In 1982, Ramachandra Shah, the Managing Director of Gopal Cotton Mills in Ranchipur, went to Japan on a trade mission. On his way back to India, he visited several South East Asian countries for a survey on Indian textiles. In the course of his conversations with many merchants and customers, he learnt that they preferred Japanese as against Indian products, owing to their flawless weave. Customers were not interested in buying Indian goods which were manufactured on non-automatic looms, and were therefore repeatedly flawed. Shah decided to introduce automatic looms in his mills.
Upon his return to Ranchipur, Shah drew up a plan to build a new loom shed for automatic looms to replace one of the existing loom sheds. This otherwise obsolete shed was hot, humid, poorly illuminated, and very noisy. The machinery was old, encountered numerous breakdowns, and caused accidents. He consulted the weaving superintendent about the plan. Later, he summoned Shankarlal, the supervisor of the shed due for replacement, and explained the new system to him. He also told Shankarlal that he would be considered for promotion as soon as operations commenced in the new automatic shed.
The loom shed to be replaced was the smallest of the three in the company compound. It had a hundred looms running in two shifts. All the weavers working in this shed pertained to the Gujarati Patel community. In line with tradition, each jobber (mechanic or first line supervisor) selected his own workers. So, a jobber brought workers from the rural areas of his own community. All the weavers in Shankarlal's department lived in the same locality, and almost all of them had been working in the shed for at least ten years, and some even for 25 years. Shankarlal belonged to the Patel community himself. Although he lived in a different part of the city, he joined the weavers during festive occasions when they held sing-songs or performed dramas. Weavers from the other sheds stayed away since they hailed from different communities.
Irrespective of the old machinery, the numerous breakdowns and accidents, the workers were proud of their loom shed. They boasted that even with such old looms their production was higher than that of the other sheds with newer looms. Each worker minded two looms and was paid according to his output. He had no helper to assist. When he had to leave his looms running while he went to bring bobbins, carry cloth, visit the washroom, drink water, or talk to people, his neighbours would look after them. In fact, the workers took turns to go out for a break, and a group could always be found outside away from the noise, talking, smoking, and drinking water. Although the management was not in favour of such a practice, it had survived all despite all efforts.
Shankarlal made it a practice to make two rounds in the loom shed every day, and to talk to any worker in duress. Several times on each day, he stood outside the door of the shed and chatted with workers who were coming in or going out. Many weavers consulted him about their personal problems. When the Managing Director or the Superintendent were seen approaching on their rounds, Shankarlal passed the word to the workers so that they could go back in time to their looms. When any of his workers were summoned to the folding department due to poor work, Shankarlal went along to plead for them, to minimise the fines imposed on them by the folding clerks.
The erection of the new loom shed was completed in September, 1983. It had the latest lighting and humidification equipment along with comfortable washrooms and toilets. The machinery consisted of looms driven by separate motors, and was spaced more generously than in the old shed. The plan specified one weaver to 8 looms. Each weaver would be assisted by a helper to take care of all the auxiliary work, so that he would not have to leave the looms at all. The weavers were to be paid as per their output. The helpers would be paid a fixed wage lower than the weaver's pay. All the workers from the old shed were needed in the new shed, so the question of retrenchment did not arise. They would be either weavers or helpers. Those having the longest service with the company would be weavers. All these points were covered in an agreement made by Shah with the labour union to which 60 percent of workers in the shed belonged.
Shankarlal went around and talked about the new plan to the workers individually and in small groups. He told them about better working conditions and assured them that their earnings would be higher than before. He also told them that helpers would be given weavers’ positions as soon as the older weavers retired. But, even after devoting an entire week to convince the workers on the advantages of working in the new shed, only 16 workers agreed. This number was too small to start the new section. For two more weeks, Shankarlal kept up with his efforts to persuade the workers, but he received a rather poor response.
At the end of this period, Shankarlal was called to the Director's office and asked to explain the situation. Shah told him that the workers would be given an ultimatum - if they were unwilling to abide by the agreement made between the company and the union, new workers would be recruited.
Back in the shed, Shankarlal told the workers regarding the Director's decision. As far as he could judge, the workers were adamant in their refusal, and were unafraid at the threat of losing their jobs. They hardly stayed to listen to what he had to say. They raised no questions, and were altogether silent in his presence. This silence became characteristic of the relationship between the workers and Shankarlal. They no longer came to him with their problems, and if they saw him outside the shed, they would either stay away from him or go inside.
