency
. unit with a semi-literate
workforce is at a disad-
sets in, and the initial enthusiasm ebbs. Thanks to personal
CEO, growth, the key players move into new roles. The danger lies in
Citicorp Overseas Software vantage compared to, say, mistaking short-term wins, which are numerical-increases in
a software unit where revenue and marketshare, for instance-for long-term goals,--
everyone is, due to the very nature of the business, a knowledge which are intangible and non-numerical.
worker. The solution lies in working simultaneously towards The problems encountered in the wake of the success
flattening the organisation. The success of the experiment at achieved are typical. But the real danger is in the rituals insti-
Oarshan is, in no small measure, due to the fact that it has cut tuted. The open-house sessions, the group workshops, and the
across hierarchies and reduced the number of layers to just five. feedback surveys can become an end in themselves rather
It is equally important to establish a link with strategy from than mere tools to achieve strategic objectives. I would con-
the outset. Apart from giving an organisational focus, it will sider any transformation effort-like culture-building-
ensure that culture-building is not perceived as being driven by successful only when employees believe that their future is in
the CEO'Spersonal ambition. It is true that the exercise usually their own hands, and not in someone else's. That they, and no
starts off at the behest of a few. But unless the buy-in is secured one else, can shape their own destiny.
...

Solution B
T
HE CEO OF of his overall corporate strategy. However, Oarshan's CEOwas
Oarshan has done wrong in not involving the 550-strong workforce right from the
an excellent job of beginning. After all, it cannot be only the prerogative of the top
building culture in his and middle management to be committed to the common
organisation. The very cause from the word go. There is also a problem in appointing
fact that the turnover of a dedicated manager for organisational development (OD).Is
Oarshan has climbed 00 the responsibility of the head of the 00 alone? Isn't it also the
from Rs 90 crore in domain of the line managers? Granted, it is important to have
1988-89to Rs 365 crore in one dedicated resource to act as a specialised coach and
1995-96,with accompany- guide, and as a conscious custodian of organisational and HR
ing improvements in interventions, but every line manager also must own the
marketshares, is indica- responsibility for human resource development.
tive of the fact that busi- It must be remembered that culture-building is not meant
K. SWETHARANYAN
, ness interests have not to be hot air driven by the CEO'Sambition. Shared values and
been sacrificed in the organisational styles should be part of the strategic arsenal in
Chief Executive (Staff Affairs),
Modi Xerox process. On the contrary, every attempt at organisational transformation, and the best
culture-building has person to head this is the CEO.Culture-building can prove an
acted as a strategic tool for achieving superior business goals. enduring exercise in adding value to business-so long as it is
When building an organisation with people from different clear just what adding value to business means. For, the enter-
backgrounds, it is mandatory for the CEOto develop a unique prise must add value not only to the customer, who stands at
organisational culture. Hence, culture-building is an essential the apex of the triangle of stakeholders, but also to share-
part of organisational intervention. The dilemma over whether holders and employees who occupy the other two vertices. In
to concentrate on profitability and turnover or on culture- bringing about a cultural change, one enables employees to
building is a typical situation every CEOfaces. But no CEOcan achieve superior productivity and better business processes in
achieve his turnover and profitability targets unless he devel- order to increase customer and shareholder value. That's why
ops appropriate organisational intervention strategies as part culture-building is a means to an end, and not an end in itself.
.~\

156 BUSINESS TODAY. DECEMBER 7-21,1996

.- - - -
 BU5il)~5~ '1oday, 'P~'~1])b~r 7 - 21, 199Q
"olum~ 5, Number 23.

CASE STUDY

Solution C
T
HE DILEMMAS This is the premise-perhaps a little simplistic-on which one
being faced by should build a relevant structure. Although each company has
Darshan are rooted to find its own way, there are two common edifices on which
in two factors. The com- the premise must be built: one systemic and the other behav-
pany has not articulated a ioural. The former refers to numerous transactional processes
proper statement of intent in the company's value-chain. A framework of desired conduct
right at the beginning. The must be built around each of these processes. The second edi-
declaration that the com- fice refers to the creation of an environment in which everyone
pany seeks to "deliver cus- is in tune with the vision, mission, and values of the organisa-
tomervalue through build- tion. The two must synergise and operate in tandem. Onlythen
ing a value-based organi- will the culture-building initiative leave an enduring impact on
sation" provides neither a the company and its business results.
framework of what consti- Equally important is the link with strategy. The apprehen-
V.M. VARTAK
..... tutes corporate culture in sion among employees, to the effect that the company could
Advisor, the company's view, nor a be using the culture-building exercise to enforce a compliance
Mahindra-BritishTelecom reference point for man- mode, would have been minimised if the strategic link had
agerial action. It only been established right from the beginning. The experiential
furnishes a measure of performance. And there is little workshops could be used as a forum to correct the mis-
evidence to suggest that, five years into the initiative, Darshan conception. The fact that the employees are feeling free to
has been delivering customer value. The company has merely articulate their misgivings is a clear indication that the exercise
followed some steps-which, it must be said to its credit, are has generated a positive climate in the organisation. Oarshan
structured, sequential, and logical-towards creating an open should build on this small island of success. Once the linkwith
work environment. But the goal will become elusive unless the strategy is established, the line managers will not feel bur-
company does two things. It mustdefinewhat it means by cor- dened by HRDinterventions. Itwill automatically generate a vol-
porate culture. And it must get the linkage with strategy right. untary mode in the organisation. Culture-building is a long-
How does one define corporate culture? A basic definition drawn-out-and by no means easy-task. Oarshan is on the
would read: the way we do or do not do things in our company. right track, but it must fine-tune the effort in order to succeed.

Solution D
HE CEO OF DAR-

T
"What is in it for me?" as the bias in the document suggests,but
shan needs to be on "What can we do for each other?" It is not surprising that the
complemented on company is perceived by employees as merely being sensitive
his proactive approach. to individual needs, without creating an environment in which
Very few firms would pur- uncomfortable issues are addressed in an objective manner to
sue culture-building with facilitate a result-oriented culture.
the vigour that has charac- . Experiential workshops of the kind described take place
terised the effort at within a context. Today's context is a competitive envi-
Darshan. However, there ronment, demanding result-oriented actions leading to a
are some areas which healthy bottomline. While hierarchies and normal work-
need fine-tuning: interfaces break down during a workshop, creating tremen-
. The CEO'Soriginal con- dous bonding among people, what happens post-workshop?
cern was directed, cor- Sustaining the normative context involves extensive redrawing
ANEETA MADHOK
...... rectly, towards delivering of the boundaries of appropriate behaviour. This mayor may
value to the customer not happen. Chances are, it will not. Darshan should take steps
Professor (Organisation
Development), NMIMS through building a value- to minimise the possibility of its not happening by ensuring that
based organisation. How- participation in the workshops is voluntary, and that no peer
ever, all the subsequent efforts were designed primarily to pressure is brought to bear in this regard.
satisfy the second part of the objective:""-building a value- . The CEOof Darshan should re-examine his own role as a
based organisation. The need to deliver customer value seems change agent. He comes across as someone unsure of the
to have been missed out altogether. Culture-building was not route he has chosen. Unless the CEOis clear about his convic-
integrated fully with the company's business. tion and is firm about the goals, he will be unable to provide the
. The focus on "investing in mutually beneficial relationships inspirational leadership that organisational change demands.
with people" in the mission and values document seems to be The CEOshould examine whether the internal changes have
biased towards ensuring that everyone looks forward to a tan- impacted the customer. A value check with the customer is
gible benefit. Ideal working relationships are not based on necessary because he is the ultimate judge and jury. .