Budget overrun ! How come the expenditure has been exceeded even when a full quarter is left ?

The general manager shouted at Suresh who just showed him the figure of the Coal Handling Plant. What planning you are doing then if the cost goes sky high ? What value addition are you doing ? - The frustration is clear on the GM's face. Ever since Suresh took over the planning of the Coal Handling Plant (CHP) department of this gigantic plant he wonders why so much works need to be done every day. Everywhere he finds people are busy doing works. Certainly if so much works are to be done the cost will shoot up. Besides the reliability of the system is very poor. Every now and then some equipments are going down and maintenance works are taken up round the clock. As per the designer's rating the system has a through put of sending 10000 Tones coal per hour to the 7 hungry boilers which can take as much as 60000 tones coal everyday. As per designer it is supposed to be run not more than 8 hours in a day. But in reality the entire CHP has to be run for not less than 23 hours a day. Certainly the utilization factor is very poor. This is a clear indication of it's ill health and perhaps more. In his earlier assignment he was in headquarter , there it was 5 days week. Most of the Saturdays and the Sundays he enjoyed uninterrupted but ever since he joins this project on his promotion he could rarely enjoy his Sundays full. Invariably the first half of the Sundays he had to be there to plan some jobs here & there. Strange the whole group of the CHP goes on every Sundays and stays there till 5:30 PM, the official closure of duty time on week days. However, on weekdays most of the people stay back in the plant till 7 PM or more for completing their jobs. Why so much work you have to do everyday ?, He once asked Shrivastawa , the manager in charge of the cleaning. Just come & see what enormous cleaning we have to do everyday ! - Certainly he was very proud of doing so much cleaning everyday.

Ever since he joined ,Suresh started moving around the CHP to understand the nature , style & culture of here. His direct reports are a manager and a few engineers but they remain busy whole day in doing the planning works for the main plant. The planning of CHP was never cared by any of the former GMs so obviously it was always behind the main plant. He was also very amazed when he finds every planning man works from their desks and computers. No body visits site even he finds that the maintenance engineers too sometimes don't go to the sites. How the job is done then ? By contracts , pat came the reply from the CHP engineer. So Suresh started visiting the CHP sites regularly. His direct reports used to come along with him for a few days after that he clearly understood that they are very reluctant to go to the sites. -------- -------- -------- -------- -------- -------Record Making So gentleman how you are going to manage this big CHP planning then ? , Clearly the GM demands a response now. Sir, I'm just two months here. I need some more time to understand the problems & device a strategy, He looked straight through his eyes. In these two months he understood the gravity of the problems but it's too early to construct a reason behind that and not to talk of the strategy at this moment. Just streamline their maintenance planning system and the rest things will certainly fall in place, The GM dismissed the conversation. He went to the CHP control room and was greeted by their functional head who was occupying the chair of the controller. Anything wrong ?

Come and be part of the history we're going to make today. We'll haul record coal today and it will be a national record, He declared very proudly. How come you are getting so much coal ?, Suresh asked. The Coal India is also lined up for this record So the next 18 hours he witnessed a hectic line up all along the CHP hierarchy and together they hauled up a record 90000 metric tonnes of coal in a day. Sometimes he even saw the functional head is instructing the operating engineer to increase the feeding rate further. The entire conveyor system is not in a very good shape. Every belts are running out and spilling coal all along the gallery & passages making the follow up cleaning job a nightmare. And now delivering more coal means making the system more overloaded, dirty & even very vulnerable for some weak equipments. Stop 13A, It's all spilling on the galley ! somebody shouted over the PA system. NO Don't ! Ajay go and control the spillage ,Shrivastave ! rush for cleaning, use the tramp iron chute for dumping the coal on the road side - The head is clearly in command now. His two managers Ajay & Shrivastava rushed with their teams to the site for repairing & cleaning. Finally at the struck of midnight the heavily satisfied head jumps from his chair and embraces Suresh and the unit controller as the record has been finally made. It's now a national record of 90000 MT coal haulage by any CHP. The satisfied head now calls the GM and tells him the record he has just created. While everybody in the control room was shouting in joy the conveyor 13A slows down to a grinding halt in the middle. The 13A , 12A belts are severely damaged due to heavy loading - A dirty looking

