Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Tuesday 18 November 1986

HUMAN RESOURCE MANAGEMENT

Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave). 

18 Nov 1986

To:
Dear Colleagues

On 10th & 11th, October, 1986, I attended a PHP Seminar on,

"HUMAN RESOURCE MANAGEMENT - PHILOSOPHY &
PRACTICE OF KONOSUKE MATSUSHITA"

(Founder of Matsushita Electric Industrial Co. Ltd., Japan)

PHP lnstitute was  founded by Konasuke Matsushita and stands for Peace, Harmony, Prosperity.

At the age of 92 years, Konosuke himself still takes keen Interest in the working of the Institute !  He does not have much time or energy now for directing the operations of the Yen 5 Trillion (Rs.4,190 Crores) Matsushita empire, employing over 1,00,000 employees world-wide in 178 companies - an empire which he started as a small company 68 years ago !

But Konosuke's Human Resource Development philosophy still pervades the entire organisation.

One member of Matsushita organisation is located in Baroda and known as Lakhanpal National Limited (LNL).  Erploying around 700 persons, LNL was set up in 19/3 to manufacture dry-cell-batteries, under the brand name "NOVINO".

In the October Seminar, Mr. Ono, the Joint Managing Director of LNL read a paper describing how LNL has set-about transplanting the Matsushita Philosophy on the Indian soil - and in a limited manner proving that,

"Human nature is same all around the world and what motivates a Japanese worker also - and equally - motivates an  Indian Worker".

If you wish to find out "what", please read the enclosed paper of Mr. Ono.                                             
Encl:
APPLICATION  OF  K.MATSUSEITA'S  MANAGEMENT PHILOSOPHY
ON HUMAN RESOURCE DEVELOPMENT IN INDIA

Hajime Ono
Loint Managing Director
Lokhanpal National Ltd.
                                                                                    
Firstly, I would like to thank XAL Human Growth Centre and the PHP, for having given this opportunity to speak before you.

 brief HISTORY

I would like to begin by briefly discussing about our Company's growth since its Inception.  Our company, Lakhanpal National Limited, started production of dry cell batteries in July 1973 at Baroda.  It was in the year 1969, that our late Prime Minister, Mrs. Indira Gandhi, visited Japan. While there she visited the Head Office and one of the factories of Matsushita Electric Industrial Company Limited and also met its founder Mr. Konosuke Matsushita. She was greatly Impressed by Mr. Matsushita's business principles and his philosophy during her visit there.  It was her enthusiasm that prompted Mr. Konosuke Matsushita to provide technical assistance and cooperation In India.

It was in the year 1971, when late Mr. D.D. Lakhanpal (founder of Murphy India Limited) obtained an industrial licence for manufacturing dry cell batteries. He was In the process of evaluating various prospective partners to get the technical assistance, when he came across M/s Matsushita Electric Industrial Company Limited (MEI) of Japan.  The late Mr. D.D. Lakhanpal very much appreciated the business philosophy of MEI, and in return MEI also thought highly of his ideas and thoughts as an Industrialist.

The project was conceived at the time of Bangladesh War, when long spells of blackouts In the country led to an acute shortage of dry cell batteries, and turned battery markets Into a sellers paradise.  This temporary boom was reflected In the project report, envisaging 100% capacity utilisation in 3 years time.  But it was too optimistic to be true.  Very soon the war boom was over and we faced stiff competition In the existing market.  Factory construction at Baroda finally began in August 1972.

'NOVINO' — An Unknown  Trade Mark

During that time in India It was not possible to register 'National' as a trademark.  Moreover, use of foreign trademarks was also not allowed.  Under circumstances, the company decided to use 'NOVINO' as its trademark.

Another company of MEI in India, i.e. M/s Indo National Limited, also started under similar circumstances.  In other countries MEI established factories as joint
venture or wholly-owned subsidiaries, sometime after products had already been marketed in those countries under the 'National' label.  Thus there was already a strong  market channel and brand awareness existing in those countries.  In India, however, due to severe restrictions on the importation of electric goods, 'National' products were not normally available In the market  place, although many people In urban areas knew about 'National' and  'Panasonic' products since these were available as smuggled goods.  Yet we could not take advantage of these well known brand names and had to start with an unknown and new brand name 'NOVINO'.

Duster —  An Important Tool for a Salesman 

Other than the installation team, four people were dispatched from MEI-Japan for a period of 2-4 years.  One of these persons was responsible for market development.  This sales engineer went to all parts of the country and visited shops personally, explaining the finer points of our product.  During his shop to shop visits, he would introduce himself first and then start service. He would first try to 'sell' himself Instead of the product, cleaning the counters in shops and rearranging products for better display.  This act of courtesy and service to the retailer set an example for the Indian Staff Members who always accompanied him.  Even today he is remembered fondly by all concerned.  For sales people this is the most effective and essential part of Personnel training.  It is said that our salesmen's most important tool is a  'Duster'.

