chapter four within case analysis:...
TRANSCRIPT
Chapter Four
WITHIN CASE ANALYSIS: PART-I
CASE OF EXPLORATION & PRODUCTION (E&P) AND AVIATION
Contents
4.1. An Introduction to Unique Petroleum Corporation Limited .......................... 70
4.1.1. Genesis of BSC in UPCL ............................................................................... 75
4.1.2. Top Management Approach to BSC Implementation .................................... 77
4.1.3. Outcomes of BSC Implementation at UPCL ................................................. 80
4.1.4. Implementation Challenges – The Top Management Perspective ................. 84
4.1.4.1. Getting Buy-in for BSC Implementation ....................................................... 84
4.1.4.2. Aligning SBUs, Policies, Systems and Structures ......................................... 85
4.1.4.3. Managing PSU Related Constraints ............................................................... 87
4.1.4.4. Managing Culture ........................................................................................... 88
4.2. CASE ONE: UPCL, EXPLORATION AND PRODUCTION SBU ........ 89
4.2.1. Status of BSC Implementation in E&P .......................................................... 91
4.2.2. The Challenges- The Leaders’ Perspective .................................................... 93
4.2.3. Challenges- Employees’ Perspective ........................................................... 100
4.2.4. Challenges- Facilitators’ Perspective ........................................................... 108
4.2.5. Factors Driving Employee Buy-in for BSC ................................................. 110
4.2.6. Outcomes of BSC Implementation at E&P .................................................. 111
4.3. CASE TWO: UPCL’S AVIATION SBU ................................................. 115
4.3.1. Status of BSC Implementation in Aviation .................................................. 117
4.3.2. Challenges- The Leaders’ Perspective ......................................................... 119
4.3.3. Challenges- The Employees’ Perspective .................................................... 126
4.3.4. Challenges- The Facilitators’ Perspective .................................................... 133
4.3.5. Factors Driving Employee Buy-in for BSC ................................................. 137
4.3.6. Outcomes of BSC Implementation at Aviation ........................................... 137
4.4. Summary ...................................................................................................... 139
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Chapter Four
WITHIN CASE ANALYSIS: PART-I
CASE OF EXPLORATION & PRODUCTION (E&P) AND AVIATION
There were changes in a number of areas. Terms and conditions for purchase
was revamped and simplified. Project implementation and monitoring
streamlined and we started completing projects much faster than we ever did.
All financial transactions are now done electronically. All employee services
are computerised bringing much joy to everyone. Bill tracking ensures timely
payment to vendors. Dividend payments reach shareholders within a day of
declaration. Customers book their LPG Cylinders by SMS from their mobile
phones. There are many more like that.
- Ex-C&MD of UPCL
This chapter introduces Unique Petroleum Corporation Limited (UPCL) and discusses
the case of two of its strategic business units (SBU), one of whom is involved in
Exploration and Production (E&P) and the other in the Aviation business. It describes
the cases and analyses the emerging themes pertaining to challenges of BSC
implementation from different perspectives. Overall, the discussions and analysis of
the case is holistic and interpretations are drawn suitably.
4.1. An Introduction to Unique Petroleum Corporation Limited
Unique Petroleum Corporation Limited (UPCL) is a Government of India Enterprise
with a Navratna Status. It is listed in Fortune 500 and Forbes 2000. UPCL is engaged
in the business of refining and marketing of petroleum products with a turnover
exceeding Rs. 1.88,130 Crores (US $ 36.975 Billions) during financial year (FY)
2011-12, crude throughput of 16.19 MMT, market sales including exports of about
29.48 MMT and a market share of about 20 percent among petroleum PSUs in India
(during FY 2011-12). The business is managed through eight independent strategic
business units (SBUs). These SBUs are Exploration and Production, East Coast
Refinery (ECR) with refining capacity of 6.5 MMTPA, West Coast Refinery (WCR)
with refining capacity of 8.3 MMTPA, Retail, Liquefied Petroleum Gas (LPG), Direct
Sales (DS) for lubes and institutional customers (I&C), Projects and Pipelines (P&P)
and Operations and Distribution (O&D). All SBUs are supported by corporate
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functions such as HR, legal, finance, and corporate strategy and planning. The SBU
structure of UPCL is given in Figure 4.1, 4.2 and 4.3.
In addition to the existing refineries at Mumbai and Vishakapatnam, UPCL has
constructed a 9 MMTPA refinery at Bhatinda in a joint venture with Mittal Energy
Investments Pte. Ltd. Besides, it holds an equity stake of 16.95 percent in Mangalore
Refinery & Petrochemicals Limited. It also owns the largest lube refinery in the
country which contributes about 40 percent of the total lube oil production. The vast
marketing network (as of FY 2011) consists of 13 Zonal offices in major cities and
101 Regional Offices facilitated by a Supply & Distribution infrastructure comprising
Terminals (31), Pipeline networks, Aviation Service Stations (31), LPG Bottling
Plants (44), Inland Relay Depots (70) & Retail Outlets (9785), Lube distributors (186)
and LPG Distributorships (2505).
UPCL came into existence after the takeover and merger of Esso Standard and Lube
India in 1974; and further amalgamation of Caltex Oil Refining (India) ltd. in 1978 as a
fall out of the Government of India Act on nationalisation of oil companies. In 1979
Kosan Gas Company was also merged with UPCL. Thus, UPCL is a conglomerate of
four different entities coming together at different points of time.
In the following two decades, it enjoyed monopoly in the oil market along with other
nationalised oil marketing companies (OMCs). The Government of India (GOI)
controlled the prices of petroleum products such as petrol, diesel, LPG, kerosene etc
through administrative pricing mechanism (APM).1 The APM regime continued from
1970s to mid 1990s, until the explosive growth in petroleum sector compelled the GOI
to seek funds from private and international investors. Eventually, GOI decided on
phased deregulation of petroleum sector over a period of four to five years and
completely de-regulate the oil sector by 2002. Nevertheless, OMCs started incurring
heavy losses on account of under recoveries leading to huge fiscal deficits. Eventually,
in 2001, the GOI decided to divest the stakes in the oil PSUs. Also, opening up of the
petroleum industry witnessed the entry of private players.
1 Administred Pricing Mechanism (APM) is a mechanism to regulate domestic prices of
some of the petroleum products by a system of cross subsidy. http://www.financialexpress.com/news/administered-pricing-regime-for-psu-gas-being-
phased-out/617058 http://www.thehindubusinessline.in
Source: Adapted from the Manual of Organisation Charts Maintained by
72
Figure 4.1
Organisation Structure of UPCL
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department
HR Department at UPCL
Organis
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL
73
Figure 4.2
Organisation Structure of Marketing SBUs of UPCL
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL
Organisation
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL
74
Figure 4.3
ation Structure of Exploration and Refining SBUs of UPCL
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL
75
The oil PSUs now faced a changed business scenario and they realised the need to be
competitive if they had to survive and succeed in the changing business scenario post
liberalisation. Consequently, a number of initiatives were introduced in UPCL, with a
view to develop a customer-centric business outlook and required organisational
transformation. Balanced scorecard was one such initiative introduced.
Balanced Scorecard, in addition to building the strategic intent also helped UPCL to
focus on MOU objectives. The Indian Government as the owner and the management of
the Public Sector Enterprises negotiates and signs an agreement with public sector
enterprises (PSE), with respect to their performance management. This negotiated
agreement is called as the Memorandum of Understanding (MOU). This system of
signing MOUs was introduced in early 1990s in an attempt to move the PSEs from
management by control to management by results and objectives. BSC approach helps
strike a balance between both lead and lag objectives.
4.1.1. Genesis of BSC in UPCL
In the changed business scenario, UPCL began introspecting over their vision and
appropriate strategy. ‘It was time when the UPCL needed to learn and evolve into a
competitive and efficient organisation’ (EX-C&MD). The then HR Director (now EX-
C&MD of UPCL), took initiatives to provide strategic HR support to the marketing and
refining business lines of the organisaton. He initiated a number of HR initiatives to
make UPCL a learning organisation. Prime initiatives of HR were Learning
Organisation (LO), Acquiring Continuous Excellence (ACE), Balanced Scorecard
(BSC), and Competency Mapping and Development Center (CMDC).
Learning Organisation
LO workshops were conducted to sensitise employees on the need for continuous
learning and transforming. Visioning workshops were conducted giving employees a
feel of what the organisation shall aspire to be. The human resource team owned up the
process of organisational transformation and adopted the HR business partner model
(Ulrich, 1997) as their guiding philosophy. These learning endeavors started bringing in
transitions in the way of working and gradually UPCL evolved into a tech savvy
forward looking learning organisation.
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Under project Acquiring Continuous Excellence (ACE), a team of coaches with active
support of top management facilitated the co-creation of a vision for the organisation.
The next obvious thing after creating an inspiring vision was to determine what each
one must do in order to achieve the vision. This led to the adoption of BSC.
The Balanced Scorecard team (BSC team) facilitated translation of organisational
strategy into operational objectives. It also cascaded strategy to employees in the forms
and frames that were understood and achievable at their levels. BSC templates and
employee performance goals and targets templates were inter-linked. Each one was
expected to indentify his individual goals and targets, including his learning objectives,
in line with the four perspectives of balanced scorecard. Commenting on the necessity
of aligning employee performance management with BSC, the Executive Director-HR
of UPCL observed:
The spirit of BSC has to be integrated at the level of supervisor and
subordinate. It is at that point that the rubber meets the road in performance
management.