man enters the control room. Don't worry we will do the jointing works tomorrow , Ajay just enters the control room now. But it's a heap of coal all along the conveyor systems which needs cleaning for the whole week , Shrivastava is certainly not very happy with the prospect of the associated cleaning works. 'The stacker-2 boom is not rotating ', another dirty looking face enters the control room. 'We will replace the gear box tomorrow' , Says the mechanical manager. 'Don't worry , everything will be OK just manage the rest of the night.., the head reassures before leaving the control room. After the initial euphoria is over everybody disperses , Suresh now decides to have a physical round of the CHP system. First he went to the conveyor 12A & 13A. OH my god what a mess ! It's totally filled up with coal all around the passage and the galleries. The other half of the steam12B & 13B is somehow running but the coal spillage is so much that there is no space left for maintenance work if required on them and outage of another belt now means complete closure of coal feeding to the boilers. The cleaning of this area will certainly cost them a fortune and not to talk of the huge maintenance works waiting to be surfaced out post cleaning works. The stacking conveyor-2 is also in absolute mess. It looks like the already damaged gear box have become irreparable now after stacking so heavily tonight. He goes to the other areas and everywhere he finds coal spillage , dust & slurry , making every system inaccessible. The cleaning group is already on job but certainly it's the messiest one. He just can't understand this record madness which costs so much damages to the system. After all it's not a charity work, it's business !

'Why people are so mad for record making ?' Suresh writes in his diary. On the way he detoured the boiler control room. People greeted him in that wee hours. It was a 500 MW unit and it burns about 8000 tons of coal everyday. They have seven such boilers which burns about 50000 MT to 60000 MT coals everyday. They in fact are the sole customers of the CHP. While talking to the unit controller Suresh came to know that they were just apprised about the record. But tomorrow , I mean today you may face problems because some of their main conveyors are badly damaged due to the extra handling of coal, Suresh tried to feel their pulse. Sir, whenever they made such records in the past the next three days we had feeding problems but this time it won't be because tonight one of our 500 MW units is being withdrawn for boiler tube leakage, The man seem to be quite habituated with the CHP style. Earlier also they recovered in 3 days and this time it will be lot more easier Only the cost will be . , Very carefully Suresh released those words. Sir every records has to have some pain. The bigger the records the more the pain. Isn't it ? Yes , perhaps ... 'But certainly not in business ', Suresh almost uttered but somehow controlled himself. Not fully aware & conscious - Suresh wrote in his diary. But how come a long term consumer is not worried of the health of it's suppliers ! His learned friend, Mana must have some answers... Next day the GM personally came to the CHP meeting and congratulated the team for the record. He even gave them the next target of 1 lac tones record. To make the matter sweeter he even recalled the analogy of Mighty 'Hanuman' of the great Indian epic Ramayana. 'Hanuman' had enormous cross country jumping power but he never knew it until one day the great Rama told him to jump to Lanka. So the GM told them like Hanumana they too have power only they need to put into practice.

'But at what cost !' - Suresh almost spoiled the party but somehow he kept those words to himself.

---- ----- ------ ------ ------- -----Short term pleasure In his college days Suresh had a crush on Mana who was in the same class with him in the Asutosh College, Kolkata. But neither Suresh ever told her nor Mana ever approached so their romance never flourished. But ever since both of them settled in life and married they became good friends. Mana did her MBA and joined an engineering college in Delhi. She teaches production engineering. Both keeps their phone numbers & sends greetings on the festivals. Mana always asks Suresh to meet her while he goes to Delhi but Suresh could never manage time. 'Why people get so fascinated in the short term pleasure while completely ignoring the long term or even the medium term prospects ?', Suresh asks Mana on her mobile. 'Hi dude ! After so long, Are you in Delhi now ?' , Mana was in her usual teasing tone. 'What your business management says on this managerial aspect?' 'Dude so serious ! Anything wrong ?' So Suresh briefs Mana the entire budget over run & the record making spree of the CHP and then asks those questions. 'Suresh , it's so simple . Our pet dog Lucie knows it the best' 'What ?' , Suresh still lost. 'Or imagine when your daughter just learnt walking what you and your wife did to her ?' , Mana was still playing with words. - You rut, shut up now, I got it, behavior that is rewarded is repeated. 'Dude you are the smartest one ! See you later , I have classes to go' , Mana hang up the phone.