After a week of his conversation with Shah, Shankarlal summoned a meeting with the workers, and spoke about the importance of the new shed. He told them that foreign competition forced the company to have automatic looms, and whether they liked it or not - they should try out the new idea. He finished his talk by asking them for any questions related to the change. Nobody spoke and the meeting broke up. The next day, Shankarlal put a notice signed by Shah. It stated the terms of agreement with the union, and set a limit of seven days for the workers to agree to work the new looms.
During that week, the workers were persuaded by the union leaders to work in the new shed and they finally agreed. At the same time, the company proceeded with all arrangements to start the new section.
On the eighth day, after the notice was put up, work commenced in the new section. The changes went according to plan. Shankarlal was promoted as Assistant Weaving Master and was made the section in-charge. He was very satisfied to notice that the production climbed steadily. Within two months, the shed had reached the target of 88 percent efficiency. He cut down his rounds in the loom shed, and spent as much time as he could with the expert technician from the firm that had supplied the looms.
But an increasing amount of his time was consumed in listening to complaints from the workers. The complaints were mostly about bad working conditions: the walking distance between looms was too great, the yarn breakage rate was too high for automatic looms, the light was too glaring, the toilet and drinking place were in the same room, and so on. Production dropped to 84 percent efficiency. Shankarlal made it a practice to check the production of individual workers and to call those whose production was lowest to his office. He asked them to explain the decline in production. In reply, the workers stated more grievances.
One day, three representatives of the workers came to his office. They told him the mills profited enormously from the automatic loom weaving, but the workers were not getting their due share. Shankarlal replied that installing the new shed had cost a lot, and the company could not pay higher wages. The representatives left without any argument. A week later, the workers went on strike. When Shankarlal arrived at the mill at 7:00 a.m. as usual, he found all the workers entering the old shed. Shankarlal saw that the management had removed the unused looms from the old shed. The workers sat down on the empty floor, where each one’s loom had previously been and refused to move. They said that the old loom shed should have been kept intact, so that they could have gone back to their old jobs if they wanted. They threatened not to leave the floor until all the old looms had been replaced.
At the end of the third day of the strike, Shankarlal fell ill. He complained that the humidity of the loom shed had affected his lungs and took a month's leave. When Shankarlal returned to work after a month, he learnt that the strike had ended through the persuasion of the union leaders, and the assurance from the company of higher rate of pay for the workers. But, production was down to 80 percent, and at this level, the earnings of the workers were less than before, in spite of the rise in the rate.
One week later, Shah replaced Shankarlal as Assistant Weaving Master. The new man was a technical graduate with four years’ experience in automatic loom weaving. Shankarlal was offered a new job - Assistant Weaving Master in charge of 'Labour Control' for all three sheds. He readily accepted it and assumed charge of hiring and firing workers, taking disciplinary action, carrying out drives for higher production, and keeping the superintendent and the director informed on all the labour-related issues.
Case Study by Dr. Prageetha G Raju is an Associate Professor of Business Management at Symbiosis Law School, Hyderabad Campus, a constituent of Symbiosis International (Deemed University). She can be contacted at [email protected] or [email protected]
Analysis by Ravi Mishra, Senior Vice President-HR for Global Epoxy Business, Aditya Birla Group
It is indeed a wise decision by Ramchandra Shah to switchover to automated looms, a thought driven by good intent and right content. This is an important business call to move forward with the times and sustain the business in terms of market requirement, and at the same time, enhance the quality of life at the workplace. This validates his leadership quality to take a wholesome decision, keeping the purpose of business endeavour in mind to make heed. The quality and capability of such decision-making puts him in a distinct position. Shah took that call decisively in the interest of the organisation, but he underestimated the challenges to drive the change management. Initially, he was largely dependent on Shankarlal to persuade the workmen on the benefits of this change. Here lies the difference since many salesmen are unable to sell good products and vice versa. The organisation needed to have a robust strategy of communication to influence and engage all interested parties and stakeholders to drive the change successfully.’’
Upon scrutiny, Shankarlal indicates a lack of assertiveness on his part in being unable to put forth his viewpoints strongly, when the workers shared their apprehensions behind the change initiative. At times, he gives the feeling that though he had been given a supervisory role, his intellect remained that of a conservative weaver. When a person is given bigger responsibilities he must adapt to the needs of the role very fast.
One of the critical success factors that Shah failed to focus was to work out a formula to combine the rate and productivity in such a way that the earnings of the weavers were not lesser than what they were getting previously. Shah should have understood the fair expectations of every employee, and addressed it with sensitivity and sincerity. Employees at the bottom of the pyramid should be taken care of with due perspective.
