The Mahindra & Mahindra war room
20 November 1999
In his attempt to choose the most practical model to function as an "aggressive venture capitalist" (see interview), Anand Mahindra (who took over as managing director of the group flagship company, Mahindra & Mahindra Ltd, in April 1997) had a crack team of select managers from the company to answer some pertinent questions. Some of these were:
- what is the right thing to do to raise resources?
- how 'hands-off' should the managing director be?
- what are the tools for controlling decentralised SBU operations?
- what should be the performance measurement standards?
- how can global 'best practices' be disseminated across the organisation?
- what should be the group strategy for value creation?
These and many more such questions were fielded by this 'crack team' headed by Anand Mahindra himself. Says Ulhas Yargop, then a member of the team, and currently president of the telecom and IT sector of the group, "It was like going back to mangement school. The entire team pored over reams of information from books and over the Internet to create a repository of information for brainstorming."
The team also did an analysis of all the reports generated within the group and sent them to the corporate office. This analysis showed that an overwhelming number of the reports were financial in nature and that the group was not tracking non-financial aspects of the business -- like human resources, learning across the organisation, quality, and customer satisfaction.
The end of the brainstorming sessions brought out what has now become a part of the Mahindra lifestyle – the war room. The idea was borrowed from Dana Corporation of the US with, as Anand Mahindra puts it, "some elements of General Electric's 'pit' method that have been adapted for use".
The war room is the mechanics used to evaluate the SBUs that were created in the management reorganisation, and to throw up new ideas and tactics to deal with the markeplace. One of the purposes of the war room is to avoid daily interference and interaction with the SBUs by the managing director and the corporate centre. The idea is to allow the sector presidents to run their respective businesses and achieve the agreed results.
War room meetings are held once a month on a designated date. During these meetings each sector president and his core team spends an entire day with the managing director and the relevant corporate centre heads to evaluate the state of the sector business. The corporate centre has its own analysts who independently study the SBU's performance for the period under review in relation to the industry performance. The analysts' reports are circulated in advance of the meetings and are discussed threadbare at the meetings. The sector presidents bring along their brightest stars, thus giving the managing director and the corporate human resources head a means of identifying and evaluating group talent.
The main performance evaluation tool is the balanced score card that was instituted in the organisation by the crack team mentioned earlier.
The main "take out" from these war room meetings are the action plan for the sector for the coming months, identification of talent for the central talent pool, communication and dissemination of corporate information, checking the course of the sectors and ensuring that corrective actions are taken, improvement in the quality of interaction between the corporate centres and the SBUs and, lastly, as Ulhas Yargop puts it, "since all the players are persent at one place, the job gets done!"