As strategic partner, HR introduced an organisation-wide intervention - Competency
Mapping and Development Centre (CMDC). The objective of this initiative was to
identify and develop the potential of employees. The team steering this initiative
worked with the strategic intent of building people’s capabilities in line with future
business requirements, aligning individual competencies and performance to the
Corporation’s business strategies, facilitating individuals to identify competency gaps
between existing and desired levels, building in-house expertise in all aspects of
competency development process and make these activities and processes a ‘Way of
Life’. Assessment Centers (AC)1 created healthy stress levels among employees
inspiring them to adopt relevant learning endeavors. Their Individual Development Plan
(IDP) was also created in the assessment center itself. These strategic organisational
development interventions entwined well with each other as shown in Figure 4.4.
UPCL, thus, transformed into a Learning Organisation (LO) aspiring to become a
business leader. SBUs started focusing on learning endeavors that were strategically
1 Assessment centre (AC) is not a place but a process to assess the competencies of the
employees based on standardised techniques under controlled conditions.
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relevant. Employees took interest to learn as it helped in their professional and personal
growth.
Figure 4.4
Balanced Scorecard and Learning Organisations
Source: Upadhyay, A.Y.A. 2012. ‘Balanced Scorecard- Fostering Learning Organisations
Towards Achieving Strategic Results: A Case Study of Oil PSU in India’,
Development and Learning in Organisations, 26 (4): 15
The ex-chairman of UPCL, who inspired and steered these multifaceted initiatives,
mentioned in his interview:
We introduced these initiatives at the right time. Everyone in the
organisation knew that we will be left behind if we didn’t change. People
were talking privately in despair. But they really did not know what was
wrong and what was needed to be done. The visioning exercise showed the
way. Competency studies showed what we need to have and BSC showed
how to go about it.
4.1.2. Top Management Approach to BSC Implementation
BSC was introduced in UPCL towards the end of year 2005. The steering committee
was constituted of all directors including the Chairman and Managing Director. The
Director of Human Resources was the BSC project sponsor. Core and support teams
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were set up to steer the BSC project. The Core team of BSC implementation facilitators
comprised of officers from across functions. The support team consisted of scorecard
managers from each SBU who were expected to work with their respective teams to
foster BSC implementation. KPMG was engaged as consultants for a period of one
year. They developed scorecards for corporate, marketing and refinery SBUs and
provided implementation support for two quarters. Once the overall organisational
vision and strategy was developed; it was translated into corporate balanced scorecard,
which then was cascaded to all the SBUs and support functions and further down to the
next levels till the location heads in marketing and functional heads in the refineries.
The BSC project was executed by the consultants in three phases:–
1. Revalidating strategy and designing scorecards. 176 unique scorecards applicable to
a total 424 positions were designed.
2. Providing implementation support to the scorecard owners.
3. Assessing ERP and IT capabilities to support the BSC initiative and suggesting the
Best Fit solution as and where needed.
The BSC project was initiated with a kick off meeting with senior management for
familiarisation and formally obtaining their buy-in. Extensive workshops were
conducted to build awareness and one-on-one meetings were organised between the
directors and the SBU/ function heads.
A major step was to integrate employee performance management system with BSC and
link the individual performance to unit/ department performance. In the financial year
2005-06, online employee appraisal module was rolled out and the template for writing
the yearly goals and targets was modified to incorporate the four perspectives of BSC.
The template became the Individual Balanced Scorecard (IBSC) for each officer. For
senior officers –DGM/CM to the ED- their team scorecard also became their individual
scorecard. All other officers in the team developed their IBSC in line with the objectives
of the team.
In 2007, after the consultants ended their engagement, the BSC project appeared to lose
vigor. By 2008, the UPCL management decided to revive the BSC project, and this time
the internal core team of BSC facilitators shouldered the responsibility of
institutionalising BSC. They stressed upon building awareness and engaging employees
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in the process of strategy implementation through BSC implementation. Management
approach (as understood from observations, documents and in-depth interviews of
twelve directors and executive directors) included:
1. Co-creation of organisational vision by involving employees- and unions- across
the hierarchy. Development of visions for teams and functions which were derived
from the overall organisational vision.
2. Involvement of employees in developing strategy map and scorecards for their
teams, followed by the development of their personal scorecards, specific
objectives, measures, targets and initiatives thereby bringing in the required clarity
and focus for everyone to know exactly what they needed to do.
3. Highlighting competency gaps to employees in assessment centers and helping
them to develop individual development plan.
4. Integrating learning endeavors of employees, mentioned on their Individual
Development Plans (IDPs), which were developed in the Assessment Centers, with
performance management system and team scorecards. When linked with
scorecards, the learning endeavors of the employees’ were aligned with
organisational requirement and the application of learning is immediate.
5. Providing learning support through relevant training workshops, libraries, online
training and learning portals, mentoring and coaching etc.
6. Linking employee performance management system (EPMS) with SBU and
individual scorecards.
7. Linking productivity incentive with BSC through EPMS i.e. with the performance
ratings of the SBU and the individual employee.
UPCL believed that it was important to establish proper alignment between the
personal and organisational objectives. If this link is properly established, employees
would completely and effectively be engaged. Hence, all the balanced scorecard
designing workshops at UPCL began with developing personal vision followed by
organisational vision and then followed by highlighting the link between the two. This
process enabled employees to see how they achieve their personal objectives while
working towards organisational goals. The schematic in Figure 4.5 shows UPCL’s
integrated approach to BSC implementation.
UPCL’s Integrative
4.1.3. Outcomes of BSC Implementation at UPCL
Selection of appropriate performance indicators for BSC implementation is a complex
task. This may be particularly true in case of an organisation where
nascent stages of development. In such instances Kaplan and Norton advocate the use of
narrative as a substitute. The expectation is that over time the narrative will embark
highlighting what are perceived to be the key issues in relati
against the relevant strategic issue. The narrative would thus harden into measurable
data over a period of time.
given as narratives with respect to the transitions in the wor
employee behaviours wherein hard data is not maintained.
Srinivasan (1999) emphasises the need for the Balanced Scorecard to be balanced.
Whilst mentioning particularly the ‘financial’ versus ‘non
‘results’ versus ‘performance drivers’ or ‘process’ dimensions
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Figure 4.5
Integrative Approach to Balanced Scorecard Implementation
Outcomes of BSC Implementation at UPCL
Selection of appropriate performance indicators for BSC implementation is a complex
task. This may be particularly true in case of an organisation where
nascent stages of development. In such instances Kaplan and Norton advocate the use of
narrative as a substitute. The expectation is that over time the narrative will embark
highlighting what are perceived to be the key issues in relation to the performance
against the relevant strategic issue. The narrative would thus harden into measurable
data over a period of time. Accordingly, the outcomes of BSC in the studied cases are
given as narratives with respect to the transitions in the working environment and
employee behaviours wherein hard data is not maintained.
Srinivasan (1999) emphasises the need for the Balanced Scorecard to be balanced.
Whilst mentioning particularly the ‘financial’ versus ‘non-financial’, and ‘outcome’ or
’ versus ‘performance drivers’ or ‘process’ dimensions. He
Implementation
Selection of appropriate performance indicators for BSC implementation is a complex
task. This may be particularly true in case of an organisation where BSC is still in its
nascent stages of development. In such instances Kaplan and Norton advocate the use of
narrative as a substitute. The expectation is that over time the narrative will embark
on to the performance
against the relevant strategic issue. The narrative would thus harden into measurable
Accordingly, the outcomes of BSC in the studied cases are
king environment and
Srinivasan (1999) emphasises the need for the Balanced Scorecard to be balanced.
financial’, and ‘outcome’ or
e considers that all
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aspects of the organisation’s strategy need to be balanced, if a successful scorecard is to
be constructed. Nair (2004) provides a simple mechanism to help ensure that scorecards
are properly balanced; using graphical presentational techniques on four different
competing perspectives. A Brown (1998) also highlights the need for cognitive and
behavioural changes if individuals are to be actively involved in supporting cultural
changes. Such transitions were visible in the studied cases and they are being listed with
respect to each studied case.
a) Transitions in Working Environment and Employee Behaviours
Introduction of BSC resulted in several transitions in the organisation. These were
enumerated from interviews with top management, functional and team heads, as well
as employees.
Organisation vision and strategy were discussed in the BSC awareness and designing
workshops. For the first time, SBU heads reached out to the employees and personally
explained the SBU strategy. Employees came up with feasible and innovative ideas
which, in turn, identified as initiatives to achieve the strategic objectives. The entire
team worked on developing their team scorecard and cascaded this to their personal
scorecards in joint meetings. Accountability was clearly differentiated among
employees and there was increased role clarity.
The internal business processes were reviewed, and the value propositions to be
offered to external and internal customers were jointly discussed. Thus, began a culture
of seeking feedback from internal and external customers about the job or services
being provided by a team. Such transitions were evident in certain teams while in some
others the changes were yet to set in. The pace of BSC implementation and successes
varied among SBUs and teams.
Interviews of employees indicated transitions in employee experiences, attitudes and
behaviours. Some such common observations across the respondents were as under:
1. Enhanced sense of ‘Togetherness’ among the team and belongingness to the
organisation.
2. Better understanding of the ‘Big Picture’, overall vision and strategy of the
organisataion.
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3. Enhanced meaning and value for one’s job and how it impacts the strategic
outcomes.
4. Better clarity about one’s role and accountabilities with knowledge of specific
deliverables.
5. Sense of ownership towards organisation.
6. Enhanced communication and information sharing among employees and leaders.
7. Enhanced focus on involving and engaging leaders and employees in pursuit of
strategy implementation.
8. Enhanced collaboration among employees and departments.
9. Improved interpersonal relationships among team members.
10. Renewed sense of customer, both internal and external customers.
11. Improvement in internal business processes.
12. Improved customer satisfaction.
13. Enhanced focus on competency development:
14. Improved discipline among employees and managers.
15. Systematic, focused and effective performance review meetings
16. Enhanced empowerment of frontline officers.
17. Better resource mobilisation for achieving strategic objectives.
18. Strategic orientation among employees and leaders due to continued focus on
vision and strategy.
