Finally, the time is up.” When he speaks, the air of resignation is palpable in A.M. Naik’s voice. For a man who has always believed in competing hard — and winning every battle — this is an unusual admission.
Realising the Indian Dream
General Electric, one of the most admired corporations in the world, grew on the back of the American dream. It was the same story in Europe as a period of rapid industrialisation turned Siemens into a giant behemoth. By all indications, today, L&T has a similar tryst with destiny. And it needs a new person with guts of steel — and foresight to lead the charge.
Back to Basics
Throughout the Nineties, L&T entered into 50-odd JVs ranging from tractors to heavy commercial vehicles, from industrial valves to shipbuilding. Naik is now prodding his managers to get rid of fringe businesses so that it frees up leadership bandwidth. He says his executive directors haven’t been quick enough to shutter non-core businesses. “I’ve told my colleagues that if they don’t act, I will do it myself. And I’ve demonstrated it several times,” says Naik.
Their demand presented another opportunity for Naik, whose term was coming to an end by April 2004. In December 2003, Naik got his dream job, even as the Birla deal was being sewn up. He was made the executive chairman, the first one to occupy the seat after N.M. Desai vacated the seat in 1989. The board also granted him a five year extension, to allow him to remain in his post until April 2009.
There are whispers within the company that Naik is grooming Uppal for the big job, though both have denied the rumours in the past. According to the head of an L&T group company, Uppal has recently demanded that he be given a board seat by March or else he would look out. When asked, Naik chose to down play the demand. “It is a very normal expectation.”
(This story appears in the 05 March, 2010 issue of Forbes India. To visit our Archives, click here.)
This article has definitely given a dubious impression on the leadership development practices followed by L&T.
on Feb 24, 2010That was bound to happen one day. You need to send your employees to Harvard, Wharton, Princeton when they are 25,35 and not 65 to prepare them for tommorrow. Seemingly, India's largest engineering conglomerate, which had also been rated as "the best managed company" some time back has lost track of how to groom and keep leadership.
on Feb 24, 2010The main problem is L&T has not been able to sustain people in the middle management group..The major reason for this is the less salaries, when compared with competitors. As an employee of L&T, i can safely say this is the main reason. <br /> This, along with the slow and multilayered decision making process which is hampering L&T's progress has brought this situation. What L&T also needs is a change in attitude of the bosses, so that the talented young generation are groomed and see a future in L&T and feel at home at L&T. Only then can L&T progress
on Feb 24, 2010I totally disagree with some of the views presented herewith. Must say, L&T has quite a few decent \"talent grooming\" models in place. If not Harvard or so, young talents between 25-35 are encouraged to pursue Management as well as certain Specialized Courses and Training programs at reputed institutions like IIMs, SPJ, IITs etc. Apart, L&T also has various internal leadership development programs in place to enable groom young talents. Being ex-L&Tite, I can fully subscribe to this. The major problem L&T now is facing - is to have %u201Canother%u201D Mr. Naik, which I don\'t think can happen by just %u201Cgrooming%u201D. Only time will tell us whether L&T will have another Chairman & CEO or %u201Canother%u201D Mr. Naik nurture it.
on Feb 24, 2010I think the situation is the result of Top Management itself.
on Feb 25, 2010I am reminded of a saying \"Leaders produce Leaders, not the followers\". Who is responsible for this situation today? In some of the divisions of L&T, \'Sycophancy \' rules. I know of the \'bosses\' who would expect their \'subordinates\' to go to airport to pick them up at 11.00 in the night and the \'subordinates\' would be more than obliged to do the same. This was not a practice but a \'protocol\'. They came out with something called \'Management Leadership Program\' to recognise talents with in L&T a few years ago & I feel it was a koke!! (Incidentally, I was also selected for the same!! and I left after a few months my getting selected for the same). L&T has to unlearn many things to resolve the crisis. Bureaucracy must stop!! They must attract people from outside. Majority of the people working for L&T do not want to quit for many reasons. However, I strongly feel that they cannot adjust to any other (open) culture outside L&T. Many Talents have left L&T in the last year for want of good guidence!! I worked in L&T for close to a decade & I owe a lot to L&T. However, I feel I learnt much more outside L&T and got much more recognition. I strongly feel, L&T needs to bring about a lot of changes in many areas. They need a large assessment centre to assess people at various levels. They need to use a lot psychometric tools to assess people before their promotion. In a nutshell, L&T needs to revamp its PMS.
on Feb 25, 2010Till date L&T has been the best co Indian engineers can look up to. But this looking up business is short-lived as people plan their exit before entering. That is happening at the grassroots levels, what is happening at the top level that can be magnified in the same ratio. Although the company culture is very open and warm but I personally vouch that once an employee has joined L&T, he shouldn%u2019t leave for no matter what. <br /> So management has to look after only two aspects; job satisfaction & decent salaries. Only then young people who have put their first foot in the competitive world because of L&T would want to stay with the co indefinitely. As of now this is lacking. <br /> Job satisfaction to some extent exists but salaries are very less as compared to the competitors.<br /> Nevertheless I being an L&T employee myself know few people in the higher managerial cadre who still have fire in their bellies and are equally aggressive. So L&T%u2019s doesn%u2019t need to look outside to hire their heir, they should lower their expectations and give people a chance to perform. Good luck L&T.
on Feb 25, 2010Adding to Rahul Nene's comment Bureaucracy is still a big reason that company is not able to sustain and groom the talents. Even I don't see far ahead anyone who can take over the charges of Mr. Naik. Being an ex-L&Tite I experienced many problems inside the company and this is not only me there are thousands of employee who talk more or less same. Company has got The Visionary Persons but not the Persons with Vision which is the worry of Mr. Naik I personally feel
on Feb 26, 2010I would believe that a decentralised operational leadership with less interference from the central leadership should be the way to go.
on Feb 27, 2010Being longtime investor and having an independent view on the goingonns in the company it can be said that ' company bureaucracy' will soon, if not very soon 'finish' L
on Mar 1, 2010Bureaucracy is the biggest pit in the growth of any corporate. The victims of the same are young Engineers. L&T is a big conglomerate, to run this we all require a Strong Leadership after Mr. A.M.Naik.
on Mar 3, 2010Micro management starts at the very top in L&T. People are afraid of delegation frightened of losing their chair. High time for a takeover.
on Mar 3, 2010Bureaucracy, rightly said has been, and will be in the foreseeable future the greatest hurdle in any establishment be it the government or private.
on Mar 8, 2010