The Economic Times: Management experts call for Narendra Modi to learn from Malaysia’s Performance Management and Delivery Unit model

21 Sep 2013Vikas Dhoot & Anumeha Chaturvedi, ET Bureau

NEW DELHI: Here’s some textbook management advice: Not more than four layers for decision-making, 10 governance mantras, no passing the buck and delaying action, clean up office spaces, cut out clutter, improve the work culture (read really long hours).

The way the Prime Minister’s Office has been going about its business bears a close similarity to the manner in which a new CEO would set the tone of the new regime in the first few weeks at any large company.

While Prime Minister Narendra Modi has not made any big bang policy announcements in the first few weeks, barring a hike in rail tariffs and a message that other tough decisions are in the offing to revive the economy, his focus on first fixing redundant and problematic management structures has been welcomed by management experts.

“Narendra Modi is a natural leader. He understands how to lead and manage affairs efficiently, ” US-based management guru Ram Charan, an advisor to the world’s top CEOs, told ET. “Many people could take lessons out of his leadership style.”

However, experts also believe that given the overarching role that the PMO is taking on in the early days of Modi’s regime, its effectiveness and the way clout is wielded will play a key role in determining outcomes.

Moreover, given the variety of issues and stakeholders that the PMO would have to deal with, it will be better off focusing on the big picture rather than burdening itself by getting too much into the minutiae of things, they said.

For this, it could take a leaf from Malaysia’s Performance Management and Delivery Unit, or Pemandu, part of the Southeast Asian nation’s Prime Minister’s Office.

“In charge of overseeing the progress of key government programmes and reforms, Pemandu works on the principle of setting goals for departments that work in synergy, letting them thrash out the road map for that goal’s implementation and stepping in periodically to review the status and make course corrections”, said Arun Maira, former chairman of Boston Consulting Group and Planning Commission member under the previous UPA government.

In the UPA’s 10-year tenure, India had too many economists in charge with virtually no managers to implement their big ideas, Maira said. “We often miss the point that outcomes that economists like to debate on can only be achieved through strong institutions and implementation skills,” he said.

Lack of leadership skills in the PMO hurt the growth process, even though former Prime Minister Manmohan Singh himself articulated seemingly apt solutions to the country’s economic woes. “It’s not that the previous PMO had inept officers or the PM worked lesser hours than Modi. But the leadership and management skills of Singh and the principal secretary in the PMO, Pulok Chatterjee, who had little experience of making policies, were tepid at best,” said a senior government official.

As Planning Commission member, Maira spent a lot of energy on seeking to fix systemic flaws in government – an endeavor that yielded little tangible result due to a lack of political will and the leadership needed to carry out the necessary changes.

Parts of the Pemandu philosophy are already visible in Modi’s decision to put a cluster of related ministries such as power, coal and renewable energy under one minister (Piyush Goyal) and inviting ministries with a similar or complementary mandate to make presentations to Modi together.

Getting the right people in the PMO will be as important as using innovative and lateral management strategies to enable ministries to get things done rather than cluttering up the PMO’s inbox with requests for decisions or directions.

The concern is that if PMO managers aren’t persuasive enough, they could end up having to invoke the PM to get things done and Modi may not even know the sort of instructions being given in his name. This could backfire in the long run.

“The PMO can’t do everything. But it has to keep an eye on critical decisions and also give leeway to people to execute. So, finding the right balance is extremely important,” said Sri Rajan, managing director of Bain & Co., one of the world’s largest consulting firms.

If all decisions hinge on the PMO, it could lead to a different kind of policy paralysis, which was the bane of the Manmohan Singh PMO, particularly in its second innings.

“The culture of decision-making by committees resulted in a lack of clarity in the government about who is ultimately responsible for taking a decision.

Consequently, we saw delays and back and forth, sometimes at the cost of business sentiment,” said Rajan of the previous government.

Modi has already sent a strong message by scrapping multiple ministerial groups and various cabinet panels, opening a direct line of communication with top bureaucrats whose appointments are no longer ministerial prerogative, and practicing “management by walking around” as an industry captain put it.

Officials and, more importantly, his cabinet colleagues are now clear Modi wants the government to be as efficient and agile, if not more, than large corporations that are driven solely by the profit motive. As several corporate chieftains put it, line managers have been empowered to act within the realms of the board’s diktat.

With Modi picking Nripendra Misra as the principal secretary flanked by PK Mishra as the additional principal secretary — both of whom have years of experience and adopt a no-nonsense approach — officials expect a much more decisive and proactive PMO.

“One hopes that the Modi PMO will present a different and more effective model,” said Rajan.

Currently, the PMO has just four joint secretaries and nine directors handling issues concerning nearly 80 departments, 29 states and seven union territories.

Though the PMO is likely to get more officials on board in the coming weeks, it will be critical to pick managers who can delegate efficiently and keep a close watch on outcomes without being overbearing.

Harold Geneen, who established one of the earliest global conglomerates in the 1960s as president of International Telephone and Telegraph, might provide a clue on what not to do. Geneen followed the “invest and extract” approach with all the country CEOs of the group. “He got a number of accountants who went poking around and pressurised people to deliver.

He used to have big meetings, and ask tough questions. But the people on the ground felt they were not trusted at all,” said Maira, pointing to ITT’s subsequent demise while other conglomerates flourished.

The difference between ITT and the rest was that managers felt empowered in the latter. For the PMO, Maira suggests using a strategy of restrained “contingent power” — officials who deliver are encouraged while those who don’t are told about their non-performance.

When the roles involved in decisions are clearly delineated, teams make the right choices swiftly and effectively, Rajan said.

“This works for leading private sector companies and should work for the government as well, provided the willingness to act on decision-making is there,” he said. In a country as diverse as India, a one-size-fits-all approach and centralization of power are unlikely to work, so the PMO would have to assume the role of a nurturing parent company, empowering and enabling its regional chiefs and subsidiaries to succeed, as opposed to an authoritarian parent.

“Modi’s model is a management model. The people of the country wanted a manager, so that ultimately things get done,” said Maira.