19. Better understanding of BSC, performance outcomes and performance drivers.
20. Enhanced focus on practicing values of transparency, justice, fairness, respect for
employees and other such values in management
b) Business Performance Outcomes
Within five years of formally introducing BSC concept in UPCL, there were
noteworthy improvements in UPCL’s overall performance. In the year 2011, it was
proud recipient of the ‘Hall of Fame’ award by Balanced Scorecard Palladium. Some
of the major achievements listed in the Hall of Fame report, 2011, were as under:
1. Within five years of adopting BSC, UPCL’s revenue jumped from approximately
Rs. 795 billion ($14.4 billion) to approximately Rs. 1380.23 billion ($ 25 billion).
2. Company’s retail outlets grew by 30 percent from 6667 to 8539.
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3. Dealer supply time (the time between the receipt of purchase order and shipment)
improved from 24 hours to just 2 hours for high volume ‘category A’ dealers.
4. Refinery project delays fell from nearly 24 months to on time completion.
5. New pipeline throughput in 2010 was 11.95 million metric tons (MMT) as
compared to 6.14 MMT in 2004. The length, too, increased from 730 KMs to be
2130 KMs.
6. In 2009, the major government owned companies went on strike to protest the delay
in pay increases. During the three day long strike, UPCL officers, who declined to
join the strike, served the customer around the clock averting the crisis of complete
shutdown of the nation’s transportation infrastructure. This incident provided UPCL
a winning edge over its competitors by enhanced customer trust and gratitude.
UPCL could achieve many objectives on its scorecard, which is shown in Figure 4.6.
Figure 4.6
Balanced Scorecard of UPCL
Source: Adapted with permission from BSC documents maintained with BSC Team.
(commonly referred as Corporate Scorecard of UPCL)
The company received several awards to in praise of the success achieved. In 2008, it
received NDTV Profit Business Leadership Award. It became the only Indian aviation
fuel company to win the Golden Peacock Award in environmental management. HPCL
Learn
ing
an
d G
row
thIn
tern
al
Pro
cess
Cu
sto
mer
Fin
an
cia
l/F
idu
cia
ryC
orp
ora
te
Ob
jecti
ves
Domestic market
transformation
Conscious Corporate
Citizen
Increase value and growth
Increase value and achieve growth in
existing businessesIncrease value
and growth from new
businesses
Manage risks Optimize costs Introduce fuels of future
Improve customer/
Dealer satisfaction
Improve market
share
Increase profitability of
dealers
Increase brand
value
Effective resource allocation
Ensure Inter-SBU
coordination
Continuous benchmarking
Effective project
monitoring and implementation
Effective Joint ventures/
Alliance management
R&D and
innovation
Ensure SHE and corporate
governance
F1
F3
C1
P1
F4 F5 F6
C2 C4 C5
P2 P3 P4 P5 P6 P7
Pursue progressive oil
and gas reforms
Increase focus on
premium products
F2
F7
Improve focus on institutional
customers
C3
Attract talent
and build a high performance
culture
Increase quality of information
Improve strategic thinking
capabilities
Improve and retain domain
skills
L1 L2 L3 L4
Sustained Profitability Continuous Growth
84
refineries have been the fist in the country to produce EURO-IV MS (petrol). The HR
initiatives also received national and global accolades and awards such as World HRD
Congress and the American Society of Training and Development.
4.1.4. Implementation Challenges – The Top Management Perspective
Changes are often resisted at first and UPCL was no exception. The implementation
process faced challenges from various sources. The study and in-depth interviews with
twelve top management personnel, including the retired chairman, showed that the
challenges could be grouped in four major themes and seventeen prominent sub-
themes. These are shown in Table 4.1.
Table 4.1
BSC Implementation Challenges – The Top Management’s Perspective
THEME CODES I Buy-In for BSC
Implementation 1. Enhancing BSC Understanding
2. Cascading and Dissemination of BSC
3. Managing Skepticism
4. Commitment and Sponsorship of BSC
5. Competence of BSC Consultant and Facilitator
6. Linking IBSC with OBSC
II Aligning SBUs, Policies, Systems and Structures
7. Challenges of EPMS and Bell Curve
8. Quality and Consistency of Reviews
9. Linking Incentives with BSC
10. Modifying Systems and Procedures
11. Conflicts and Interdependency Issues Among SBUs
III Managing PSU Related Constraints
12. Bell Curve De-link from BSC
13. Competency Issues with Personnel
14. PSU Work Culture
15. Transfer and Placements
16. Political Interference
IV Managing Culture 17. Performance Oriented Work Culture
18. Values in Management Practices
19. Engaging Employees
4.1.4.1. Getting Buy-in for BSC Implementation
The first and foremost challenge for the top management was to get the buy-in of the
employees and the leaders i.e. the function heads and team heads. UPCL is a
mammoth organisation with over 11000 employees spread across the nation. Ensuring
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that everyone understood the concept of BSC, its benefits, the design intricacies and
implementation techniques was a challenging task which called for clear
communications about the matter to the last employee. This required competent and
committed BSC facilitators who could enable employees to develop their own IBSC
and understand its linkage with OBSC.
In order to ensure buy-in, a number of communication strategies were introduced such
as chairman’s web casts, corporate e-mails, fliers, in-house magazines, blogs, speeches
and town hall meetings. Skepticism was addressed in one-on-one discussions. BSC
vision and awareness workshops aimed at aligning employees’ personal aspirations to
organisational aspirations worked best to create employee buy-in. To quote the
Director –HR:
When you educate more and more people about the system, and they see it
bringing transformations, and employee feels it beneficial for him (or her)
and the organisation, that would be a major step to the success of any
change.
Nevertheless, it was observed that only when the team leader was committed to BSC,
some actual action towards implementation could happen. By itself, employee buy-in
was not enough to start the implementation process. The management approached this
through a process of learning and discussion and finalised action plans accordingly.
BSC reviews were put in place.
4.1.4.2. Aligning SBUs, Policies, Systems and Structures
Upon introduction of BSC, the management modified existing policies, structures and
systems to harmonise with BSC. However, it was extremely challenging to get the
existing EPMS with bell curve aligned to BSC.
See, that is where the challenge is to synchronise. The bell curve is not
emerging out of BSC. It is emerging out of the DPE guidelines. And how to
synchronise Bell curve philosophy vis-à-vis BSC and the performance
management is a big challenge. This challenge is not only for HPCL, but it
is a challenge for the entire public sector on which a lot of discussions is
going on. Yes it is no way related to BSC because the bell curve is a system
such that it is implemented by the percentages and not the BSC standards. (Ex-Director, HR)
DPE guidelines for Memorandum of Understanding (MOU) between CPSE and
Government Department /Ministry, while talking on performance assessment targets
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and their determination, lay emphasis on using ‘Balanced Scorecard’ approach.
Accordingly, both ‘financial’ and ‘non-financial parameters have equal weights of 50
percent each. On the other hand, the DPE guideline1 pertaining to employee
performance management system expects central public sector enterprises (CPSEs) to
have a robust and transparent performance management system using ‘Bell Curve
Approach’ and moderate employees performance ratings accordingly.
The management found it extremely challenging to strike a balance between the two
approaches. When employee performance ratings are based on the performance on
their individual scorecards, there needs to be a strong ground for moderating employee
performance ratings to fit in the bell curve. Also, it becomes extremely difficult for
management to convincingly explain the basis for the changes done in the performance
ratings to the supervisors and the employees.
If the employee performance is strictly assessed against their IBSC objectives, it
should naturally occur. Forced distribution of performance ratings to form the bell
curve in line with the percentages given in DPE guidelines would make it difficult to
explain the assessment to the employees as well as to their supervisors; and more so
when regular performance feedback and open discussions on performance is not
entrenched in the culture of the organisation.
The performance related pay was linked to both the SBU performance and the
performance rating of the employees. The employees’ performance ratings considered
for PRP were subsequent to the process of moderation to fit in the bell curve. Barring
employees rated as top performers, others felt it was not a fair representation of their
performance. This created a feeling of unjust treatment and demoralised the
employees.
While systems, policies and manuals could be modified after some effort; the major
difficulty was managing conflicts and interdependency issues among SBUs and
functions. Their focus was limited to the achievements of their respective teams.
1 DPE Circular No.2(70)/08-DPE (WC), Annexure III, (iii), dated 26-11-2008, Government
of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises, (MOU Division). Available at
http://dpe.nic.in/important_links/dpe_guidelines/wage_policies/glch4aindex
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Management addressed this challenge by introducing the concept of Service Level
Agreements (SLA)1. The BSC facilitator coordinated with SBUs and SLAs were
drawn among marketing SBUs and also with refineries. These SLAs clarified
accountabilities of each SBU. Many of the differences got resolved during the
discussions over SLAs. Also, SBUs were required to incorporate the dependencies of
other SBUs and functions while developing their SBU scorecards.
4.1.4.3. Managing PSU Related Constraints
As stated earlier, delinking the bell curve and BSC posed a major challenge to top
management. Additionally, the interviews indicated the challenges of PSU work
culture. Though many of the respondents began by denying that being a PSU was a
challenge, in the course of interviews they admitted and highlighted challenges that
were specific to PSU culture. For example, one Executive Director remarked:
Nothing stops us because we are PSU. We have this habit and brand
ourselves as PSU, feel pitiable and feel constrained. There are very small
areas where we are bound by government directives. Say for example
recruitment […]. But yes, there is a mindset issue here; an attitudinal
problem. That puts off. PSU has become a culture. It has become an
attitude. It has transcended everything else. Bachha Bachha bolta hai - PSU
hai isleyae hum join karna chahtein hai. Secutity hai, chinta nahi hai, job
security, Pahunch hoga to posting acchi milegi, secure future hai…
advantageous status for marriage etc. It has become an attitudinal issue.
