Mantra-moolaahsarva-aarambhah, Chanakya
“I had just returned from a trip to New Delhi for some work at the UdyogBhavan, in the Ministry of Textiles. Reached my office at about 5 minutes to nine, our starting time at ATIRA. Within 15 minutes, about 15 employees came to my room and ALL wanted to meet me. My suggestion that 2-3 of them should come into my room was just not acceptable; they were all agitated about something that had happened during my absence of two days. So, I suggested that we all go down to ATIRA lawn and sit near the fountain to discuss the issue, whatever it may be.” Thus, in the words of A.R. Garde, the Director of ATIRA in the beginning of year 1996, began an episode that taught several lessons to the management of ATIRA.

Policy Changed
The Policy Group, consisting of about a dozen Heads of the Departments – Deputy and Assistant Directors- were concerned about the way in which the newly recruited and quite talented scientific officers were leaving for better jobs even before their first year of probation was over. ATIRA had attempted to get them to sign a well drafted two-way agreement for service of three years. Almost all new recruits said that such binding makes them uncomfortable and is not necessary. They all said they give their ‘gentleman’s word’ that they will not leave the job before three years are over. When the PG meeting of the month was taking place, 4 out of 6 new officers had left the services of ATIRA within about 18 months of joining. The process of recruitment was of India–wide advertisement and a selection process based on a two days of interview consisting of a written subject test, general intelligence test, personality test, group discussion and personal interview by 4 seniors assessing specific traits independently. The cost of using such a selection procedure was high, but it had given good dividend over 20 years in terms of the capability of the selected individuals to work as a researcher or as a consultant. No wonder the PG was concerned about this kind of a loss, and were considering several alternatives to help stem this kind of ‘exodus’.

About 8-9 months before this meeting, ATIRA had recruited an Administrative Officer to replace the person who had retired. A search for a good person was proving difficult. The practice for recruitment was delegation of authority to the head of the department for recruitment up to the Assistant levels in own department. The recruitment of scientific officers was done under the leadership of the Director, who would not be a part of the selection committee. For the selection of the administrator, the Director appointed a committee of two Deputy Directors. On selection of the person, the Director had met him before confirming the selection. Several months had passed before the new incumbent took his post. After working for about 7 months, this Administrative Officer – AO –had requested the Director to give him a loan for buying a car. His point was that his owning a car would be appropriate for his status as AO. This request could not be granted, because the policy of ATIRA was to give vehicle loans only after completion of three years of service, including the first year of probation. The tradition in ATIRA, established over more than 45 years, was never to break any policy, not to make any exception for anyone. Exceptions, all the Directors knew, would give rise to perceptions like some are ‘blue eyed boys’, more equal than others. The policy for confirmation in service, if the work was found to be good, was to be confirm at the most after 1 year, as written in the appointment letter. Most of the time, such confirmation was given at the end of 6 months itself, since the output was found to be good. The new AO had become rather insistent about his owing a car, had been looking for a used car, and had just received an offer that was attractive as value for money. He wanted get the loan immediately.

As the PG meeting started generating alternatives for retaining the new officers, and discarding each idea as not quite right, an idea struck. Why not reduce the period after which vehicle loans are given to 6 months, from the previous 3 years? This change needs to be made only for the officer level and not for the assistant and the operative levels. After considerable discussions, the PG decided that such a policy should be tried out for about 5 years to verify whether this incentive helps to retain officers for at least the five-year period needed for repayment of the loan. Simultaneously, the desire of the AO to buy a car can be satisfied with the changed policy. The Director was to leave for New Delhi the same evening, so he left immediately after the meeting was over, by about 6 pm.

The twin task of conveying this change in vehicle loan policy for officers to the administrative section, and of conveying to the accounts section that the AO may be given the loan, was delegated to the Sr. DeputyDirector.

