You know the subject or the theme is on managerial excellence. So I was told you can speak on any topic related to managerial excellence. And so when I thought about it, I said let me speak on managerial excellence the way I see it or the way I've seen it over the last 36 years of my professional career. So when you reflect on managerial excellence, I think the starting point is your personal experience as a person. Do you pursue excellence? It's to do with the value system that you have. Josh talked about the middle class value system. It's about what you stand for. It's about the dignity with which you treat people. It's about the pursuit of, if not perfection, at least excellence in whatever you do. It may be education, maybe sports, maybe arts, maybe in the hobbies that you pursue, maybe in the relationships that you have, the friendships that you have, how deeply are you engaged in it and how authentic are you in your engagement in it. All these in some sense reflects on who you are as a person and what you are as a person, and all of us evolve as people. We grow up with the value system embedded in us from the upbringing that we have, and then we try to preserve it or strengthen it as you go along, and thereafter you get married, you have children or grandchildren, and you also keep learning from those experiences and keep developing yourself based on the value system that all of you together as a family comes in. So to me, that personal excellence journey is something that you go through all your life. It reflects in the authenticity that you have, the credibility that you build, the trust that you build, and all this is very important because that reflects in your workplace. The other day, a colleague of mine who teaches in a business school asked me what would your advice be for students who are joining MBA school on how can they be an excellent MBA student. I said that advice is very clear: you work hard, you do well in your grades and things like that. You can call yourself an excellent MBA student. But does that make you an excellent manager? You will become an excellent manager depending on how you deal with people, how you deal with situations, the judgments that you exercise, and all that depends on the foundations on which you've been built as a person. So to me, personal excellence is a very important part of managerial excellence, and sometimes the hard work that goes behind personal excellence is not seen. Often times you see it in sports: no successful sports person at any level has achieved that without a lot of hard work, and sometimes sports people say that I'm called an overnight success because nobody has seen that 10 or 15 years of hard work that goes behind it. So that to me is a very fundamental ingredient of managerial excellence.
The second ingredient of managerial excellence for me is professional excellence. And I draw the distinction between personal excellence and professional excellence because it's like personal integrity and professional integrity. They're not necessarily the same, right? Personal integrity may be about the value system that I have. Professional integrity is the way I behave in the workplace. Do I walk the talk? Do I stand by what I say? Do I say something in some meeting to get away with that meeting or with what I want to say there and say something else outside of that meeting? Am I in a hurry to take the credit when it's not due to me? Am I in a hurry to share the blame when I should have taken it? Things like that. So that's about professional integrity. As a person, you may be a very honest person, but as a professional, are you an honest professional? Are you willing to stand up even if your neck is on the block to stand up for whatever you're standing for or whatever your team stands for? So to me, professional excellence is slightly different from personal excellence. One does not guarantee the other, but both are important in your pursuit of managerial excellence.
The third part of managerial excellence in my mind is institutional excellence. How do you build excellence in the institutions that you can influence? I mean, if MMA has won this award as a best management association for 14 years, that's a great example of how an institution has built excellence into its DNA despite it having multiple leaders coming in there. There may be some common factors like Captain Vijay Kumar, but fundamentally it's an institution which has consistently been seen as excellent by the All India Management Association. So how do you build institutional excellence? And that to me is one of the biggest challenges for managers in the sphere of influence that we have. Can we build that culture or DNA of excellence? So here I go back to the company I work with, Tata Steel, not for anything else but I know Tata Steel better than I know any other company, and hence I'll seek your indulgence to give you a couple of examples