Such a culture also ‘breeds incompetence and complacency’. Another ED cited the
demerits of the internal promotion policy:
Unfortunately, in our setup most of these managers are from the ranks. Our
HR promotion policy is such that we get 51 percent of the internal promotes.
They don’t have required competencies and don’t even know how to
communicate. They will never understand concepts like BSC. Fresh talented
engineers reporting to some these promotee managers–– who are terrible at
knowledge and even communication and other capabilities–, get really
frustrated. I don’t understand why this 50-50 internal promotion policy is
there. It’s an HR decision. Oh, it can be 70-30. This is actually creating
huge problems. You promote him if he’s suitable, not because non-
management pressurises that numbered promotions has to come.
1 SLA: Service Level Agreement (SLA) at UPCL was a document of agreement between SBUs
on the areas of interdependencies. Through SLAs, the concerned parties agreed upon specified level of services to be extended to each other.
88
Instances of political interferences were observed in transfers and also in the
engagement of vendors. The following response highlights some transfer related
concerns:
People, who have contacts at senior positions or in ministries, try to
manipulate postings at convenient locations. They avoid difficult locations.
Another menace of transfers is that people know they have short tenure at
one location so they focus on things that would give them immediate results
and they try to get promotions on those short term benefits and avoid
difficult projects that need long term investment and that which won't lead
results in their short term tenure.
4.1.4.4. Managing Culture
Emphasising the need to build performance oriented work culture, the present Director
of HR mentioned that:
There is positivity about BSC. It is not that it (BSC) is not integrated by
design. It is not integrated by default. It is not that somebody doesn’t want to
do it. It’s just that there is no culture around this and there is no compelling
reason to do this. At the end of the day in any function, there has to be
assessment and compelling reasons for doing this. It is not connected with
any kind of contract.
Additionally, individual values were observed to be vital to the success of any
performance management system, as the employee behaviour and priorities are
constantly guided by criterion on which the supervisor would assign performance
ratings to the employee. Thus, even when the incentives are linked to performance,
what actually gets done is what gets rewarded. The management acknowledged the
importance of practising fundamental values such as trust, justice and transparency in
the management practices and how lack of values can lead to corruptions and other
malpractices.
Eventually, it required engaging employees in strategy implementation by using BSC:
Engaging employees is the most important factor. While ensuring that
employees are engaged, we ourselves have to be good role models. The
entire dynamic of engagement is a two way relationship. It’s about
relationships. How much do we understand our people and understand what
would motivate them to give in their best. The better we understand this,
better we are in engaging them. All these relationships have ‘Values’ at
their foundation. We need to make sure there are honesty, transparency,
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trust and good intentions. If our people trust us they wouldn't be offended
even if they are chided for something.
The top management did not find resources as a challenge and mentioned that, for a
Navratna PSU, arranging resources was not at all a challenge. Some SBUs and teams
implemented all stages of BSC, and observed transformational benefits; while some
other were able to implement it only transactionally or not completely. The degree of
dissemination and integration of BSC varied across the organisation.
4.2. CASE ONE: UPCL, EXPLORATION AND PRODUCTION
(E&P) SBU
UPCL depended heavily on the import of crude oil from Middle East countries, and
the cost of crude procurement itself amounted to nearly 85 percent of the
organisational cost. Hence, it made logical and strategic sense to the organisation to
get into upstream integration. E&P SBU was formulated in the year 2007 as an
endeavor towards upstream integration. It had acquired participating interests (PIs) in
25 assets in exploration stage, and exploration initiatives were in progress. Headed
with an agile and dynamic leader, this SBU had a vision to be a ‘World Class &
Technically Proficient, with Global presence, delivering Superior Returns from a
Sustainable Balanced Portfolio with highest commitment to HSSE* and Society’.
(HSSE* = *Health, Safety, Security and Environment). In order to accomplish this
Vision, a four-pronged approach was adopted:
1. Develop and Build a Strong Foundation: To become a successful E&P operator
and take a lead role in subsurface and resource management
2. Divestment of High Risk Exploration Blocks: to re-utilise resources for low risk
acquisitions and have a balanced portfolio
3. Acquisition of Development Stage or Producing Assets: to have incremental
value growth
4. Diversification into Unconventional Resources: CSG and Shale Gas in USA &
Australia
The E&P function was new to the organisation and, to begin with, the prime focus was
to understand the dynamics of the business environment and build relevant
competencies. The SBU head strengthened the team by hiring experts in the area of
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exploration and geophysics, training and field exposure to the employees, ensuring a
performance driven, disciplined, fair and caring work environment. The structure of
E&P SBU is given in Figure 4.7.
At the time of study in early 2010, E&P was a 26 member team of highly qualified
petroleum engineers, geophysicists and geologists with an average age of just 33 years.
Study inputs were received through different modes from 19 members (7 personal
interviews and 12 responses through 3 different group interviews). The findings of
various aspects of BSC implementation in the SBU was based on triangulated data from
observations, documents and employee responses.
Figure 4.7
Organisation Structure of Exploration and Production (E&P) SBU
Source: Adapted from the Manual of Organisation Charts Maintained by HR
Department at UPCL
GM/ED – E & P
Head -Commercial
Head Technical
– International
Head Technical –Domestic
Head –Business Development
Sr/Ch.Mgr.- Geologist
Sr/Ch.Mgr.- Geophysicist
Pool of Geoscientists (Geophysicist, Geologists, Petroleum Engineers)
Sr/Ch.Mgr.- Drilling / Production
Sr/Ch.Mgr.- Petroleum
Drilling / Production Engineer
Manager Procurement
Executive Purchase
Sr./Ch.Manager -
Finance Procurement
Manager Procurement
Manager –Business Development
Company
Secretary
Manager
– HSE
Executive -
Legal
Executive –
Human Resources
Confidential
Secretary
4.2.1. Status of BSC
E&P introduced BSC in
and team members followed
participated. The strategy
two levels i.e. the function
were expected to refer
indicators (KPIs) based
yearly goals and targets
system. Thus, BSC was
The strategy map for the
Balanced Scorecard
Source: Adapted with permission from BSC documents maintained
Exploration and & Production SBU (now transferred)
There was not much involvement
lost interest in BSC. Nevertheless,
targets of each employee
reviewed business performance
BSC template. In the small
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BSC Implementation in E&P
the year 2008. The SBU vision was co-created
followed by strategy session in which all senior
strategy then was broken down into a SBU scorecard
function head’s levels and team heads. Employees
their respective scorecards and draw their
on the distribution of work. These KPIs formed
set by the employees for employee performance
was linked with the employee performance manageme
the E&P SBU is given in Figure 4.8.
Figure 4.8
Scorecard of Exploration and Production (E&P
Source: Adapted with permission from BSC documents maintained with
Exploration and & Production SBU (now transferred)
involvement of the facilitator, and hence, after
Nevertheless, the SBU head personally ensured
employee were in alignment with the SBU vision and
performance regularly; though without specifically
small team of twenty six people, even though
created with all leaders
senior functionaries
scorecard was cascaded to
Employees in each section
key performance
formed a part of the
performance management
management system.
E&P) SBU
with SBU Head of
a while, the team
ensured that goals and
and strategy. He also
specifically referring to the
though the BSC was not
92
much discussed, everyone understood and discussed strategy. The commitment of the
SBU head to pursue the strategy inspired everyone to work towards it. By the end of
year 2011, the team reached very close to the basic strategic outcomes they had
identified for themselves as shown in Table 4.2. Table 4.2 shows the status of BSC
implementation at the time of study i.e. during May-June, 2011.
Table 4.2
Status of BSC Implementation in E&P SBU
Mile Stone BSC Implementation Status
I Pre-Implementation Stage : BSC Awareness and Buy-in
1 Awareness about the BSC Concept
The SBU and function heads understood the concept and appreciated its utility. However, the majority of the employees perceived it as something complex, however important it was, particularly for the senior & top management
2 Leaders Buy-in SBU-Head had already implemented BSC in his previous SBU and appreciated the concept well. Other leaders in the team too found it logically appealing and sensible.
3 Employee Buy-in
Since the SBU-Head was committed to implementing BSC, everyone in the team adopted it. However, the technical experts in the field observed that quite a few objectives and measures on the BSC didn’t really appear to be realistic and appropriate. This disillusioned them.
II BSC Implementation Stage: BSC Designing, Cascading, Aligning and Reviewing
1 Designing Strategy Map & BSC Template
The SBU, function and team scorecards were collectively designed. Further, the individual employees in the team were expected to draw their KPIs by referring to the team scorecards. The designing of BSC, however, was not up to the mark as observed by some technical experts in the team.
2 Cascading While the scorecards were formally cascaded down the line, however, the support functions like legal, HR and Finance didn’t have the formally designed BSCs for their teams
3 Alignment with Vision and Strategy
Support functions, though not having any specific BSC, were included in all business discussions and were very much aligned with the overall SBU. The budgets, resources, employee training and competency building and even the organogram of the SBU were well aligned. The EPMS has been structurally integrated with SBU BSC as per the organisational policy, and thus, each one’s target setting templates were like their personal mini BSC. The KPIs were aligned with SBU strategy though not necessarily with the team BSC.
P
S
P
P
P
S
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Mile Stone BSC Implementation Status
4 BSC Review The study of the SBU revealed an interesting phenomenon. Though the reviews were regular and frequent, the BSC as such was not being referred for the SBU performance. The SBU head often had strategic meetings with his team leaders and at times with all the employees together, (as it was a small team), and they deliberated upon their performance and progress against their four pronged strategy.