It would have been better if Shah had initiated the first communication at the organisational level to address the rationale behind the proposed changes, and its impact on the future. He needed to emphasise the compelling situations for him to take this call in every one's interest, else the organisation would go the "Kodak" way. Shah did not compromise when the workers were initially non-supportive while taking the route to strike and displayed their muscle power. The management was also liberal in terms of promoting Shankarlal, and providing sufficient time and opportunity to take the workers/ weavers to align with this change initiative. Once it did not work, Shah churned out a Plan B to implement the management objective.
It is always a challenge to drive employees so that they get convinced of a change initiative. In many cases, workmen always see most change initiatives with the apprehension that their job may be at risk, or will require new skill sets - a challenge to learn at that stage. It is normal to take some time to pursue and build confidence among employees during such change initiatives. It would have been appropriate for the company to come about with a robust plan and to take proactive communication tools to build confidence among the employees - particularly the workmen - that irrespective of the consequences, they will not lose anything in terms of their job or earnings in the new system. Secondly, they needed to emphasise the fact that it is high time for change, else they would be decimated like many of their competitors. Change is meant to benefit every stakeholder to sustain and thrive upon. We need to explain employees with the real-life data of the organisation regarding the benefits and the need for change initiatives.
Analysis by Rohit Hasteer is the Group CHRO for Housing.com, Prop Tiger.com and Makaan.com
Ramchandra Shah's leadership is a combination of Laissezfaire and an autocratic style. He is not shy to adopt new measures and make decisions to improve the business, but his ability to take the team along and create a buy-in is questionable. And he expects Shankarlal to drive his vision to the last man on the ground.
Here are a few things that he could have done to bring about a better transition.
Connect not communicate: Shah needs to understand his people and look at them as more than employees. The workers are rooted to their community and look at the workplace as a place beyond their daily living. These are people who may not exactly be holding high aspirations or excitement to work on new technologies. Hence, instead of selling them the automation and insights, he should have articulated as to how it can help them spend quality time with their family, and improve their quality of life.
Flat-Tyre leadership: Instead of relying on Shankarlal, Shah could have taken the lead, and made the effort to personally explain that everyone in the community would grow. The novelty of the Managing Director reaching out to his people personally would have a significant impact. Ideally, both of them should have come together to drive this change, since Shankarlal's connect with workers could nicely gel with Shah's finesse and conviction to create a smoother transition.
Poor management led the union to play the critical role of securing the worker's interests and distancing the management and the people on the ground. Dissatisfaction, low motivation among workers, and the feeling of being disassociated from the mill led to the creation of a 'Labour control' department, which only did the job of solving people grievances. However, if change was well-managed, automation and the company's growth should have brought more prosperity, engagement, and lesser grievances.
That said, one cannot deny the challenges that Shah and Shankarlal had to face due to the deep-rooted, inherited, and old-school mindset of the workers which are extremely difficult to combat and change. The resistance to change due to the workers' inability to get out of their comfort zone was another roadblock for a smooth change. Even though the old loom shed was inhospitable and the machinery old, the workers were proud of the place, and boasted about better productivity than the other sheds with newer looms.
Resistance is the initial reaction to any transition. In this case, the transition was not merely about process automation, it was more about changing the mindset and belief of a group of people by sharing clearly the 'WIIFM - What is in it for me'. It was required that they were spoken to in a language understood by them.
Leadership: Leadership was the biggest piece missing here. A leader needs to have the smarts to know their audience, and create a narrative that appeals to a larger group and makes them feel included. Creating opportunities for people to speak their mind and be a part of the change as against being observers or impacted by the change is not sufficient. A powerful story that gives people the reason to change is the biggest tool to any transition.
Person first, Process later: Any transition needs to be focussed on people who will drive the change. Shah should have first spent ample time with the union leaders and Shankarlal, and made them advocates of change. Involving high influencers within the worker community can also be a good idea. The moment they witness one of their own advocating the change, there is a greater acceptance. Breaking barriers and connecting with people on the ground is paramount for such transitions.
Uncertainty and Grapevine: It is crucial that there is ample space and time for changes to kick-in, and people get opportunity to digest the change, that there are people at responsible positions to answer all queries, and there is communication to ensure that there is no negativity among the people. As the Managing Director, conducting a town hall, or meeting people through informal channels to promote transparency and clarity will ensure there is no negativity due to uncertainty and grapevine.
Finding a common ground: One of the most critical elements of change from a people perspective is finding a common ground to secure a winwin for both parties. Clearly demarcating points that help people in areas that matter to them can work wonders in making a smooth transition. Organically, change can blind people of the benefits because the process of change can be taxing, and hence it requires someone at the leadership level to bring their focus back on the benefits that they value and receive as an outcome.
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