Bleeding public sector!

PC Sen in his article “An airline hijacked” published in the HT of 9th May 2011 has hit the nail right on the head. Both Air India and Indian Airlines that were airlines of repute till a few years ago and are now collectively known as Air India have hit the dirt. The reasons for the same may be many, yet the inability of the management to succeed in a commercial sector that is growing rapidly and is also inherently profitable cannot be but decried. Similar is generally the case with all government run hotel corporations that despite being part of an inherently profitable sector generally bleed to bankruptcy.

My two stints as a public sector honcho, namely the short-lived stint at the India Tourism Development Corporation and later at the Madhya Pradesh State Tourism Development Corporation have reinforced my belief that the CEO positions in public sectors are primarily leadership positions. Any CEO who does not appreciate this basic premise is bound to fall flat on the face and that is what has been happening regularly in the Indian public sector scenario.

PC Sen has rightly mentioned that the employees are the key to success of any organization and any organization that does not place the welfare of its employees as its primary focus shall rarely succeed. Unfortunately this has been happening with amazing regularity at most of the loss making public sector enterprises. Otherwise how can one explain the rationale of major staff related decisions taken without actively considering the genuine concerns and anxieties of the people who have to run the show – the employees. And these concerns and anxieties can be appreciated only if the top management is transparent, does not live in an ivory tower and has a direct line with the staff.

My stint at the India Tourism Development Corporation coincided with the aggressiveness that was then being displayed in the disinvestment of the public sector and also the 9/11 incident which affected tourism worldwide. The combined synergy of both the events made the revival extremely difficult, almost impossible in the eyes of many, yet the rapid turnaround that the company witnessed in 2002-3 was the result of a massive team effort, a team effort that even the junior-most of the employees identified himself with.

The iconic success of the Madhya Pradesh Tourism in finding its place in the big league of Indian tourism and also the unprecedented financial turnaround of the state tourism corporation was fuelled by the same employees of the once beleaguered corporation, who were earlier being blamed for the mess that the state tourism corporation was in. Posting over 30% growth per annum by a state public sector undertaking that had already hit the bottom and was being actively considered for a sell-off again proved that a turnaround is possible provided the top guy has employee focus and is committed to the growth of the company.

Any commercial enterprise, be it the local pan ki dukaan or a towering corporation is only as good as its leader, or in other words its top guy. The top guy has to have leadership capabilities and by his words and deeds, should be able to command the unquestioned loyalty of his men. Everything else is secondary, yet unfortunately most of the top guys only look upwards and display extreme keenness to be identified as the blue eyed boys of the powers that be. Blue eyed boys they become, but they lose the company and that is what has happened with most of the commercial enterprises that have rapidly gone downhill.

The top guys also have to be able to distinguish between the “effort to deliver” and the “decision to deliver”. While the effort part is good and appreciable, the decision part is almost mandatory. Unless the company led by its top guy decides to deliver, the effort will almost always never bear fruit. It is also sad that generally, the top management gets busy in the “how” and remains busy in the same while the corporation continues its downhill slide. What the top guys fail to appreciate is that the “will” to turn around is far more important than the “how’s” and “why’s”.

And lastly, any commercial enterprise that works in a competitive environment, howsoever profitable the sector may be, has to have its foundations firmly in the ground, grouted in value systems that are universally accepted as good and also good practices. Corruption, drinking on duty, indiscipline and sexual harassment are ills, the eradication of which should remain foremost on the agenda of the top management that would invariably need to lead by example to succeed.

The public sector enterprises are businesses like any other, the only difference lies in the ownership pattern that is vested in the government. The success or otherwise of any business depends more on the top guy than on the ownership pattern and this is a hard reality that needs universal acceptance.