Unprecedented Agitation
By the time the Director reached the lawn portion near the flag pole, the group of 15 had swollen to about 30-40. They surrounded the Director on all sides and an unprecedented ‘dharanaa’ began to unfold. The demand from the staff was, “Cancel the order for giving vehicle loan to the AO.” It was apparent that none of them was in favour of the new AO getting this vehicle loan.The Director went on asking why they were making this demand. The answer was, because this loan is being given as a favour to the AO, against the rule of 3 years. The Director explained that in ATIRA, policy rules are never broken, and no favourites are played, no matter what level in hierarchy an employee occupies. This was not, of course, accepted; to them it was obvious that the ego of the Director is coming in the way of withdrawing a favour! The Director patiently explained how the PG had discussed the issue of retaining new officers, and has decided to change the policy. That is how the 3 year wait has been reduced to 6 months. The 3-4 assistants from the administration, one of them quite senior, unanimously told all others that this is NOT TRUE. They have not received any intimation of any policy change. Now the question was of credibility: WHO was lying or hiding the true situation? The Director or the staff from administration? Nobody expressed this sentiment openly, but all were feeling it. The ‘excuse’ given by the Director of having changed the policy looked exactly that— an excuse! Nobody knew of the change in policy. The Director pleaded that some of the staff gathered there should go and meet a member of the PG who was present that day. And the feeling again was that a HoD would naturally support his boss! The arguments, partly heated, went on and on, to and fro, for quite some time. Curiously, most persons in the ATIRA building were quite unaware of this drama going on near the flag pole. No one had told any of the Assistant and Deputy Directors, who were busy in their own work in their departments, about the fact that 40 persons have surrounded the Director and are making some demand.‘The man at the top’ was indeed lonely, even while sitting among forty of his fellow employees! After about 100 minutes of this drama in the hot sun of Ahmedabad, the Director realised that something has gone wrong somewhere, and it would be necessary to withdraw the sanction of vehicle loan to the new AO. He conceded the demand and the dharanaa was over.

The staff went back to their work places without any further disturbance, and the Director went back to his office wondering about this totally unexpected situation and the unprecedented behaviour of the staff. He had realised early in this game on the lawns that the unions are not behind this move. Their main leaders were not in the crowd, and the crowd of 40 had members from both the unions. There was no slogan shouting against the Director, no other issue was even talked about. Just one goal: get the car loan sanctioned to the new AO withdrawn! What had gone wrong in spite of the good work done by the Policy Group on changing the loan policy? Were some principles violated by chance or by design?

Management Principles
Acharya Chanakya’s concepts on management are very specific about how to start anything new: “Every beginning must be based on a policy or a project plan.”मन्त्रमूलाः सर्वारम्भाःImantra-moolaahsarva-aarambhaahThe word mantra has several meanings: advice, counsel, policy etc. That is how we have a PradhaanMantri and such designations. Interestingly, management guru Chanakya uses the word mantra in a specific sense in management. He has defined mantra as having 5 parts: beginning of a work, provision of men and materials, place and time, provision for unexpected difficulties, and the accomplishment of work. In short, mantra stands for ‘project planning’, the mode of a task force with a mission. This was enunciated way back in 320 BCE, 2300 years ago. Most management experts ‘know’ that ‘project planning’ was used first during World War II, and the industry picked it up in the 1950s. These experts in the West, and also managers in India, are not aware of the fact that ‘project planning’ was first defined clearly as above in the Arthashastra. This world famous comprehensive treatise on how to run a kingdom was authored by Vishnugupta under the name of Kautilya (of the Kautalgotra), and who developed management sutras under the name of Chanakya (son of Chanakya)

We will consider here only a few selected sutras of Chanakya in the context of mantra, as policy.
मन्त्ररक्षणे कार्यसिद्धिःभवति I mantra-rakshanekaarya-siddhihbhavatiProtecting the policyleads to success in work
मन्त्र विस्रावीकार्यम् नाशयति I mantra-visraveekaaryamnaashayatiOne who defaults on policy destroys the work प्रमादात् द्विषतां वशम् यास्यति IpramaadaatdvishataamvashamyaasyatiMistake results in (his) getting under control of those who are opposed (to him)

Every manger knows that a) there are no ‘laws’ in management, which is more an art than a science and b) it is nearly impossible to say with certainty what will happen if the management makes a mistake. However, Management Guru Chanakya has formulated several ‘laws of management’, in the context of behaviour of people at work. The above sutra on ’what must invariably happen when’ a mistake is made is one of the best examples of a “Law of Management”. The cause and the effect are neatly shown in this sutra. Obviously, the way in which ‘control’ by the ‘opposition’ will manifest has innumerable possibilities.
Let us analyse the ATIRA event described above by using these principles of management. Clearly, the Policy Group was aware of the fact that every new beginning must be policy based. This was indeed a tradition laid down firmly by the early directors of ATIRA and followed meticulously by the succeeding directors. But ‘getting under control of the opposition’ did happen, and the decision of‘sanction of loan to the AO’ had to be abandoned: ‘work was destroyed’. So, somewhere, some fault must have occurred and the consequence had to be suffered. A probe into what all had happened during the two days of absence of the Director brought out some startling facts.