Quick Implementation of the Project

The factory started commercial production and put the first consignment on the market within a year of the stone laying ceremony, i.e. In August 1972, a remarkable achievement which gained the respect of everyone In the community.

Initial Difficulties But No 'Lay Off'

Even though production   started smoothly, sales did not expand according to the planned projections.  We had to face the giants of the Industry of that time, many of whom had a large market share and a long history in the marketing  of dry cell batteries.

Moreover, the oil crisis caused a dramatic downturn in the world economy In the year 1974.  The battery Industry in India also had to face a very tough time.  Consumption of batteries declined constantly for a period of 3 years, and. It took nearly 5 years to return to 1973 levels.

In May 1974, we produced only 30,000 pcs., a scant 2-hours worth of production.

The future looked bleak and uncertain, but we knew we had to think  of ways to avoid layoffs, as layoffs would affect the employees and their families most adversely.  Despite the scorching heat in the month of May, everyone went all out to do what they could to improve the situation.  Our female employees carried 2 boxes of batteries, weighing about 5 kgs. each from house to house in town to sell them.  Routes were organised dally In different parts of the town.  On the other hand, our male employees, worked hard on the open space in the factory premises.  They levelled off the uneven ground, laid down a lawn and constructed a guard room at the factory entrance.

During those difficult days, our people had to bear up under pressures from the outside community as well.  Our factory is situated at N.H. No. 8 and while our people were digging or levelling land, passerby made taunting and sometimes abusive remarks.  But such remarks were Ignored by our employees who all continued to work as a team, with no distinction of-class or status.  We discovered an immense joy in pooling our efforts to complete— these tasks inspite of the hardships.  This was a most valuable learning experience for all of us.

If my memory serves me well, it was' in May 1973 that our machines were Installed.  May being the hottest month, it was hard to cope with heat at first.  During the first 3-6 months six people came from Japan to install the machines and to teach and train our staff members.  They took the lead In doing the actual work and spared no effort to educate our people.  The majority of our people in charge of various functional areas today are those who worked along with the Installation team during those days.  I still remember clearly the greasy black hands and uniforms of these people after a day's hard work.

Language Barrier

One of the problems we faced at that time was that the installation team could converse in Japanese only a language which was not understood by local staff members.  This made communication very difficult.  Moreover, this also created many misunderstandings with the local staff members.  The Japanese installation team applied all its energy to discover ways to make the job easier and to impart the basic knowledge of dry cell manufacture to everyone. They concentrated on this even after returning home, which was usually always after 8 or 9 at night.  Their nights were always utilised for planning job for the next day.

Indian Industrial Culture —   A Different Experience 

Before we came to India, we were told that people in India want to return to their homes immediately after work.  During my  visit to India before the start of Lakhanpal National Limited I was myself very much surprised to see employees In other factories assembled at the gate, waiting for the siren to sound so they could go hone.

We were also told that In many industries the persons in charge of manufacturing even hesitate to personally go to the shop-floors.  However, In Lakhanpal National our experience was different.  Whenever It was necessary our people worked overtime, even overnight, without problems erupting between supervisory personnel and shop-floor workers.

Self Discipline

The responsibility for the discipline of employees in any company rests, I believe, with the management team.

Since Its Inception our Company has put a lot of emphasis on discipline. In my opinion the first aspect of discipline is punctuality.  In our factory, the first shift and the general shift begin at 8 o'clock in the morning. Only in rare instances is a person late for work. Most of our people in the managerial cadre, come at least 20 minutes before the starting time.This sort of practice, develops an eagerness among the employees to follow the example of their seniors to work with discipline.  Referring back to my earlier talk about developing the lawn on the factory grounds by our own employees, I would like to emphasise that this was possible only because the supervisors themselves took a great Interest in these tasks and set an example for the others by taking the lead in doing the actual work.

During those days, even our staff members in the office,  took the lead in doing the cleaning. They always looked after their own work space and kept it clean by themselves.  Even the chief executive of our  factory used a

broom, to clean his work space. Today with the increase in common space, janitorlal service is provided but the spirit of looking after one's own work space remains.

We at Lakhanpal National Limited do not believe that cleaning Is a low cadre job and  hence.  should be performed only by a particular segment of society.  We strongly believe that cleanliness is necessary to ensure good quality and efficiency.  It is hence very important that every one cleans his own machine and his own working area. This   creates a feeling of pride In one's job, one's tools, one's work place, and the company as a whole.