III Post BSC Implementation – Sustenance Stage
1 Adapting BSC to Modified Strategy
The SBU head could manage communicating the modifications by directly addressing his small team. Subsequent to the SBU transforming into a fully owned subsidiary of the organisation, it is now planning to have a revised vision, strategy and balanced scorecard that are realistic and have no design flaws.
2 Integrating BSC as an Ongoing Management Process
In a small team, the SBU head could easily manage the strategy implementation and management process.
Successful Partially Successful Not Successful
Source: Triangulated information from BSC documents, presentations, and from
interviews of leaders, facilitators and employees.
As is obvious, the strategy implementation was leader driven and BSC was referred to
only for identifying goals and targets. The SBU head observed:
The BSC in itself can’t motivate and engage employees in the strategy
implementation process. The transactional implementation of the BSC is not
enough to ensure results. It has to be coupled with astute strategic decisions,
competent people, enabling work environment, efficient work systems
resource availability and an insightful review process that encourages
issues to be brought and addressed. Also, the cultural aspects of the
organisation dominate and define the success that can be achieved using
this tool. The organisational culture can work either as a barrier or as a
facilitator for the successful implementation of BSC. It is up to the leaders to
create that culture. Balanced scorecard tool can however, be used to
transform the culture itself, when backed by the leaders’ conviction and
continuous effort.
4.2.2. The Challenges- The Leaders’ Perspective
Initially, the SBU head tried to implement BSC; however, after a while his attention
was concentrated on achieving strategic objectives without much reference to BSC
N
P
S
P
P N
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implementation. The challenges faced by the leaders in this new SBU were many.
They are listed in Table 4.3.
Table 4.3
BSC Implementation Challenges – The Perspective of Leaders in E&P SBU
Challenge Category Challenging Factors Severity
I Developing an Appropriate E&P Business Strategy
1 Understanding Macro Business Scenario
2 Identifying Strategic Objectives
3 Identifying Strategic Competencies
4 Business Foresight
5 Resource Availability
Designing Balanced Scorecard, Cascading and Aligning
6 Understanding and Designing Scorecards
II 7 Competence of the BSC Facilitator
8 Commitment and Support of BSC Facilitator
9 Dissemination and Cascading of Scorecards
10 Bringing Alignment to Become Strategy Focused
11 Strategic Networking
III Structural Inadequacies of BSC
12 Validating Causal Relationships
13 Finding BSC Framework Not Enough for Achieving Objectives
IV Inspiring and Engaging the Leaders and Employees in the Pursuit of Business Results
14 Personal Involvement – Leaders’ Own Buy-In for Strategy and BSC
15 Managing Employee Buy-In
16 Instilling Hope and Optimism
17 Appealing to Intrinsic Motivation
H
H
L
H
H
M
H
H
M
N
M
H
N
M
H
H
H
95
Challenge Category Challenging Factors Severity
18 Developing and Nurturing Relationships
19 Developing Positive Work Environment
20 Institutionalising Work Systems
21 Employee Placements
22 Transfers
23 Objectivity in Performance Reviews
24 Coaching and Mentoring Leaders and Employees
25 Ensuring Value Based Management
26 Political Interferences
V Developing Internal Business Capabilities
27 Proactive Learning Initiatives linked with Strategy to Build People Competencies
28 Adopting New Technologies Proactively
VI BSC Reviews 29 Ongoing Parallel Reviews
30 Avoiding BSC Format for Reviews
VII Change Management 31 Structures and Policies
32 Being a PSU
33 Managing Resistance to Change
High Challenge Moderate Challenge Low Challenge No Challenge
The SBU head and other senior leaders highlighted some specific challenges:
N H M L
N
M
M
N
N
M
M
M
M
H
H
H
N
N
N
N
96
I. Developing an Appropriate E&P Business Strategy
1. Understanding the Macro Business Scenario: Being a completely new business,
developing an understanding the business, building a team of experts and
positioning the SBU in E&P business was the first and foremost challenge.
2. Identifying Strategic Objectives: Being a new business, the team had to explore
and establish a strategic thrust area. After studying the business scenario, SWOT
analysis, and the available blocks, most of which did not have a high probability of
discovery, the SBU decided to explore ‘non-conventional energy sources such as
coal bed methane and Shale Gas’ as well.
3. Identifying Strategic Competencies: As it was a completely new business, the
SBU head took the help of consultants to identify the strategic competencies and
the existing gaps.
4. Business Foresight: The biggest challenge they faced was timely and prudent
strategic decisions because of which they lost whatever possible opportunity came
their way. Lack of business savvyness came as a barrier to be able to compete in
the market and worked as de-motivating factor for the team members.
5. Resource Availability: The parent organisation had become conservative with
respect to expenses, considering its financial condition; and hence E&P business
did not receive enough resources.
II. Designing Balanced Scorecard, Cascading and Aligning
6. Understanding and Designing of Scorecards: There weren’t enough BSC
workshops to ensure that the understanding needs of BSC were complete and fully
disseminated. The scorecards were prepared in a workshop by senior leaders who
had partial understanding of the tool.
7. Competence of the BSC Facilitator: SBU head sought support of BSC facilitator
to co-create the vision & strategy and also the BSC. Some technical experts
however, felt that on account of lack of knowledge of the technicalities involved
in E&P function, the facilitators couldn’t really do much justice to the process of
translations of strategy into operational objectives and selection of right measures
and targets.
97
8. Commitment and Support of BSC Facilitators: Initial workshops were
conducted by them; however, further follow up and implementation support was
lacking from the BSC implementation support.
9. Dissemination and Cascading of Scorecards: It was a small SBU. Cascading of
scorecards up till departments were done in one sitting, However, dissemination f
the concept further down to the junior positions was not found enough.
10. Bringing Alignment to Become Strategy Focused: SBU head personally
ensured alignment of organisation structure, work systems, policies and the
support functions. Aligning each team towards strategy implementation was the
priority and he achieved this by clear communications, thoughtful proactive
planning and regular structured strategic reviews.
11. Strategic Networking: The leaders also had the challenge of developing
professional networks for business development and partnerships. The SBU head
developed professional relationships with potential partners in London, Africa and
Australia.
III. Structural Inadequacies of BSC
12. Validating Causal Relationships: There was no way the leadership team could
be sure of the causal relationships among lead and lag objectives. They lacked any
previous experience of business to bank on.
13. Finding BSC Framework Not Enough for Achieving Objectives: Leaders felt
that BSC alone cannot guide the strategy implementation. Herein, SBU head was
an astute strategist and executer and hence, he could get things happening even
without referring to BSC. The SBU head, as mentioned earlier, has been more
focused on implementing strategy. In his words:
Implementing strategy is an art. It’s not just about strategic thinking, it also
about getting your people think the same way and see the same destination
as you see and passionately traverse the same way you do to reach the final
destination. It’s all about engaging your people in the melodrama of the
strategic pursuit.[…]. It requires high degree of emotional intelligence and
it’s all about relationships.
IV. Inspiring and Engaging the Leaders and Employees in the Pursuit
of Business Results
14. Personal Involvement – Leader’s Own Buy In for Strategy: The SBU head was
of the opinion that it is absolutely essential for the head to be involved personally
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and ready lead from the front. The leader’s commitment and drive inspires the
team work towards achieving the objectives. Also, when a leader takes personal
interest in the SBU’s working he’s better aware of the ground realities, can take
better decisions and not allow slack to set in.
15. Managing Employee Buy-In: Just a handful of BSC workshops were conducted
and BSCs designed. Conscious effort for creating buy-in was not there. However,
it was not difficult as the SBU head was already well versed with the concept.
16. Instilling Hope and Optimism: The E&P SBU has so far not made any
significant discovery and every instance of a block with no discovery tended to
demoralise the team. The SBU head made sure that team morale remained high.
He ensured that the team did not lose hope and remained committed to the
evaluation of potential and exploration.
17. Appealing to Intrinsic Motivation: Even though the EPMS was linked with
productivity incentive, and outstanding achievement award, there was no other
policy linking performance with rewards and incentives. Besides, in the given
environment, with no significant discovery, the SBU head believed it was only
self-motivation that can get the team going.
18. Developing and Nurturing Relationships: The SBU head truly cared for the
people and treated them like his own family. His empathetic and caring nature
enabled him develop strong personal bonds with the team members. He said:
Developing relationships always starts from appealing to the emotions. I
reach them on their festive occasions, on their small emotional moments,
make things happy and enjoyable for them and slowly develop great and
good relations. It takes a lot of patience and I have that. As leaders we
must be able to touch the hearts. Be it customers, business partners or our
employees.
19. Developing Positive Work Environment: The SBU Head was watchful about
team dynamics and wherever necessary, he intervened to ensure positive work
environment.
20. Institutionalising Work Systems: Being a new SBU, all work systems were at
the nascent stage. Relevant benchmarks in the industry were referred to while
setting up the work systems.
21. Employee Placements: The role & responsibility of each person/position was
identified as per the qualification/position/stream and their contribution towards
meeting the SBU objective.
99
22. Transfers: The SBU had just taken shape and this problem had not arisen so far.
23. Reviewing Performance Objectively: In the words of SBU head:
Employee performance is a very sensitive issue and also very powerful. It is
the way we appraise their performance that they judge our righteousness, and
what management values. Their beliefs and behaviors towards their work are
further driven by this. Hence, I make sure that in my team employee
performance appraisal is done as objectively as possible. Actually, we don’t
wait till the quarter end. All team heads are required to continuously give
feedback, both good and bad to all their team members on every little work
done and may be record it, just as I do for them. Continuous feedback ensures
timely correction in the performance and makes an objective ground for the
leaders to assess their people objectively with facts, and rate them
accordingly in the performance review.