So it's the reward which has made them to ignore the other values of work. Even the GM has already declared the next reward point without considering the cost and the overall status of the system. But why the CHP functional head behaves like an operator or like a controller ? Something is still missing - Suresh wrote in his diary. ---- ------- ------ ------ ------ ------- ------ ------------------

Short term is easy During lunch break he came home and was talking to his daughter over her class XI annual examinations which she just had that morning. The Paper was little tough but as per your instructions I started with the easiest ones and then as time moves on I did not know when I came to the last question. I think doing the easiest thing first is a good ploy for the poor school going kids like us ! , her daughter rushes for the bathroom. Suddenly he knows her daughter has answered his other question Achieving short term target is the easiest thing to do. So the head was doing the easiest thing Running the control room. He has done it many years in the beginning of his carrier besides now there is good rewards available from the GM. 'OK tell me from your management books what are the other values of work and how to find out which are overlooked by them ?' , Suresh asks Mana next day during lunch break. 'Well Dude, I can tell you quite a hand full values of work but since you will be confused to accept them all, here goes a few ones ethics , planning , cost, safety , customer satisfaction , timeliness , reliability - the list goes on.... ' , Mana was never ending. Hold your horses ! it's enough for me now, I'll get back to you same time tomorrow , Suresh hung up for the lunch.

The massive cleaning job started in the CHP. Next two days the coal haulage was reduced to 50000 tons - just hand-to-mouth supply for all 7 hungry boilers. There was huge damages to both the conveyors & the stacker. A few pulleys , gear box and a good part of the conveyor belt had to be replaced. A few other equipments also had to undergone cleaning & maintenance works. That day in the evening Suresh took a few small square hard boards on which wore the following words.
Planning Safety Cost Ethics Timeliness Cstomer Satisfactcn Reliability

If these are all values of the works then there must have a starting point where it starts it's journey. What is that point ? Suresh wonders. He thought 'ethics' first but what if there was no planning then nothing moves. But who plans ? Is it only he the planning department or everyone in the CHP ? He only joined here for two months before that they themselves used to plan their works. So the value of works starts with Planning - Decision to do the work What next ? As per him it should be ethics. Technical follies are manageable so are the administrative follies but ethical follies cause irreparable damages to the culture in the face of the society. So 'Ethics' comes immediately after 'Planning'.
Planning

Ethics Planning

Like a staircase it goes upward. What is the next ideal value ? Safety or Customer satisfaction ? As per his guess it should be 'Safety' and then 'Customer Satisfaction' because an unsafely produced product may not give guarantee enough to entice a long term customer. Also without safety the reliability of production will be at stake which may deter any customer on any

day. Customer satisfaction It's always a customer for whom a supplier works. There is no iota of doubt about that but whether the customer always gets satisfied or not is the next valid question. After talking to the main plant operation staff that night he concludes that the main plant operation (the main customer of CHP) staff is not fully aware of his supplier's health - which is nothing but foolishness in here. However, the value chain moves further. Planning Ethics Safety Customer Satisfaction At this point the next value could be one of the most two important blocks Cost & timeliness. But certainly cost is more important than timeliness. If cost is not managed properly then no customer can be satisfied at all. The value chain now gets a shape like this. Planning Ethics Safety Customer Satisfaction Cost - Timeliness But if this is the ideal value chain then who manages what value ? Perhaps Mana can throw some light now. It's 10 PM impatient Suresh connects Mana's cell number. 'Hi dude ? ' 'Mana , it is right that my ideal value chain starts with planning and it goes like Planning Ethics Safety Customer Satisfaction Cost Timeliness ' 'Looks logical except the last two. Seem to be a step jump there..' 'Why ?' 'In the real hierarchical world the cost and timeliness are managed by two different people. Normally as people go up in the hierarchy they become more powerful because their decision results in big money either expenditure or saving. Whereas , the timeliness or the time is managed by the people at the bottom level like the supervisor or the engineer' 'Yes it really makes sense , These big bosses can control timeliness also - by adding or deducting resources / manpower thus controlling cost'

Dude, remember your value chain moves from left to right so is your hierarchy , people on the right side of the value chain can over power people on their left but not vice versa , Mana was about to hung up. 'OK so there is a change in hierarchy at the cost, but what comes after cost', Suresh was almost begging her. 'Dude, I've stopped giving free advices unless .. Unless what ? Unless you promise that next time you come to Delhi you will visit my place OK, done Dude , It seems you have covered the short term values chain . Now SMS me the chain, I need to see it once. So Suresh SMS Mana the following model Planning Ethics Safety Customer Satisfaction Timeliness - Cost ' The short term value chain ends at Timeliness and the Medium term value chain starts at Cost. The people at the bottom level who 'manages self' take care of this portion of the chain. This is the easiest part of the work. Every body starts their carrier at this level. The next level of hierarchy the managers . They do not manage self instead they manage people below them. As Mana very rightly said Managers can act like an engineer or Supervisor so is the CHP head that night acted like an engineer replacing the shift charge engineer. In fact that night the managers and the head all moved to the left in the value chain and did the lower level work which they are not supposed to anyway. Why people go down the work value chain Suresh wrote in the diary. Next day 2nd half was the site management committee meeting day. The GM takes review of all the departments. In his relentless way the GM ranted all the departments for cost over run. It was surprising that every department was spending more than the budgeted allocation. Some more areas he showed his concern wherein the state pollution