A Chain of Mishaps
The happenings and the comments on each are given briefly below.
• The Sr. Dy. Director to whom the communications on changed policy were delegated had sent two cryptic messages: one to administration on change of loan policy, and another to the accounts section on sanction of loan to AO. Each was a strip of about 5 cm width of an A4 size paper.
• The accounts section got totally disturbed seeing this exception to an established policy, done for the new AO. They simply decided not to follow this ‘non-legal order’ from the Sr. Dy. Dir. And to wait until the Director returns. Naturally, they could not and did not convey this to the Sr.DD.
• The slip sent to the administration got buried under the pile of papers on the table, was not noticed by the senior assistant, who also had joined the protest.
• The Sr. Dy. Dir., a good person, had conveyed on phone to the A.O that his application for loan has been sanctioned and he can go ahead with the purchase of car.
• The AO, being the kind of person he was, told this gleefully to all employees from the accounts section and the administration section. ”Look, the Director has granted me the loan even though I have not completed 3 years”; the AO gloated publicly.
• This kind of boasting of his own importance caused even more ire among the staff.

No wonder that the staff wanted the order for sanction of loan to the AO withdrawn, and the statement from the Director that the policy has been changed was not believed at all. In their own way, the staff was entirely justified in demanding that the loan must not be granted.

Lessons from this Case
A thorough post mortem was done of this disaster of a policy decision gone wrong in implementation. The lessons learnt for future avoidance of such mishaps were many.

1. Delegate rightly, not correctly: The Director left it to the most senior person in the hierarchy to communicate the decisions of the Policy Group to accounts and to administration. He KNEW that this Sr. DD is a soft and goody-goody person who never spoke badly of any person. He also behaved as if when he is good, others will also be good. He had felt that the full statement on the changed policy can be made later, under the guidance of the Director, for letting all employees know about the change and the reason behind the change –namely, an attempt to retain newly recruited officers. So, he had sent just one cryptic note to the accounts section, and another to the administration. These notes were two three lines on 5 cm strips of A4 size paper! And he telephoned this ‘good news’ to the AO, without even realising the possibility of misinterpretation and misuse by the AO. The Director certainly knew the ‘good-ness’ of this Sr. DD, and he should either have told him clearly about how to proceed for communicating the PG decision, or should have selected a more people-savvy DD or AD from among members of the PG. He had failed to do either.

2. Selection Procedure Important: It became clear that the new AO was not accepted by the staff under him. Their new ‘boss’ had not done any worthwhile improvement or even a review of the work in administration during his 6-7 months after joining. He also had made it clear that he will not look after the accounts section since he has no background in accountancy. While being recruited, he was certainly told that his responsibility will be for both sections: administration and accounts. He had nodded, meaning he understood! When the Director went into the details of how this person got recruited, he discovered 3 clear deviations from the established ATIRA policy of selecting individuals for officer’s post. About 4-5 eligible candidates are called for interview, a written subject test is given, psychological tests are given and the final interview is preceded by a group discussion. The committee appointed for selection had decided to call applicants (not many had applied) one by one and not use the system meant for selection of scientific officers. They had felt that an interview would be good enough to select an administrative officer! If the psychological test for assessing the positioning on the introvert-extrovert scale were to have been given, it would have brought out a very useful trait. There is no right or wrong answer in this test, and persons who want to ‘impress’ by giving more ‘right’ answers get exposed because this test has a built-in ‘distortion score’. In general, this score is higher for Indians than Americans; and we had learnt from experience that those candidates who score high on this DS usually bluff their way through at interviews, and pose as being more knowledgeable than they are. This AO had mouthed the right kind of sentiments about ‘organisation being more important and administration ought to work for its goal’ etc. during his interview. His behaviour toward the seniors was smooth, but toward the juniors was indifferent, to say the least.