24. Coaching and Mentoring Leaders and Employees: There was no formal
system of coaching and mentoring. However, the SBU head had informally
initiated and supported a culture of coaching and mentoring, thereby addressing
the personal development of his team leaders and team members.
25. Ensuring Value Based Management: According to the SBU head,
When values like justice, transparency, commitment to organisation, truth,
integrity respect for everyone, are being practiced, it creates an environment
wherein everyone can trust each other and collaborate towards common
organisational objectives. The relationship bonds are stronger and this for
sure binds people together to the organisation.
Hence, the SBU head made sure that values are practiced and any deviation was
severely punished.
26. Political Interferences: Some internal politics was mentioned. Such interferences
however, were being managed by the SBU head as he was adept at dealing with it.
V. Developing Internal Business Capabilities
27. Building People Competencies Proactively in Line with Strategy & Expected
Business Scenario: Employees were sent for relevant training and exposure to
field conditions in spite of resource constraints.
28. Adopting New Technologies Proactively: Building SBU capability with the
latest technology is the cutting edge in a competitive business. Adapting to the
new technology posed some challenges, especially of resources, but the team
could tide over that.
100
VI. BSC Reviews
29. Ongoing Parallel Review Systems: The system of earlier EC and CFD reviews
continued, and BSC reviews came up as additional reviews.
30. Avoiding BSC Format for Reviews: Initially these reviews were expected in
BSC format. However, gradually, the top management did not seem to insist upon
using the BSC format and the usual system of business councils (BC) and
executive councils (EC) reviews continued. When the old was acceptable there
seemed no need for a different way of doing things.
VI. Change Management
31. Structures and Policies: Corporate policies applied with respect to this SBU as
well however, it was not observed as any challenge.
32. Being a PSU: The general perception of PSU culture is that of bureaucracy and
complacency. The SBU head kept the team on engaged in work and never had any
such issues in his team.
33. Managing Resistance to Change: It was a new SBU being formed in a new
environment with BSC in place. There was no change happening hence no question of
change.
Change management was not an issue in this SBU as it incorporated BSC in the
inception stage itself. Nevertheless, most of the members were from the same
organisation, and any mindset issues resisting the BSC way of working were effectively
addressed by the SBU head.
4.2.3. Challenges- Employees’ Perspective
The challenges as perceived by employees are broadly classified in Table 4.4
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Table 4.4
BSC Implementation Challenges – The Perspective of Employees in E&P SBU
SN Challenge Category Challenging Factors Severity
I Understanding of the BSC Concept, Strategy Maps and BSC Template
1 Understanding of BSC Perspectives-Putting Thoughts in the BSC Format
2 Identification of Strategic Objectives
3 Quantifying Intangibles
4 Forced Irrelevant Objectives & Targets
II Leaders’ Competence, Commitment and Involvement
5 Technical Expertise at Senior Positions
6 Leaders’ Engagement Levels-(Discussing Vision, Strategy and Initiatives with Employees)
7 Supervisor Prioritising on Personal Goals
8 Faith in Leadership – (Perception of Leaders’ Accountability and Transparency )
9 Leaders’ Seriousness About Using BSC – BSC Just a Formality
III Facilitators’ Competence, Commitment and Support
10 Facilitators’ Competence
11 Facilitators’ Commitment and Support
12 Facilitators’ Knowledge of Business Complexities
IV Overall Alignment 13 Alignment of the Organisational Structure
14 Alignment of Support Functions / Other functions
15 Alignment of Policies: Employee Performance Management System (EPMS)
16 Alignment of Training & Development Initiatives
17 Alignment of Budget and Resources
18 Alignment of Rewards and Incentives
V Review Related Challenges
19 Data and Information Availability
20 Time Constraints
L
L
H
L
L
L
L
L
L
L
H
H
H
H
H
L
L
N
N
M
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SN Challenge Category Challenging Factors Severity
21 IT or BSC Software
22 Representation of Operational Complexities
23 Comprehensive Representation of all Work Done
24 Consistent Performance Feedback
VI Cultural and Other Organisation Specific Challenges
25 Communication
26 Information Sharing
27 Decision Making
28 Conflict Resolutions
29 Work Systems
30 Employee Morale
31 Dissemination of BSC to Non-Management Staff
32 Perception about Organisational Care
33 Perception about Top Management Sponsorship
34 Perception about Supervisor Dominance
35 Ownership and Responsibility
36 Role Clarity
High Challenge Moderate Challenge Low Challenge No Challenge
Each of the challenges listed in Table 4.4 are described below with interview quotes:
I. Understanding of the BSC Concept and Designing of the Strategy
Map and BSC Template
1. Understanding BSC Perspectives - Putting Thoughts in the BSC Format:
Employees faced difficulty in understanding the BSC perspectives and causal
N H M L
L
L
N
N
N
N
N
N
N
L
N
M
M
M
N
H
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relationships. The team depended on discussions and brainstorming process to
identify objectives and processes. To quote a response:
Most of the works we do in E&P are very difficult to measure and usually
R&D work. Hence, we face difficulty in building BSC.” We faced difficulty
in translating our thoughts in BSC format. Nevertheless, after a number of
discussions with experienced people and with the team, we established the
way of setting up BSC and identifying measures.
2. Identification of Strategic Objectives (in new business of E&P): E&P was a new
activity. Leaders and employees themselves were not very knowledgeable about the
business and the BSC facilitator had little knowledge. The team felt the need for an
expert consultant.
3. Quantifying Intangibles: Many activities in E&P are intangible and being a new
activity, they did not really know which measure should be selected.
4. Forced Irrelevant Objectives and Targets: Some technical experts in E&P could
not really understand why an objective was placed in a particular perspective. In
one particular team, sufficient discussions did not take place and overall consensus
was missing.
II. Leaders’ Competence, Commitment and Involvement
5. Technical Expertise at Senior Positions: Only a few leaders, who had insufficient
domain expertise in E&P seemed to be posing this problem.
6. Leaders’ Engagement Levels-Discussing Vision, Strategy and Initiatives with
Employees: On various occasions, team leaders discussed SBU vision and strategy.
A few employees, however, pointed out that though the SBU head unfailingly
discussed strategy, their team head showed no interest never talked discussed
strategy nor cared about implementation.
7. Supervisor Prioritising on Personal Goals: Only a few employees mentioned this
with specific reference to their team head. They quoted:
If someone takes the initiative, the higher authorities will suppress him/her
will discuss only those matters with the head of department which will help
them to achieve their personal goals
The SBU generally had a good profile of leaders except one, who appeared more
interested in his personal career progression. He tended to steal credit for the good
work performed by someone else, prevented interaction of his team members with
the SBU head, and abused his hierarchical powers with threats of transfers and
104
spoiling the performance ratings. The following response from a newly joined
recruit reveals this reality:
People are given threats by his boss that if they will not do his personal
work, they will be transferred to very remote location; their probation
period will be extended. They would be given goals that are difficult and
cannot be achieved practically.
8. Faith in Leaders – Perception of Leaders’ Accountability and Transparency:
Members of this particular team felt that there was no transparency and
accountability. The supervisor was pursuing his personal agendas only. However,
they could relate well with SBU head and this kept them motivated. To quote:
It is quite a good relief that our head of department (he meant SBU head) is
very engaged and ensures things get done.
9. Leaders’ Seriousness About Using BSC – BSC Just a Formality: Employees
who quoted this were from a particular team and it was in reference to one leader
only. These employees in particular stated that BSC was just a formality being
completed as the top management talked about it. Other team members referred to
their HRD templates as their BSC
As implementation of BSC is top driven, employees and teams adopt BSC only if their
leaders are serious about it.
III. Facilitators’ Competence, Commitment and Involvement
10. Facilitators’ Competence: Employees were not very convinced about the
translation of E&P strategy into scorecard and felt that the facilitator needed to be
more competent.
11. Facilitators’ Commitment and Support: The facilitators for this SBU was
involved only with conducting three BSC design workshops after which he did not
seem to play any role by way of follow-up, inquiry into implementation status,
clarifying doubts, resolving issues or offering support in any manner.
12. Facilitators’ Knowledge of Business Complexities: Nearly all respondents
expected the BSC facilitator to be knowledgeable. This expectation was not
fulfilled.
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They should not just disappear. Their monthly presence and guidance is
required. […].They must educate on concept, monthly follow up on
implementation and create a drive towards strategic results.
BSC facilitator should understand various functionalities associated with
the SBU and their interconnections etc. to depth and based on that the BSC
should be building up.
IV. Overall Alignment
This team was small and located at one place. Timely and frequent communications
and information sharing, steered by the SBU head could ensure alignment in the team.
13. Alignment of Organisation Structure: As this was a new SBU, the organogram
was in a state of flux. Nevertheless it was well aligned with SBU strategy.
14. Alignment of Support Functions: The support functions were involved in all
business decisions and even though they did not have formally designed BSC for
themselves, their role and responsibilities were very much aligned to strategy.
15. Alignment of Policies- Employee Performance Management System (EPMS):
The SBU followed the EPMS of the parent organisation as many of its employees
were on deputation from the parent organisation. Structurally, EPMS had been
completely aligned to BSC, requiring employees to write their yearly goals and
targets in the BSC format on what they called HRD-I, i.e. the online template in
which employees fill their goals and targets in the year beginning. However, the
real challenge was the actual content that employees entered in templates and the
considerations of bosses who reviewed employee performance.
In this SBU, performance feedback was regularly given to employees and they
were generally happy. However, some employees felt that in their team
performance ratings were more a function of personal rapport one shared with the
boss than the actual performance at work and capabilities.
16. Alignment of Training & Development Initiatives: The SBU head ensured that
everyone received training in their respective areas. This was not at all a
challenge. Employees felt they received good training and their SBU head
encouraged learning and development.