control boards has asked for reducing effluent level in the plant effluent discharge which is maintaining consistently high for last few days. So is the ash emission level in the air which was more than the limit. A note came from the corporate center wherein some strategies are not followed by another department despite several reminders etc. In the business quiz at the state capital the station could not perform well. The technical alliance talks with the vendor-X is not going good. In the state rehabilitation program the station has got very bad rebuke from the state forest ministry. It seems in every outward move the plant is faring badly. However, the generation and other related technical parameters are excellent. The GM even urged the operation head in line with CHP to go for a generation record. He even asked the operation head to look it personally so that the generation record is achieved even before this month end which is also happen to be the end of financial year. Immediately Suresh knew what the operation head will do in the next couple of days. He will go down a couple of levels towards the left of the value chain and then like an engineer or like a manager he will work day and night to make that record neglecting all other values of work. Because behavior that is rewarded is repeated everywhere. 'But why people don't look into the other values of work ?' , Suresh asked Mana next day during lunch. - Dude, those other values are under ground. They are too intangible to be understood and appreciated by every tom ,dick & harry. Also taking care of those values are very difficult. The more the value chain goes right the more difficult values are emerged and more top hierarchy is involved. The effect moves from medium term to long term to futuristic term on the right. 'You mean to say , people focus only those figures which are very tangible and are easily felt and appreciated by everybody !' You are very smart, Dude ! 'But people are promoted to look after those values isn't so ? else they would have remained in those levels year after year ! Right people are already there in that lower levels to take care of those values '

 Very right , but leaders are made of values not by mere promotions. When a man is promoted to a higher level he may have to drop some values of the previous level and gain some values in the present level for performing properly. Remember when you were an engineer you were a good computer programmer. Do you still do computer programming now-a-days at your managerial level ?
Of course I don't but I do give coaching to my engineers on planning system &

little bits of open source programming. 'That's what the higher level leaders need to do most think , give directions , give coaching and making the leadership pipeline ready with potential leaders. OK so far so good but how to know about those under ground values ?, Suresh asked Mana one last time before hung up for the day. I really don't know but as per my husband who is a professor on psychology the exception reports are a very good source of the missing work values. Anything that is not working is because of a value which is not paid it's due credit, Mana hung up. So next 3 days Suresh looked through various reports & minutes of meeting and got a handful of those underground values. His value chain now expanded like this. Planning Ethics Safety Customer Satisfaction Timeliness Cost Corporate guidelines Reliability Impact on Environment - ' The medium term impact seem to complete upto this mile stones. The company vision is another value which is often neglected in the heat of the daily targets. Sometimes except CEO nobody pays attention to it. A job whether is in line with the company vision or not is very difficult to judge but leaders at the functional head level must judge it because they are there to look at it. Is this way is the job being done in the most competitive way ? Is the technology sustainable for use , say in another three years ? if not do we have a better technology in the pipe line ? if not what will we do after 3 years when this technology becomes obsolete ? These are the thoughts must occupy in the functional head's mind. He must explore the potential markets for next upgraded products. So the value chain looks like Short term: Planning Ethics Safety Customer Satisfaction Timeliness -

Medium term:Cost Corporate guidelines Reliability Impact on Environment - ' Long term:Vision - Market Competitiveness Innovation / Futuristic technique When short term glory is intense Innovation or futuristic technique is another area where not much focus is paid by the functional head or the managers. They think what is achieved today is going to last atleast till their tenure if not for ever. But in todays networked scenario the world has become a global village. Today's award wining technology becomes obsolete in blink of eyes. Survival is solely depending on innovation. Therefore , the present technique needs to be upgraded continuously by innovation so that the gap with the new technique or the disruptive technology remains minimum. 'Mana , I understand Innovation / Futuristic technique is also a value of work but help me to find out who's responsible for it ', Suresh spoke on the phone.
See making people innovative is not the job by carrot or by stick. For that you