3. Assess performance timely: Performance assessment of new recruits was usually done by the Head of the Department after first six months.A decision would then be taken to either confirm him in service or to give feedback for improvement.Thereafter, the review at the end of the year would be for confirmation in service or for letting the person go. In the case of the AO, it was not clear as to who will assess; the two DDs who selected the AO or the Director, who was the hiring authority in this case. Even before such assessment, the PG. led by the Director, had considered the request from the AO to grant him vehicle loan. This slip turned out to be a major mistake. A thorough review would have brought out several negatives about this person in his role as AO.

4. Upward Communication: The dissatisfaction among the assistant staff in administration and accounts about the way in which the new AO was functioning had not been communicated upwards to any Assistant Director and above. The Policy Group was unaware of these happenings when the discussion on vehicle loan for AO was going on. The discussion was more on ‘how’ rather than on ‘whether’ to give such a loan. The feeling at the management level that ATIRA is a place where any grievance or complaint will be heard sympathetically was perhaps true, but in this case no individual member of the staff had a complaint! An assistant cannot go the ‘boss’s boss’ to tell him that the ‘boss’ is not doing his job well. But some attempt should have been made by the Director to ask one of the DDs that had recruited the AOto get a feel on what is happening — after about 3 months, if not after the very first month of service of the new AO.

5. Credibility of Management: After a few days of withdrawal of vehicle loan to the AO, the 5 cm slip sent by the DD to the administration was discovered. The news spread among all, including the 40 who were a part of the protest. One of them raised a question which all agreed was vital. The very first reaction was to ask the question that faced everyone. “Is there a date on this slip that was purportedly sent after the PG meeting? If there is, is that the date of the PG meeting or the next day? Is the ink with which the date is written the same as the text? Is the date in the same handwriting style as the sentences in the note?” Clearly, the staff was in no mood to trust the management. To cover up the matter, a note may have been prepared after the event of compelling the Director to withdraw the order of vehicle loan. Luckily, the hand writing of this Sr.DD was pretty neat and he had put the date on both those slips that he had sent on the day after the PG meeting. The genuineness of the notes was not in doubt and these were finally accepted as valid directions given after the PG meeting.

6. ”The Buck Stops Here: The management dictum that ‘the buck stops at the desk of the CEO’ is indeed true; no matter where the error occurs or a fault is deliberately created, the consequence has to be borne by the CEO. In a proprietary business, or in a private limited company, or even in a public limited company, a decision of the management to make an exception and to give vehicle loan to an individual, would not be subject to question by either the unions or by the employees. They may not like it or approve of it, but they do not protest against it.

In an NGO or in a cooperative society, such instances are not tolerated. Given the good and long standing tradition of ‘fair and just’ decisions made transparently, this aberration was intolerable. And so it was perceived, as proved by the unprecedented gherao of the Director by as many as 40 employees.

This episode had three consequences; one short term, one medium term and one long term.
• The credibility of management, which was lost for a while, was restored.
• This Administrative Officer was found to be quite unsatisfactory when his performance was evaluated at the end of the year. He was asked to leave. Legally, he was in the probationary period, and legally again, a manager who grants leave and signs leave applications of employees etc. can be dismissed without having to give reasons in writing. So, he left quietly.
• The policy agreed upon at the PG meeting, to reduce the waiting period for granting any vehicleloan to officers from 3 years to 6 months was shelved temporarily; never to be brought in again. ATIRA had lost one good opportunity to retain talented officers longer in service.

Some other consequences were not directly from this case, but came in because of change in business environment soon after the next Director took over. Funding from the government became less and uncertain. ATIRA started recruiting staff, including scientific officers, on contract basis for each sanctioned project. If no projects were to come through, the contract would not be renewed. The need for reducing the staff strength was felt strongly, and several internal transfers were made at all levels of hierarchy. A senior officer, whose field of work had become redundant, and who had good general capability, was transferred to head the administration as AO, looking after accounts as well. This method of filling the AO post continued for quite a few years.

The lessons learnt by an organisation continue to help the next generation management in two ways: to do the right things, and to avoid the wrong ones. Acharya Chanakya’s laws of management is one good source of guidance to managements in India; simply because he advises on what to do and what not to do on the basis of principles and laws based on human behaviour. The authenticity of these laws comes from the fact that these were tested out in practice for over 136 years of rule of by successive kings of the Mourya Dynasty over a large part of Bharat: from Emperor Chandragupta to Emperor Ashok. These concepts are valid today because human behaviour does not change over a short period of 2500 years!