Organizational Excellence SAIL story

8/12/2019 Organizational Excellence SAIL story

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MY SAIL MY PRIDE- strengthening the sense of belongingness &

pride in SAIL and contributing to the organisations quest for

achieving global excellence.

24th

January 2027 WORLD STEEL DAY. A very special day & proudmoment for SAIL collective, when its progress was recognised by the world and

honoured by celebrating SAIL foundation day as World Steel Day from 2027

onwards. Today, eminent personalities, media, foreign counterparts have all

gathered to celebrate this occasion at Vigyan Bhavan New Dehli. All were keen to

know the strategy adopted for SAIL spectacular success. World Steel Association,

called this strategy as, Soft & Silent Vision 2025 which complemented its

technical Vision 2025. SAIL was now among top 3 Indian company & among top

50 global fortune 500 companies.

After declaration of Vision 2025 SAIL top management realised, the people

thread is what prepares an organizat ion to c omp ete and win , and employee

engagementthe emot iona l commitment of employeesis a t remendous

compet i t ive advantage that impacts the bottom l ine when strategical ly

managed. Ninety-nine percent of failures come from people who have the habit of

making excuses.

To make employees passionate about SAIL Vision 2025, and contribute

towards Delivering Excellence SAIL decided to develop, measure & improve

entrepreneuria l culture in the com pany . It was measured mandatorily through

performance appraisal every 6 months. Index was specif ical ly developed for th is .

Additionally five supporting measure to enhance entrepreneurial culture

catering to specific keyfactor, were adopted. These 6 measures together w ere key

drivers of SAIL suc cess, being cal led asSoft & Silent Vision 2025.

Five Supporting Measures to enhance entrepreneuria l culture were:


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1. Post Promotions now based solely on merit within predefined role structurehowever, pay grade was released timely with some stagnation.

2. Additional Focus on developing future strong leaders by Cutting edgetraining to selective potential employees with higher entrepreneuria l

cul ture.

3. Al l dev ia t ions to qua l i ty measured in cost terms, through Cost of

Quality(COQ) system, to see poor quality impact on Income.

4. Company adopted e-mode financial transactions and e-file management

system to considerably reduce on logistics and time taken for decisions.

5. In four metros, CMO Regional Offices, served as central unit, with multi-plant

inspection group & one import clearance group. This improved rapport among

plants/CMO with huge savings on resources.

We now invite, SAIL management to address, this august gathering & elaborateabout entrepreneurial culture, its index and five supporting measures used forunlocking excellence through employees contribution(presentation accompanied)

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Good Morning to all the esteemed guest and my colleagues,

First of all I congratulate !!! all my SAIL colleagues for this honour of

celebrating 24th Jan as World Steel Day. In the past decade, we have certainly

moved in a very systematic way towards world class corporation.

SAIL made an act ion plan to develop upon and continuously measure

entrepreneurial culture through an index. This was done as a strategic proactive

measure to improve upon bottomline by delivering excellence in all

processes and activities done.Survey of 430 US companies in 2013 revealed the

advantage of entrepreneurial culture as tabulated below :

ADVANTAGE OF ENTERPRENEURIAL CULTURE 430 US COS SURVEY-2013

entrepreneurial culture increases %

Customer metrics 10

Productivity 21

profitability 22

Avg 3 yr revenue growth(without this it is 8.9%) 20.1

Higher than avg shareholder returns 22

Effectiveness increase of employees 57

Earning per share w.r.t competitors 147

Better growth trend w.r.t competitors 90

entrepreneurial index > 50% , success rate increase 2 timesentrepreneurial index > 99%, success rate increase 4 times


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entrepreneurial culture reduces %

absenteeism 37

Theft(shrinkage) 28

Safety incidents 48

Quality incidents(defects) 41

Let us f i rs t un derstand what is ent repreneur ial cu l tu re and w hy i t is so

impo rtant ??

Entrepreneurial Culture is the Culture where people and organizations worktogether, to implement an idea through the application of creativity, drive andcalculative risk. It addresses the political and commercial aspects ofimplementation at various levels. It has to identify the key factors and the roleeach one play within a policy framework.Each member has to St imu late, Sustainand su ppo rt entrepreneuria l cultur e in the org anizat ion.