have to make people free , love to be evolved with the organization and take risk. And who can afford someone to take risk ? it's none other than the top boss. Also the content of the organizational atmosphere should be such that people will feel relaxed & charged for experimenting. It's all come from the functional head or the top manager. 'Ok fine, now give me some idea about strategy. Who makes it ? It's very sexy to read the stories where the CEO takes a new strategy which saves the company from the brink of disaster but in my experience you talk to the ground level and you will find plenty of strategies bubbling there. Then why the strategy has become a fad with the higher levels ?' - Because the big bosses are powerful , intelligent & wise. They can decide which to be selected , which to be rewarded and which to be implemented. Live it to them now but the managers should take care to bring those ground level strategies to his table for sure. The work value chain now becomes Short term: Planning Ethics Safety Customer Satisfaction Timeliness Medium term:Cost Corporate guidelines Reliability Impact on Environment Long term:Vision - Market Competitiveness Innovation Strategy -

Suresh SMS the entire chain to Mana. Now he has to dive further deep to find out the futuristic term values of work. If it's so difficult to just find out then it can jolly well be imagined to achieve that value how difficult the efforts it would be. The short term and the long term values of work are just like Microscope & Telescope. A microscope looks from inside out whereas the telescope looks from outside in. A microscope when zoomed on an area may not see whether it's on a collision course or not whereas a telescope for that job is just right. It can find out from it's speed when it is going to collide even. That means the big bosses are holding telescopes whereas the bottom people are holding microscopes - Mana was exuberant on this new insight by Suresh. 'Also since the functional head is holding a telescope he can cover more number of works on one single sweep and that's how he should look at those works' , Suresh has got more wisdom now. 'But as we move more upward upto the business unit head level say the general manager is he also holding a same telescope like the functional head then what is the difference between them ? ' , Suresh is skeptical now. ' NOOOOO ! he is holding an astronomical telescope ,looking between the functions whereas the functional head is looking within the function' , Mana was almost shouting in the phone. ' But are we not emphasizing silo culture culture then ? ' , Suresh poked further. 'Hold your horses ! You said you have several boring review meetings DMP , ORT , SMC . What for they are ? Doesn't they look into the silos and bring out the issues ?' , Mana was literally fuming. 'Ok Ok cool cool, yes they are and most of them are chaired by the general manager himself ', Suresh tried to gain control. 'But then suppose the General manager finds that some function needs some additional manpower to enhance a core competency or for adding a new competency , it will be then his look out to pour more man power there', Suresh points out. Similarly if he thinks that some function needs to be projected as a brand or need some functional alliance from another agency he will do so by his functional power Mana adds further.

It is also the look out at this level for new or emerging market. Therefore this level have to look more outside then inside. 'Ok the list could be very exhaustive at this level but what should be the last important thing to look for at this level ?', Sureh put another bouncer for Mana. 'This question is for my husband who is a professor of psychology', Mana proposed. - As per him everything starts from society , Society gives us everything therefore, when thing ends it must go back to the society if not fully atleast partially. 'How come ?' Object of business is prosperity , making money but ultimately it aims for making the society a better place. Successful business creates surplus money in the hands of people which finally spills over to the society again. Therefore , the last impact to be checked is impact on society whether is it worth doing so that directly or indirectly makes the society a better place for living. I really don't know how many CEOs / GM do it but all good leaders do it at the core of their heart. They all love to return, part of their profit with the society. 'Mana that's most lovely way to put it and that completes my value chain' , Suresh says with equal compassion. The value chain now looks this way Short term: Planning Ethics Safety Customer Satisfaction Timeliness Medium term:Cost Corporate guidelines Reliability Impact on Environment Long term:Vision - Market Competitiveness Innovation Strategy Futuristic term: Building brand / alliance strengthening competencies finding new market Doing good to society. It's no wonder that people often neglect long term or the futuristic term values because the initiative taken today may not give result to the initiator during his regime but that is need to be done because the result being eaten today may have planted by someone else long time back. However, each value when added increase the total value like this.

Coal Handling Plant Value Chain END.

Society New Mkt. Strengthen Branding Strategy Innovate Mkt. Vision Env_Imp Reliability CC_guid Cost Timeliness Custmr_S Safety Ethics Planning

Futuristic term By Business Unit Head Long term By Functional Manager

Medium term By Managers

Short Term

START. Suresh now clearly understands why there is so much fire fighting type short term works . It's because people are not adding due values in the work value chain. And everybody including the functional head is playing the lower level leadership because that is more easy , people appreciates that values besides impressive reward is attached there. Suresh asked for an appointment with the GM at his office sometime next day. He must be apprised about the secrets of the value chain before it becomes too late. S. Bera Powai