17. Alignment of Budget and Resources: The SBU head personally ensured that the
budget and resources were aligned to strategy and were available. At times he felt
106
constraint in getting the appropriate amounts as investments in E&P are huge.
However, employees never faced any challenge with respect to resources.
18. Alignment of Rewards and Incentives: There were no specific rewards linked to
BSC performance. Most employees opined that their performance was
acknowledged with verbal appreciations and this was rewarding in itself. Most
employees seem to be fine with their performance evaluation, however, some had
very strong feelings and felt performance evaluation was biased.
V. Review Related Challenges
19. Data and Information Availability: As SBU head constantly reviewed the
SBU’s strategic performance, relevant data was maintained systematically. Some
employees mentioned data availability as a challenge. They referred to the fact
that, since the SBU so far didn’t have any major break- through in discovery of oil
or gas, there was not much data to be reported in the review.
20. Time Constraint: Since the business performance reviews were an expected
routine function, people planned accordingly and faced no time constraints except
for the few who felt that they were overburdened with other administrative
activities.
21. IT or BSC Software: The team was managing data in Excel files. However, they
there was also a lot of technical. Having BSC software would have made the MIS
and reviews even more perfect.
22. Representation of Operational Complexities: During reviews, SBU head would
go to the necessary level of detail to understand the ground situation. Every issue
got his attention.
23. Comprehensive Representation of all Work Done: Employees felt that,
although the major work was reviewed, they did much more than what was
discussed in the review. .
VI. Cultural and Other SBU Specific Challenges
During the BCS implementation, while the team worked towards achieving the
objectives, many soft factors posed challenges. For example, the attitude and approach
of the supervisor, boss- subordinate relationships, work culture aspects etc. Some such
challenges which were evident were:
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25. Communication: The SBU head ensured frequent, timely and effective
communications and also a congenial environment to ensure two way
communications. Thus, he could develop strong emotional bonds which are very
much essential engaging the team members.
26. Information Sharing: Some leaders, due to lack of ability or intentionally, were
found wanting in information sharing and clear communication. The SBU head
filled this loophole by regular information sharing and strong emotional bonds of
relationships with his team mates. An employee commented as under:
All the time comments are given very vague and subjective by the bosses.
We feel at loss to understand what to do. Only when SBU head addresses
us there is some clarity.
SBU head scheduled regular information sharing meetings and even e-mail
communications, thus ensuring everyone remains informed. He tried to inculcate
these qualities in his leadership team as well.
27. Decision Making: It was not the issue within the team. All decisions were timely
and expeditious.
28. Conflict Resolution: The support functions were included in all meetings and
decisions, and there were not many conflicts.
29. Work Systems: While forming the SBU, work systems were well defined and
being followed.
30. Employee Morale: When after hard work on the blocks no discoveries could be
reported, the team would feel de-motivated. These were times when they would
feel that they were not getting attention or that their work was not being
recognised.
31. Dissemination of BSC to Non-Management Staff: There were no non
management employee in this SBU and hence, this was not an issue here.
32. Perception about Organisational Care: The SBU head took care of the entire
team as a family. The employees felt that, they were ‘looked after’.
33. Perception about Top Management Sponsorship: The team felt the need of top
management support and encouragement and resources too. As regards BSC, not
many employees were aware or convinced of top management’s commitment and
interest in implementing BSC.
34. Perception about Supervisor Dominance: Employees in one team strongly
reported this about their boss.
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35. Ownership and Responsibility: There were few leaders lacking this and this
created moderate challenge.
36. Role Clarity: It was made very clear to everyone.
Overall, the SBU seemed to have a professional work culture. The exception was one
team whose head had an autocratic style of functioning and preferred to pursue his
personal goals over the organisational objective. Here, the team members felt that BSC
was a mere formality and promotions or career progressions were actually more a
function of favoritism, personal relationships and favors showered by bosses rather
than competence and actual work performance. Some people of this team held back
their responses to some probing questions while a few willingly share information on
the assurance of confidentiality. Disappointment and frustration was evident in this
team even though all of them believed that their SBU head is deeply engaged and
cared for all of them.
Thus, an intensive analysis of the challenges indicated that while leadership and the
alignment were not major issues, it was the facilitator’s competence, commitment and
involvement which posed a major challenge in this SBU. Accordingly, the knowledge
of the BSC concept, designing of scorecards and its implementation suffered a setback.
Also, with no breakthrough achievements to show for in exploration, the morale of
employees in this SBU was always challenged.
4.2.4. Challenges- Facilitators’ Perspective
The facilitator for this SBU could not be interviewed. However, on observing the team
a few facts became clear. Some insights could also be gained from interviews with
other facilitators.
The corporate BSC facilitator felt that there was too much work to be handled and this
prevented proper attention to all SBUs. As E&P was located in a different city, the
facilitator felt that physical distance came in the way of better involvement in the
implementation process.
The scorecard manager from the SBU worked in close association with the SBU head
for strategy implementation, but he was not an authority on the subject of Balanced
Scorecard. He was not properly trained in implementation, nor was role properly
clarified. His comments:
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Yes, I think I am the assigned scorecard manager. However, there is no
specific role or defined for me. Nor have accountabilities clarified. I do
what my boss says. I have a very clear goal and target which is in line with
the role I have in this SBU; but there is no specific goal and target that I
have with respect to BSC implementation. Isn't that the responsibility of the
BSC team? We give them all the support that they need from us; however,
we hardly see them taking any interest.
The BSC team expected the SBU heads to take keen interest in BSC implementation
and believed that as facilitators their role was only to provide support. SBU Head,
leaders and employees however felt exactly the opposite and considered BSC project
the responsibility of the BSC team. These challenges are being summarised in Table
4.5.
Table 4.5
BSC Implementation Challenges – The Perspective of BSC Implementation
Facilitators for E&P SBU
Challenge Category Challenging Factors Severity
I Team Structure and Size
1 Size of the Team
2 Work Load
3 Location of the Team
4 Reporting of the BSC Team
5 Hierarchical Issues
II Role Clarity 6 Accountabilities of the BSC Team
7 Role and Accountabilities of Scorecard Managers
8 Training of Scorecard Managers
III Competency Development
9 Training of Facilitators on BSC Concept and Implementation
10 Competencies to Conduct Training and Workshops
11 Knowledge of Business Complexities
IV Commitment and Ownership
12 Competence of Facilitator
H
L
M
M
H
M
H
M
L
L
M
H
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Challenge Category Challenging Factors Severity
13 Commitment of SBU Heads
14 Buy-in of Leaders and Employees
V Cultural 15 Communications
16 Enforcement of Decisions
17 Culture of Appeasing Supervisors
18 Willingness for the Change
VI BSC Review 19 Reviewing Abilities of the Leaders
20 BSC Software for Information Collation
21 Time and Data Constraints
VII Transfers 22 Integrating New Incumbents into BSC
23 Change in Leadership Approach to BSC
High Challenge Moderate Challenge Low Challenge No Challenge
4.2.5. Factors Driving Employee Buy-in for BSC
Both leaders and employees touched upon this aspect in direct or indirect ways. Major
leading factors that emerged were:
1. Boss’s commitment to implement BSC framework
2. Desire to bring in positive changes in the working environment
3. Expectation of objective and fair assessment during performance appraisal
4. Nature of work
5. Personal value towards work
6. Relationship bond with boss
7. Team environment and morale
Employees expected BSC to result in positive transformations and also ensure
objective and fair assessment of their performance at work. The nature of work,
N H M L
L
N
N
L
N
N
L
H
M
L
L
111
relationship with boss, overall team environment and employees own personal value
about how to approach work were other determinants that motivated employees to give
in their best at work.
4.2.6. Outcomes of BSC Implementation at E&P
a) Transitions in Working Environment and Employee Behaviours
The SBU implemented BSC right from its inception and hence, transition was not the
outcome to be assessed. The researcher looked into the characteristics of the team that
engaged and motivated employees to give in their best performance at work place.
Range of responses was as under:
1. A Passionate Leader Committed to Business Success: When the team members
saw the SBU head working so hard, they too felt inspired to work with same
commitment.
2. Faith in the SBU Head’s Competence and Values – The SBU head treated his
team as family. His past record showed he was a task master and invariably had a
remarkable success in all his previous assignments. The team felt inspired and had
tremendous faith in his abilities as is obvious from the following quote:
He is very much approachable and available to his team members and
facilitated the teams to have a professional working environment.
3. A Deep Personal Bonding with Leader: The SBU head gave personal attention
to all his team member, knew their strengths and weaknesses and without being
judgmental related with them at a personal level, thus getting a better
understanding of his people. Though he maintained a very strict discipline, he
could still manage deep personal bonds allowing the other person to share freely
with him and he supported them in their personal and professional endeavors.
4. Being Informed about Business Happenings Both at Micro- and Macro-
Levels: The SBU head emphasised the need for information sharing and would
personally share important business events at various forums i.e. meetings, review
meets, Independence Day celebration etc. He communicated by direct addresses,
e-mails, letters and memos, and reached out to the last employee in the hierarchy,
including the non-management employees. People appreciated feedback on
business performance. To quote:
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Feedback on overall performance is shared with all employees. Thus, all are
kept mentally stimulated. Modeling; simulation and evaluation etc. are used.
Feedback on performance is great.
5. Involvement in Business Meetings: The SBU head involved all his team
members in meetings by directly or indirectly seeking suggestions, giving them
business related projects to work upon and in various discussions. At no point of
time, did anyone ever felt left out.
6. Acknowledging for Their Work: Appreciation and acknowledgement of the
good work done was immediately placed. This compensated for the lack of direct
performance linked rewards which was not possible as pay and incentives in the
SBU were in line with corporate policy and guidelines. Such acknowledgements
made them feel good and rewarded and they continued their efforts to perform
well.