Its impor tance l ies in the fact , i t makes emplo yees feel emot ion al ly

connected to the organisat ion, understand what it takes to help the

organization succeed, and drive for that result. Increasing an organizations

entrepreneuria l index had positive impact to fuel operational excellence,

innovation, and the ability to compete.

How we measured entrepreneuria l cultu re & set path for i ts impro vement ??

Based on its policy framework and requirement of technical Vision 2025 SAILindentified 9 key factors with differing weightage to develop Entrepreneuria l Index.All 9 key factors need not require equal focus, and are complementary to oneanother

INDIVIDUAL(supports) % TEAM(stimulates) % SYSTEM(sustains) %

1. Innovation 10 4. Leadership 15 7. Resources on time 15

2. Proactive BusinessFocus

10 5. Quality Culture 15 8. Improving valuechain

5

3. Reward & Motivation 10 6.Productivity

Culture

15 9. Social Infrastructure 5

TOTAL 30 45 25

Entrepreneurial Index scale of 0-400, signified four progressive culture stages as mentioned

S.No

Score Name of Culture Inference w.r.t. Company working.

1 0-100 BUREAUCRATICFUNCTIONARY

These persons are pessimistic, self-centered, powerhungry & autocratic, almost working negatively toentrepreneurial culture

2 101-200 SATISFIEDMANAGER

They are happy with the routine, till nothing is expectedout of them. There indifference towards any changes,


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harms the culture3 201-300 POTENTIAL

ENTREPRENEURThese are the people of all positive traits, but as theydont have the courage to change thesystem, they getfrustrated easily. Such people when given properenvironment & support, can achieve marvellous heights.

4 301-400 ENTREPRENEURIAL CULTURE

They always exhibit enterprising behaviour & areJEWELS AMONG THE LOT.Their potential cannot betapped if they are small in number

Entrepreneuria lculture was than measured by appropriate questionnaire(not tobe repeated in 5 yrs), designed to seek views on key factors. Questions seekingviews on actual cases were also incorporated,to evaluate readiness to changewith the changing business environment. Entrepreneuria l Index quest ion naire wasmade part of performance appraisal system to b e mandatori ly f i l led by every

of f icer and lat ter by sup ervisors also every six mo nths. This step pro ved to be

a milestone for turnarou nd o f SAIL.

Further detailed characteristics of each culture useful in questionnaire design are tabulated.

Characteristic BUREAUCRATICFUNCTIONARY

SATISFIEDMANAGER

POTENTIALENTREPRENEUR

ENTREPRENEURIALCULTURE

INDIVIDUAL(supporting role)

Innovation working negativelywithholdinginformation,resources.

Notinterested

Creative but notinnovative

Creative as well asinnovative, aligned withcompanies &customers

requirement.ProactiveBusiness Focus

Self centred Not bothered Has business focusbut not able to en-cash uponopportunity

Has vision, idea &ability to turn them inreality

Reward &Motivation

Power hungry & notsatisfied withrewards &motivation

Motivationverytemporary.

Motivated with theseat the same time theirabsence frustrates

Self motivated butrewards enhancespersistence power.

TEAM(stimulating role)

Leadership Autocratic &coercive leadership Do notbelieve inleading

Intermittently workingfor this. Guided by thesevalues.

Quality Culture Hampersproductivity

MaintainStatus quo

Maintains &sometimes try toimprove.

Always trying toenhance it.

ProductivityCulture

Hampersproductivity

MaintainStatus quo

Maintains &sometimes try toimprove.

Always trying toenhance it.

SYSTEM(sustaining role)

Resources on

time

No faith in any

improvement

Not

concerned

In due course Fire

fighting may improve.

Well planned

continuousimprovement.


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Improving valuechain

Too much attention& devotion of timeon doing nothing butcribbing

Satisfied withthe facilitiesavailable

Give requiredattention & try tomaintain

Attention & devotion toimprove upon it, withinresources.

Social

Infrastructure

Concerned about

only his interest.