of critical points in Tata Steel's life where the DNA of excellence was built and rebuilt in the company. The starting point was of course when Tata Steel was formed. I don't know how many of you know the story of Tata Steel when it was formed. It was actually the first atmanirbhar story. When you say you want to be self-sufficient, Tata Steel was actually set up because at that time the founder of the Tata group, Jamsetji Tata, felt that any country, because he used to travel extensively and he had seen what the industrial revolution was doing to the economies in the West, and he said that any country which needs to be able to stand on its own needs a power industry and a steel industry, and hence Tata Power and Tata Steel were two of the earliest Tata companies he conceived of. The third one he conceived of was because he met Swami Vivekananda on one of his journeys. Because those days, unlike now, if you wanted to go to the US or UK, you got onto a ship and spent a few months in that ship and then you reach there. It was typically a six-month journey to get to the US. So on one of those journeys, his fellow passenger was Swami Vivekananda, who was going to Chicago to deliver his famous speech, and they were discussing about how important sciences are for the advancement of any nation, and hence the thoughts on Indian Institute of Science came up. So the point I'm making is sometimes the founding values also play a very, very important role. So when Tata Steel was conceived of, and the founder passed away in 1904 before Tata Steel was made, but he had articulated what he wanted to his son Dorabji Tata, who then built Tata Steel. But there were so many dimensions of it which even today are relevant, probably more relevant today than it was then. For instance, he said the community is not just another purpose, I mean is not just another stakeholder, but the very purpose of our existence. That resonates today when there's so much of mistrust between society and corporates. The other thing he said, because he had seen the Liverpools and Manchesters of the world at that time, they were like big slums because people were coming from the countryside to work in the factories and they had no accommodation, no place to live, and there was chaos in all those places. So he said when we build a steel plant in India, we shouldn't have that. And hence he got some of the leading thinkers at that time, Sidney and Beatrice Webb, they were the Fabian socialists who set up the London School of Economics and things like that. He got them to India and got them to help plan Jamshedpur, to say that when I build a steel plant, it's not just building a steel plant, I need to build a city or a place where the workers can live with dignity. And that was the spirit.
And even today, I don't know how many of you have been to Jamshedpur, we try to keep that ethos because the steel plant is in 1,800 acres but we run a township of 15,000 acres because that was part of the founding values of the group. So when you have a powerful purpose, when you have the value system which there is in institutions, then it's easier to pursue excellence all through the life of the institution because a lot of people are attracted by that value system. So over the years, professionals join, people like me join and work away in the organization, and everyone has an opportunity to go to the top. And in Jamshedpur, if I go and tell someone I worked for 36 years in Kardine, they'll ask you which generation because there are people who are fifth generation, sixth generation. So that's the story. People feel so emotionally connected to the organization that they want to work for it. And one of my customers once asked me, he was a big entrepreneur who had a big business, used to buy a lot of steel from us, and he said one of the things I find strange in your company is everyone in your company thinks you're the owner. In my company, I'm the only one who thinks I'm the owner. So the way you negotiate with me sometimes it looks like it's your money, but you're all just professionals. But then that's the emotional connect you have with the institution. And it's not just the employees, we have multigenerational shareholders. I know some of you may be shareholders in Tata Steel. We have 5 million shareholders and many of them are multigenerational. So when you have a founding value which is strong, which is the purpose is good, then it's easier to build institutional excellence because people join it for the value system, not so much for the salary or something else, but for the fact that you seem to be doing it for the right reasons. I'm not for once claiming that Tata Steel is a perfect company and it's the epitome of what a good corporate should be. All I'm saying is at least the intentions are right, and over generations there is a responsibility each of us have to make sure that those intentions are not compromised.
