Public Sector can Excel!

The public sector enterprises have miles to go and they can provided...............

That ITDC the only central public sector enterprise in the hospitality sector is deeply in reds is a news that saddens yet reflects the state of the nation. On a lighter note one feels that a lot of effort must have gone in over the years to achieve this distinction considering that the hospitality business is inherently and also highly profitable. The reasons for the debacle indicated in the news item are simply unacceptable.  

It is indeed sad that the latent strength of the temples of modern India, the Indian public sector enterprises lies untapped even after over sixty years of existence as a free nation. It defies common business sense that many of these commercial enterprises set up with public funds and backed by the state are underperforming yet many of them continue to do so. The reason lies in inept management as generally the apex level positions are filled not based on performance or leadership traits but on other criterion or considerations. That the shades of ownership and mere technicalities are not issues that matter and what really matters is the commitment, zeal and integrity of the top guy is a fundamental premise that needs widespread acceptance.

Air India and ITDC are text book examples of profitable business enterprises being bled to death by inept managements. Despite the general public opinion being to the contrary, blaming political masters or the external environment for the ills of the company merely diverts attention and shrouds the real causes. The fact remains that the companies act and the memorandum of articles of the enterprise sufficiently empower the chief executives to ward of any hostile threats to the efficient working of the enterprise, yet in many cases the chief executives either fail to lead or else succumb to pressures and attractions. 

My stint as the head honcho of the Delhi division, the largest division of the mighty railway system of the country firmly reinforced my belief in the goodness and the immense utility of men at large. It also reinforced my belief that the primary problem of the nation is neither the politicos, nor the unions; it is the bureaucracy that with passage of time has evolved into a self seeking organism. The bureaucratic clan indeed has to take the major blame for the pitiable condition the nation and organizations like the ITDC and Air India find themselves in.

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 reinforced my belief that 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. Giving a short shrift to this premise while making selections for apex positions ensures a mediocre future existence for the enterprise, a situation not healthy for the economy.

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 an almost impossible exercise, yet the unprecedented 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. Doubts over the ability of the public sector to perform at par or even better than the private were also successfully laid to rest.

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 year on year 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 qualities 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 gone downhill or are performing below par.

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. That the “will” to improve is far more vital than the “how’s” and “why’s” needs appreciation.

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. Stamping down corruption and other vices should therefore remain the principal focus of the chief executive who should lay this issue on the table and lead by personal example.

The public sector always attracts criticism on grounds of non-performance due to sarkari ownership. Yet with sound commercial sense, the ownership pattern can turn out to be the biggest strength of the company provided the CEO has leadership traits. He is the pivot and he is the one who can take the company forward or sink it. The buck like in any commercial organization stops at the chief executive even in a public sector undertaking.