In our factory today, the operators on the shop floor all clean their own machines and work places  Even in our office; we do not have 'menials ', whose only job is to carry files and documents around. The staff members themselves do these tasks.  Even seniors and supervisors go around to deliver papers and files whenever necessary.

This system helps to improve communication within various departments and also enhances one's understanding and knowledge regarding the working of other supporting departments.  Moreover, we do not have separate cubicles in our offices for Managers.  Every one works in the open office without invidious distinctions based on status or type of work.

This helps to achieve better co-ordination and understanding amongst various departments because every one is familiar with conditions In all parts of the
company

When an employee makes a mistake, except those of a very confidential or sensitive nature, he is corrected by his superior in the open office in the presence of his colleagues.  This system helps all the other members In the office to be careful and avoid similar mistakes, thus serving as a method of indirect instruction.

"Management by All Employees"

Our company, since its beginning, has professed to have a system of full participatory management or "management by all employees."  This, however, docs not mean that an employee is free to say anything he likes to the managment. He must act and think within the framework of the declared direction and policy of management.

There Is little merit in merely criticising a particular decision or a duty one has to perform In his organisation, and less in simply reporting that a problem exists.  Criticism and reporting must be combined with suggestions to solve problems to be meaningful.  But for this to happen. It Is very important that everyone In the organisation be aware of current conditions in the company  and the business environment. Regular  'Manager meetings', 'Engineer meetings' etc. provide our senior executives with opportunities to get a clear grasp of the status of corporate operations.

 Morning Assembly

Another feature of our company is the daily morning assembly which begins with recitation of the seven corporate objectives by all employees in unison.

Through the morning assembly each employee reaffirms his commitment to the company and Its objectives before each day's work.  This morning assembly also becomes a. forum for communication, where different views are exchanged and one gets to know about the activities of other sections or departments.  Since any Individual employee can come forward In the assembly and speak, the sense of community and solidarity is enchanced.

Furthermore, the monthly production and sales results along with plans for the coming month are also announced In the morning assembly.  'This helps to
improve communication since all employees come to know about the company's performance in production and  sales well before the Annual Report is published.

In many business circles It is said that details of corporate performance are privileged information, and should not be disclosed to the work force. But according  to our policy, an employee, being part of the management, has to know the company's record and future plans, for our policy of  "Management by All Employees" to be effective.—Without  making available this kind of information, It would be meaningless to speak of "Full Participatory Management".—

 Policy Announcements

Every year, on the 26th of January, we announce the Company's new annual policy to all employees.  Details of the year's target with regard to production, sales, efficiency and other areas are made  known to the employees.  A review of the previous year is also announced.

It is after the annual policy announcement that each department prepares its own plan in the light of the general policy.  The company does not believe in keeping secrets from its own employees.

This policy announcement day coincides with Company Day, when employees who have served the company for long periods and those bearing good records in attendance during the previous year are commended and presented momentos.


Novino Family
In our Company, we often use the word 'Family'.  Once, our employees even formed 'Novino Family Union' and hence the word "FAMILY" is very much familiar to all of us at Lakhanpal National Limited.

How would one define a family ?

We understand that a family means a group of people bound together by relations of unquestioned trust and confidence, like the relation shared between parents with their own children or a child with his own brother or sister.  Similarly, management has, or should have this trusting relationship with its own employees.  That Is what we mean by a corporate family.  Now when we emphasise trust and treat our employees like family members, how could we keep any secrets from them?  Hence even sensitive information like the latest production and sales figures is disclosed to all employees.

It is due to this relationship that we do not suspect our employee going out of the factory premises after day's work and hence, we do not have a "body-check" system at the factory gate.  We have yet to come across incidents of employee taking away factory property even though the practice of free passage has been inexistence  for the last 14 years.

Neither do we have the time-card scheme, wherein an employee records the time he reports for work.  We have a system where one simply places his card into an "in box" for his department.  This too has not created any problems for us.

Our company has adopted several control systems, not for the sake of taking precaution against error but to ensure the maximum utilisation of all social assets —  people, money and many other things - which are entrusted to It by society.  To give an example, in each phase of the productions process our operators keep records, and check the quantity of raw materials and components to be used as  well  as the finished products and the unused raw materials and components at the end of a work cycle.  Every month a physical inventory check is conducted by the Accounts Department which immediately prepares a full report.  The inventory check, therefore, should be seen as a way of making the fullest use of resources entrusted to the company from society, by clearly stating the results of the previous month's activity and providing necessary information for an action plan for the next month ; and not as a system for preventing  mischiefs on the part of employees.