Not very

particularabout time

Try to utilize

resources &unavailabilityfrustrates him.

Optimum utilization of

available resources,Outsourcing if requiredin time.

I am proud to say that today none of the areas have Entrepreneurial

Indexless than 360.

Now let us understand how we enhanced Entrepreneurial Index through 5supporting measures ??.

SAIL main aim was to shift people with Potential entrepreneurial culture toEntrepreneurial culture. In a unit level officers including supervisory category, the ratio is20:80 of manpower. This 20% core-group of officers and supervisors was nurtured to spear-head the cultural change, and spread it into the whole organization. Other employeesmainly unskilled learnt from these role models.

After analysis It came out that 5 of the 9 key factors covering 60% weightagewere weak link to Entrepreneurial culture. SAIL specifically developed value adding,measurable improvement steps, we call as five supporting measures. Key factorimproved through them were

1. Reward & motivation----------weightage---10%2. Leadership-----------------------weightage---15%3. Quality Culture------------------weightage---15%4. Resources on time------------weightage---15%5. Improving value chain--------weightage---5%

For reward and motivation, We decided, to release Post Promotion tomeritorious officer only & within predefined role structure with no of personsdetermined with the help of IED. Monetary benefit paygrade was howeverreleased with some stagnation. Previous timebound seniority based promotionpolicy, led to too much fragmented groups within the department/sections. Superiorsunder compulsion promoted non performing officers for the fear of backlog, blockingjunior batch officers. There was less cooperation with same grade I/charge officer,with awareness that their appraisals will be filled up by higher grade officer only. Nowassurance of merit receiving due rewards prevailed.

As a second supporting measure we made strong leaders, through a month

long Cutting Edge Training. It was given to individuals with high Entrepreneurial

Index. Employees drawn after 8-10 yrs and 20-22 yrs experience. Training included

tenacity development, outdoor activities, even camping, walking on fire, lifestyle

management, as it started from 6am with yoga and went upto 9pm each day. Idea


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was taken from oil sector. Further it led to individual monitoring and relationshipdevelopment among future leaders.

Next to brand SAIL as quality steel company we internally established Cost ofQuality System(COQ). Quality culture was developed for eliminating waste and

providing value addition. Waste can be from overproduct ion, wait ing t ime,transpo rtat ion waste, pro cessing w aste, inventory w aste, waste of mot ion and

waste f rom product defects. These wastes were identified measured andmonitored through Cost of quality(COQ) system. By measuring quality in financialterms, the COQ system allowed management to create a major cultural changeby using terms familiar to everyone- the bottom-line. COQ was most helpful formiddle managers to see the consequences of poor quality on overall income.The system was able to express costs under four categories:

1. Prevention Costs :costs incurred to prevent non-conforming units from

being produced.

2. Appraisal Costs :costs incurred to ensure that materials and productsthat failed to meet quality were identified prior to shipment.

3. Internal failure costs :scrap costs & costs incurred in correcting errors

caught at appraisal, before delivery of the products to the customer.

4. External failure costs:costs incurred in correcting errors after delivery

of the product to the customer.

All cost were not tracked at the same frequency. Internal failure were reported more

often than indirect cost.Thus SAIL developed quality culture with framework

for

Collecting & recording non-conformances

Collecting this data in a suitable database

Sorting the data from several different perspectives Using the data to drive the corrective action process efficiently..

In the fourth supporting measure, we improved logistics, decision making andto have resources on time, by adopting 100% e-mode financial transaction system &e-File Management System (EFMS). All money paid and received electronically. Thisimproved fund management, reconciliation and transparency with less manpowerand resources. e-File Management System (EFMS) on Lotus 6x platform, reduceddecision time and overall order cycle and inventory management. Additionalbenefits of EFMS were:

1. storing and retrieving information2. It allowed discussion with approval & protected originality of documents

through versioning.3. It helped integrate business process workflow into a document

management system where information is available in a flash with accessrights management, eliminating the risk of misplaced documents.

Last measure was to improve rapport among plants and CMO. All Plants unitoffices of metro cities were merged together to form multi-plant inspection groups


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Documents

Organizational Excellence SAIL story