Russi Mody (17 January, 1918 – 16 May, 2014) – A Tribute
I wish dedicate this Quality Fable to Russi Modi
The Mystery of Commitment
In an English breakfast of bacon and eggs, which is more committed? The pig? Or the hen?
Organizations desire commitment at all levels.
But how do you get commitment for quality from the top management? It isn’t that they are not committed. What I mean is committed-committed.
Russi Mody, Chairman of Tata Steel in the 1980s, resisted any formal quality intervention on the grounds that even the 3 percent seconds (read – rejects) of Tata Steel had a pent-up demand. Is seconds product an opportunity or a threat? By translating the 3 per cent seconds into the language of top management, the opportunity converted to a threat. The language was that of money.
The alarm for 3 percent seconds was 30 percent of total cost! This is referred to as the Cost Of Poor Quality.
Mr Mody compared that figure with his profit. He instantly became committed to drastically reducing the seconds. He assembled other members of the top management and declared war on waste! The Commander-in-Chief was none other than the legendary Dr J J Irani, Managing Director. All the rank and file from all functions stood committed to the declared war.
Why had Mr Mody not seen it this way before?
Ten years later Tata Steel became the lowest cost steel producer in the world. A further decade on it acquired Corus in the UK and, through the distinguished leadership of Ratan Tata, the then Chairman of Tata Group, Corus is today a turnaround story, importing the best practices from Tata Steel.
Finally, the answer to the original question on commitment is – the pig! He sacrifices his life.
LESSONS LEARNED
1. When you want to sell an idea to top management, speak the language of management – money
2. Lock the monetary opportunity into the strategic plan
3. Set global goals with local capabilities
4. Get the commitment first. A change in behaviour will follow
5. Inefficiencies in processes are the hatcheries for waste
6. Waste translated into Cost Of Poor Quality can trigger a thundering alarm.