Due to such practices, presently our material  loss is less 0.5%, and efficiency, over 90%

Q.C.  Circles —  Suggestion Schemes 

Recently, there has been a boom in schemes for promoting employee suggestions and Q.C. Clicles.  In our company this year we are working on 23 circles, some of which operate in non-production departments, such as the Personnel, Accounts, etc.  As for suggestions, we received on an average of 3.2 suggestions per employee last year.  The most important factor in the success of all these activities is top management's zeal, active participation and encouragement to employees.

Success In developing Q.C. Circles or suggestion schemes cannot be achieved through mere imitation of form. Instituting structures and procedures without securing employee cooperation  may actually make the employees lose their enthusiasm for their work.

Because our activity in these fields is in its Initial stages, I feel that, Instead of asking employees for immediate results, we should strive for still
greater participation by employees, and make sure they have the active support  and  encouragement of To? Management.  This alone will lead to ""Full Participatory' management and the benefits thereof.

Communication with Our Employees' Families

Another important aspect of communication is with our employees' families. We have a house journal —  'NOVINO DARSHAN' —  which is published and circulated to all employees once every quarter.  This helps In regularly communicating information about the activities and performance of the company to the family members of our employees.  In addition, the company organises a cultural programme and the sports meet once every year In which all employees participate and enjoy together with their families.

Due to a lack of space it is not possible for us to invite as many people as we would like, but nonetheless around 3000 persons normally attend these functions every year.


Home Visits

Sometimes we find that an employee is forced to take a long leave from work because he has taken ill or because there has been an unexpected calanity In his home. In these circumstances, his superior makes 'it a point to visit the employee's house to meet with and to cheer up him and his family. Except when I have very tight schedule, I also go along on such visits.  There Is no rule In our company with regard to this system.  Our senior executive and managers arrange these visits voluntarily as they consider an employee a part of 'NOVINO FAMILY'.  This system helps In developing a much better understanding between management and the work force.

There are no barriers separating employees according to grade or rank, and maximum effort is made to see that there is free and frank communication among all the members of the 'NOVINO FAMILY'.

Open Door Policy

I am the only one who has a private office, but even so my door Is always open to all.  Our canteen, the bath rooms, etc. are for the use of everyone. There is no special place reserved for the special few.  All employees, including myself eat the same lunch In the same canteen.

In our factory all employees from the top executives to the lowest rank of employees, male and female, wear uniforms.

During the early days, many of our employees, particularly females had many reservations about wearing the uniforms.  But now the situation has changed. Even though changing rooms are provided in the factory, it is a common site now to see employees coming to and returning from the factory In their uniforms.

When all employees wear a uniform identical in quality and design they have a greater sense of equality and mutual understanding.

Of course there has to be a clear cut distinction between people with respect to their responsibilities in the organisation, but there cannot be any sort of distinctions made among them as far as their humanity is concerned.  This is a fundamental principle of our corporate philosophy and management style. One example in this regard is the yearly picnic which is organised among our departments.  All employees go to a particular picnic place, use the same transport, sing and play together and share the same food.  In short, every one enjoys the festivities together and without discrimination.

This helps in strengthening the relations between the members of our "NOVINO FAMILY'.  Without a strong bond of truly human relationships, people tend to become stiff and unable to cooperate with the natural flexibility needed to produce good results.

Our ultimate aim is that all of us should work together until our retirement to create a bright and fulfilling place to work that we can proudly bequeath to the coming generation.

 National Service Through Industry
 
Our first corporate objective Is 'National Service through Industry'.  This does not mean that our sole concern is to increase sales.  Our primary goal is to   have our work recognised by society.  If society accepts our work we are sure to receive a reward from it in the form of reasonable profit.

In turn, this profit allows us to show our gratitude and make a positive contribution to our society.  We are proud to pay our fair share of taxes, for this Is one way which we can demonstrate our gratitude to the society in which we operate.  Moreover, we believe in doing our best to contribute to the society in other ways.  You all must be aware of last year's drought in several parts of India.  The management was approached by our employees, stockholders and distributors who asked us to help the people affected.  We then decided to supply water to the drought-stricken citizens from late March until monsoon set in.  We did this because we are members of this society, and because we realise that for a society to prosper each member must be willing to help others in time of need.

What I want to stress here is that timing is also very important.  Of course, huge sum of money and other articles are required in order to help those in drought-effected areas.  But main point Is to get them as much help as possible in the time of their greatest need.  Realising that after the rain start it would be of no use to carry water to those areas, we undertook to do what we could to supply water to them.

