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Strengthening Institutions To Power The Nation: D V Kapur
A nonagenarian like none other, Dr. D V Kapur explained the core of good institution-building and subsequent nation-building lies in disciplined project management, a conducive organisational structure, and a logical systems approach.
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The companies that oil the engine of the economy (and systems-oriented people who run it) play a crucial role in the ensuing outcome of the organisation. Post the Industrial Revolution era, economically successful organisations have become the third pillar of nation-building along with two age old pillars – Government and Civil Society. Thus explained Dr. D V Kapur, Founding Chairperson of National Thermal Power Corporation, former bureaucrat and policymaker and author of “The Bloom in the Desert – The Making of NTPC.”
Speaking at the BW Nation Builders Series inaugural episode, the 92-year-old doyen technocrat reflected on his professional experience to distil the key to building good institutions and thereby create a resilient and empowered nation. Beginning with an observation on the journey of enterprises from their mercantile approach, he reasoned how they have emerged today as partners in nation-building.
The Role Of Corporates
Highlighting some of the sons of the soil- NTPC, Reliance, the Tatas and organisations like Maruti in the automotive sector others, he explains how the contributions of these institutions play an instrumental role in nation building through varied forms. “Each of these organizations have made phenomenal contributions ... not only in the form of giving revenues to the government but also in various other forms like development of skills, managerial manpower, technology and training and that spreads all over the system, all over the country through other organizations,” Dr. Kapur explained.
Dr. Kapur had been the chairman of the board of governors for long periods of IIT Bombay, National Productivity organizations, and IIM Lucknow, among other leading technology and management entities. Adding boardroom leadership experience in prestigious organisations like Tata, Larsen & Toubro, and Reliance for 15-20 years in each case, he believes that managerial success lies in the culture that is consciously cultivated in an institution.
Quoting a survey that validated NTPC’s managerial manpower development capability, Dr. Kapur mentioned that over 2000 ex-employees of NTPC held senior positions in many of India’s corporates today--many who comprise the top management of large power companies had once started their career as NTPC executive trainees. He recollected one such executive selected by international giant Alstom to a top position in Asia who remarked, “The DNA acquired by me in NTPC drives me to achieve goals and targets for my current employers.”
The culture in NTPC, as he explains, prioritizes efficiency and productivity. With only 19-20 percent of installed power generation capacity, NTPC has consistently met 25-26 percent of electricity demand in the country. While companies like Reliance and Maruti also display a high level of productivity, Dr. Kapur remarks that the number of organizations that deliver efficient performance needs to multiply manifold for significant nation-building.
3 Key Management Parameters
Dr. Kapur, who between 1980-1986 served as the Secretary to the Government of India in the ministries of Power, Heavy Industry and Chemicals & Petrochemicals, recollects his early years with Public Sector Units (PSUs) like Bharat Heavy Electricals Limited (BHEL) and his close association with Maruti (before it became Maruti Suzuki) and with NPTC where he served as the founder Chairman-cum-Managing Director. He adds that his learnings from working with PSUs and the government and on the boards of private companies has spotlighted three crucial management parameters to build a resilient and successful organisation--project management, a conducive organisational structure, and a logical systems approach.
He explained at length that starting with the invention of PERT (The Program/Project Evaluation and Review Technique) in the US in 1957, how project management techniques help deliver value to the nation through the execution of large capital-intensive projects with no time and cost overruns.
Dr. Kapur explained the magnitude of the problem using data on public sector projects. According to the report submitted in February 2021 by the Ministry of Statistics and Programme Implementation, 44 percent of the 1736 central projects surveyed reported cost overruns amounting to INR 4.29 lakh crores. Further, considering all unreported and delayed projects across states, the aggregate amount of cost overruns could be 4-5 times higher at INR 15-20 lakh crores. Cost overruns resulting from delays are, thus, an enormous loss to national revenue. He further adds that the report also mentions the causes of delays. Most of these causes he believes, are controllable, as evidenced by NTPC. And by Reliance in building the world’s largest refinery--whose cost was much lower than what was estimated by international engineering giant Bechtel.
Learning From Neighbours
He advises that institutions should track projects from the beginning and not when the due date for results nears. This, he believes, would prepare not only the project managers but also eliminate last-minute overruns that bleed the company. Stating China as an example, he explains how the country, with its differential political and ideological stand, is a good case study for infrastructural project management. He notes how the Three Gorges project (the world’s largest of its kind) was completed on time. Learning from the neighbours, he adds, “Project managers should be trained periodically to remain updated.”
He then goes on to add that an agile organizational structure and a logical systems approach where responsibility is fixed, and leaders inside and outside the boardroom are unified and committed to learning, go a long way.
Referring particularly to many Board of Directors which in some cases operate like a king’s fiefdom, he remarked on the potential of Board leaderships in optimising productivity, efficiency, and effectiveness in operation and formulation of strategy. The participation of external directors with varied experiences and expertise hailing from different disciplines was also deemed important.
Thus, with the challenge of recovery stationed along the way, Dr. Kapur’s lessons on the makings of good leaders and good enterprises will help the nation as a whole. For he explains how people who build institutions serve as nation builders not just through revenue contribution of taxes but by inculcating reliance and contributing to scale building, managerial development, technical innovation and subsequently spreading the same through the country.