More recently, I think in the '90s, this is soon after I joined the company, we went through an existential crisis. Because as all of us know here, in '91 when the Indian economy opened up, a lot of people wrote off Tata Steel simply because we were used to a steel market where the prices were fixed by the government. We only had to be more efficient than SAIL because the prices were fixed based on the costs of SAIL. We didn't have much competition because you needed a license to set up a steel plant. Import duties were more than 100%. So it was a very different era that opened up ahead of us in '91, and people were setting up steel plants closer to customers. We were far away from the customers. So for many reasons we were written off. We had 80,000 people working for us at that time, making 2 million tons of steel and doing 3 million tons of mining. So that was what Tata Steel was in '91. And the then CEO, Dr. Irani, decided obviously that it's a matter of survival. The Tata group itself was really questioning whether Tata Steel will survive, and that was I would say another wave of pursuit of excellence that we went through. While the first part of the journey I've only read about, this part of the journey I experienced because I was already an employee of Tata Steel, a very junior person in Tata Steel, but I could see the change which was being driven in the organization. You know, we all know labor laws and how difficult it is to work in India. But in the '90s, Tata Steel reduced its workforce from 80,000 to 40,000 without a strike. We were very generous in our packages that we gave to our workers. So every year 4 to 5,000 people left the company, and by the end of the decade we had come down to about 40,000 people. Dr. Irani at that time realized that we need to learn from the Japanese. Mr. Venu Srinivasan was one of the first proponents of this journey. They went and saw how the Japanese did it. We had a team on TQM of the best and the brightest of Tata Steel at that time in it, working directly with Dr. Irani. He took all the union leaders and showed them steel plants in different parts of the world to show them what productivity is, and convince them so that they could convince their members on the importance of this journey. We were a company where the joke was, you wanted steel, you go and sit in front of the sales manager. The most important piece of furniture in his office was a sofa where you sat and waited for your steel allocation. Those were the days. And then you had to change the culture to become more customer oriented, etc. So a lot of these changes happened. And even within the Tata group, we had an excellence program which was based on the Malcolm Baldrige award. So it was called the JRD QV award. And in fact, Mr. Tata said that the first company within the Tata group to win that award was Tata Steel, and Mr. Ratan Tata in that function said it would have been the last company I would have thought would win that award because he saw what Tata Steel was 10 years earlier. So the point I'm making is large organizations, old organizations, complex organizations, maybe who've been set up with the right founding values but operated in a different context, can also make a change rather late. Because by the time, Tata Steel was already 80 years old, so it was not a young company, but can make that change. So if you have the right leadership, the right intention, the right communication, the right engagement with all the stakeholders, explaining to them why they need to change and what it means to drive that change, then you can still pursue that excellence journey. And that's where Tata Steel was. By the end of the decade, we became the lowest cost producer of steel in the world. We still are in the top three or four in the world. We also later on, for those of you who are familiar, applied for the Deming Prize, the Deming Grand Prize.
So we constantly subject ourselves to these assessments. Because you always need to look at a mirror, otherwise you will not know, and you need somebody else to show that mirror to you. Sometimes when you look at the mirror yourself, you don't really see the warts or the flaws, but when you have someone come in from outside and you tell them that what's more important is not the award but the feedback, then they take you seriously. You get feedback and that's how you improve. And when you pursue excellence, it's not about benchmarking with other people in the industry. It is about benchmarking with who is the best in that area. And even today we do that. If you have to benchmark maintenance, we look at aviation companies because their maintenance standards are very different because you can't have a failure. So things like that. So it depends on who you benchmark with. It doesn't depend on which industry you are in. So excellence obviously, as has been said many times, it's not a destination, it's a journey, it's a mindset. You as an individual should have it. Whether you're an entrepreneur, a professional, a leader, a manager, as a person you should have it, as a professional you should have it, and then you can influence people to pursue excellence as a team, as an organization. It's about consistently walking the talk. It's not about saying all the right things but doing something else. It's also about constantly looking at the future. I think again Josh talked about looking at the future, because again organizations like us who've been around for some time, who've had reasonable success, have a tendency to talk more about the past than the future. There's this famous academic Vijay Govindarajan who said that companies who only talk of the past don't have a future. So that's also something we remind ourselves. As much as we are proud of the past, how do we make sure that we spend more time thinking about the future, talking about the future? What are the changes which are going to impact us? Companies like Zetwerk are disrupting the value chain for fabrication. So it's an opportunity for us because we buy a lot of fabricated stuff. It's also sometimes a challenge because many of our customers, as they consolidate, then it's a very different approach that we need to work with them. So constantly looking out for what are those patterns which are emerging and how do we as organizations anticipate them, plan for them, prepare for them. Even if you're not able to predict all that's going to happen, if you are better prepared for five or six or seven of the ten things which are going to happen, you'll have more time to deal with the balance things. So managerial excellence is easier said than done. It happens when there's a congruence of your personal value system, your professional value system, and the institutional value system. So thank you very much once again for inviting me to give this talk. Thank you.