We didn't undertake this action because of any reward, but were gratified . beyond all expectations by the enthusiastic appreciation it received.

Employees Training

In our company we emphasise "on-the-job-training" for the new employee. However, because of a dramatic increase in business around the year 1979, the number of employees too Increased sharply.  Accordingly we felt that 'OJT' alone would not be sufficient and that we must have a more systematic and organised training system.  With this in mind, we are planning to establish a full-fledged training centre for the employees.  When a new employee is recruited in our company, his Initiation is conducted by the Chief Executive himself, who personally Informs him about the company policy.   Another avenue for the employee training is 'Off-the-Job Training'.  Opportunities for such training are made available on an average once a month.

Our promotion policy is to encourage promotions from within the organisation. Once an employee is identified for promotion, he has to select a project theme on which he is to work throughout the year.

During the  course of the year, he makes two or three interim presentations to a team of Senior Executives to get further suggestion and guidance. After the final presentation, if he is judged suitable, he is promoted to the next grade.We   call this scheme the  'Self-Development Scheme.

The important aspect of the 'Self-Development 'Scheme' Is that it requires the employees to Identify a problem In his own area of work,  analyse it In detail and make their best  efforts to solve the problem by taking a  systematic approach.  In order to achieve his goal within the prescribed  time

limit, the candidate has to make an all-out effort. The candidate who successfully  completes this course develops a special capability to tackle any problem in a very systematic way.

In the early days, since our total strength was less, it was possible for our senior executives and managers to train the subordinates directly under them. However, now with the expansion of our business the work force has increased and we are also dealing with much higher number of outsiders.  Thus direct communications between our managers and non-supervisory personnel has declined.

From the point of view of personal development. It Is not enough for an employee to just pass through the 'Self-Development Scheme'.  We also feel it important to emphasise the development of the individual as a human being.
This we want to achieve by establishing our own 'training centre' and conducting  several educational programmes.

Thus far I have spoken to you about our daily activities and training  facilities.  I hope this will serve as a fruitful basis for discussion. We   realise that many improvements could be made in our programmes and their  Implementation, and would welcome any suggestions you might have.

Our slogan this year is 'Create the future by strong follow up'. A plan may be excellent but until  and unless it is followed up with perserverance it will not achieve its goal.  In fact the leader of the organisation or section that should have strongest  drive to 'follow up' and see that plans are implemented.

In conclusion, I would like to extend my sincere thanks to all of you for your patient attention to my description of our experience at  'Lakhanpal National '.

Thank you

BASIC BUSINESS PRINCIPLE OF LAKHANPAL NATIONAL LIMITED:
TO RECOGNISE OUR RESPONSIBILITIES AS INDUSTRIALISTS, TO FOSTER PROGRESS AND TO PROMOTE THE GENERAL WELFARE OF SOCIETY, AND TO DEVOTE OURSELVES TO THE FURTHER DEVELOPMENT OF WORLD CULTURE.

BASIC CREED OF EMPLOYEES  - LAKHANPAL NATIONAL LIMITED
PROGRESS AND DEVELOPMENT CAN BE REALISED ONLY THROUGH THE COMBINED EFFORTS AND CO-OPERATION OF EACH MEMBER OF OUR COMPANY.  EACH OF US, THEREFORE, SHALL KEEP THIS IDEA CONSTANTLY IN MIND AS WE DEVOTE OURSELVES TO THE CONTINUOUS  IMPROVEMENT OF OUR COMPANY.                                

*************


SEVEN OBJECTIVES OF LAKHANPAL NATIONAL LIMITED

1.    NATIONAL SERVICE THROUGH INDUSTRY
2.    FAIRNESS     
3.    HARMONY AND CO-OPERATION
4.    STRUGGLE FOR BETTERMENT
5.    COURTESY AND HUMILITY
6.    ADJUSTMENT AND ASSIMILATION
7.    GRATITUDE                                 

*************
COMPANY'S SONG

INDIA'S PROSPERITY THROUGH NEW INDUSTRY
WE STRIVE FOR PRODUCTION, WORK WITH ENERGY,
ALL THE RACES LIVE TOGETHER WORKING SIDE BY SIDE,
LIKE A PERPETUAL FOUNTAIN WE PRODUCE CONSTANTLY,
TO DEVELOP COUNTRY'S INDUSTRY WE WORK IN GOOD HARMONY, AIM IS PROGRESS THROUGH CO-OPERATION
HARMONY AND SINCERITY, LAKHANPAL NATIONAL

**************
H. C. PAREKH

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