7. Work Allocation Considering Interest and Competence: Due consideration
was given to interest, talent and qualification while allocating work to the team
members. People appreciated this and worked with zeal. As the leader said:
First I want my people to learn and develop practical expertise in the
area in which they are professionally qualified. Hence, we have tied up
with ONGC for their training and on field exposure. This entire rigor will
pay off when we hit upon a yielding block or a business opportunity.
8. Overall Culture of Performance: The SBU head was very strict and valued hard
work and performance. As the SBU head quoted:
Once it gets in to the blood line of the organisational culture people
continue to perform and value performance. Everyone who joins the team
even later gets molded in to the existing culture of the team. It is at this
stage that I need to set up the foundation for the culture of the E&P SBU,
and I am doing it by ensuring that everyone has a lot of work, their
performance is reviewed regularly and people get rewarded on the basis
of their performance at work. Those who are not able to match the
standards are exposed to further rigor and training.
Most employees enjoyed working in such an atmosphere. They got to learn and
hone their skills and it was intrinsically very satisfying.
9. Support from All Functions Including ‘Support Functions’: The support
functions were involved in all the business meetings and discussions. SBU head
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always emphasised on overall collaboration. In such a working environment,
where support is readily available employees felt their work moved faster.
10. Employees’ Personal Value to Give in Their Best Performance at Work: This
has been a near unanimous response from the employees. Everyone has his or her
own set of beliefs and values and normally, all behavior is guided by this. Indian
culture and philosophy emphasises upon doing excellent work without expectation
of reward, (teachings from The Bhagwat Geeta). Many employees reflected this
philosophy.
11. Clearly Defined Work Systems and Work Discipline: Representing the general
view, an employee quoted that:
Clearly defined work systems were one of the factors that enabled them to
give their best performance.
12. Just and Fair Treatment (Value Based Management): Values are at the
foundation of any relationship. Relationships are so very important in running an
organisation and engaging the employees in pursuit of business objectives. The
SBU head appreciated this fact and ensured a value driven management. To quote
the SBU head:
I am very much particular about fair performance assessment, transparency,
and just and fair decisions. These values help develop a working
environment wherein employees feel like giving their best performance.
Hence, it is important to ensure value based management practices.
The above factors enhanced the quality of inner work life dynamics of employees
resulting in enhanced performance.
b) Business Performance Outcomes
E&P SBU initiated steps to critically review the existing blocks as a part of ‘Portfolio
Optimisation’ in order to have a balance portfolio and minimize exploration
investment risks. It attempted to foray in CBM and Shale Gas opportunities to support
the Gas business strategy.
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The achievements with respect to the strategic objectives on the SBU scorecards are
depicted in Table 4.6
Table 4.6
Business Performance Outcomes of E&P SBU (as of December, 2011)
SN Strategic Theme Strategic Outcomes Status
1 Developing Strategy for Emerging as a Successful E&P Operator
The SBU acquired Prize Petroleum, an already existent E&P Operator
2 Divestment of High Risks Blocks
Divested 3 blocks, after the study. Savings were to the extent of Rs. 240cr.
3 Low Risk Acquisitions with Balanced Portfolio
Acquired partnership in 1 block in India, Rajasthan
4 Acquisition of Development Stage or Producing Assets
Developed business relationships with other operator companies in this business and are expecting profitable joint venture and partnership deals mainly in Australia and Africa
5 Diversification into Unconventional Resources
Getting into CSG and Shale Gas in USA & Australia
6 Cost Saving In all their endeavors they have been extremely cost conscious. Savings in two years were up to the extent of $8.5 million.
Successful Partially Successful Not Successful
Source: Data collected and compiled from the information provided by the SBU head,
E&P, performance reports and presentations made to the top management
team
The strategic focus enabled the team to save up to nearly Rs.425crores ($8.5 million)
by way of prudent decisions and technological know-how. Rs.240 crores was saved by
simply divesting wisely (strategic review report, 2011 submitted to EC). Strategic
networking was initiated for developing appropriate tie-ups with successful companies
to forge way into business of coal bed methane (CBM) and shale gas in addition to
conventional oil and gas.
The study of this case brings forth the vital role of leader. Leaders’ ability to involve
and engage all his people in the strategy implementation process is essential for the
strategic success.
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4.3. CASE TWO: UPCL’S AVIATION SBU
In 1992 the airline industry was opened to private participation under the category of
‘air Taxi Operators’. This marked a new chapter the country’s aviation industry. The
first private commercial airlines were East West and Modi-Luft which operated in the
early 1990s. Further, Air Deccan pioneered the concept of budget air travel. Air
Deccan introduced the concept of low cost air travel (and low cost carriers) and started
operations in 2003. Domestic passenger traffic grew at well over 30 percent in the
succeeding years. The open skies policy of the government also led to growth in
International Operations. UPCL viewed these developments as an opportunity and
established a separate SBU for its Aviation Business.
With the new policies and the introduction of Open Access model at major airports
like Bangalore, Hyderabad, Delhi, Mumbai etc., the jet fuel business is also
undergoing a sea change. In this model the airport storage facilities are owned and
operated by an independent entity or a joint venture (JV). All eligible suppliers are
given access to position product at the facility.
An ‘Into-Plane’ service provider carries out the Aircraft refueling operations.
Therefore, the oil company’s role ends with positioning product at the storage. This
arrangement rids of the monopoly of the oil companies over the last link in the Jet Fuel
Value chain. But the Aviation SBU is fully cognizant of the new developing scenarios
and is prepared to face the challenges of competition and seize the opportunities.
The focus of the Aviation SBU was, in stages, on formulating strategy, increasing
market share, strengthening networks, logistics and operations capability,
Simultaneously, UPCL-Aviation entered into a techno-commercial agreement with
Chevron Global Aviation which, while enabling technical inputs for operations up-
gradation and equipment design, also boosted the Corporation’s marketing reach to the
world’s major International Airlines. Figure 4.9 gives the SBU structure.
116
Figure 4.9
Organisation Structure of Aviation SBU
Source: Adapted from the Manual of Organisation Charts Maintained by HR Department
at UPCL
UPCL-Aviation had been a success story considering the strides it made since its
inception. The current trends in the Indian Aviation Market are in sync with global
recessionary trends. The trends point to a churn in the sector and may result in
consolidation among the leading players. At the time of inception, the Aviation SBU
was a compact, cohesive team which expanded rapidly. By the time of study the SBU
had 131 management employees dispersed across 32 locations in the country. The
average employee age was 36 years.
About 75 percent of the employees were qualified professionals and the others had
risen from the ranks. Since 2005, when BSC was initiated, many people had been
transferred to and out of the SBU. The information and data was collected from
archived documents, and in- depth interviews (11 employees and 4 leaders). Besides,
group interviews (5 employees in two groups), and 1 focused group discussions
(consisting of 5 employees, but treated as one response). Thus, 17 employee responses
and 3 leader responses were received. One of the leaders was also the Scorecard
Head Aviation SBU
Ch/Sr. Manager
-Commercial
Ch/Sr. Manager
– Opns. Engg. &
Purchase
Ch/Sr. Manager
– Mktg. Opns. Ch/Sr. Manager –
Business Devpt.
Executive-
Commercial
Executive
-Branding Manager-
Customer Relation
Manager- QC,
Insp. & Trng
Manager- Opns,
Logistic & SHE
Manager- Engg.
& Purchase
Executive- QC,
Insp. & Trng Executive- Engg.
& Purchase
117
Manager for the SBU. The facilitator originally attached with the SBU provided details
and two out of three SBU heads who headed this SBU were interviewed. Subsequent
to his transfer, the first SBU head of Aviation was heading the E&P SBU at the time of
study. Thus, he was a common respondent for both the SBUs.
4.3.1. Status of BSC Implementation in Aviation
The recently updated scorecard of the SBU as developed in December 2011 is given in
Figure 4.10.
Figure 4.10
Balanced Scorecard of Aviation SBU
HPCL
STRATEGY MAP – TARGET SHIKHAR -AVIATION SBU
Significant
Financial Contribution
Strategic Relationship
with alliance Partner
Strategic
Theme
Improve Cost
Effectiveness
Customer
Financial /
Fiduciary
Internal
Processes
Capability
Building /
L&G
Superior
Sales Performance
Adoption of New
Business Model
Punctuality, Quality,
Reliability, Safety
Most Preferred
Supplier
Superior Performance With Transformation of
HP Aviation Business
Selective Network
Expansion
Balance Portfolio
Domestic/International
Competency &
Team BuildingCreating High
Performance Culture
Leveraging
Technology
Operational
Excellence
Source: Adapted with permission from BSC documents maintained with SBU Head of
Aviation SBU (scorecard made in 2011)
With the introduction of BSC in the year 2005, consultants helped design the SBU
scorecard and cascaded it to two levels till the position of in charges at locations based
aviation service facility ASF. The consultants also provided implementation support
by helping the SBU prepare BSC review reports. Nevertheless, the interaction of
consultants was mostly limited to the SBU heads and senior management at HQO.
Overall awareness about BSC among employees, especially at some remote locations,
could not be gauged, while the senior managers at HQO showed fairly good
118
understanding of the concept (as evident from the interviews). Table 4.7 describes
implementation status of BSC at Aviation SBU.
Table 4.7
Status of BSC Implementation in Aviation SBU
Mile Stone BSC Implementation Status
I Pre-Implementation Stage : BSC Awareness and Buy-in
1 Awareness about the BSC concept
Senior managers and officers in HQO office were well versed with the concept and implementation of BSC. But officers at locations, particularly junior management did not seem to know much about BCS. However, they were aware about the focus BSC Strategy.
2 Leaders Buy-in
BSC was regarded as a useful tool for strategy implementation by the leaders. Leaders’ buy in for BSC across the hierarchy was very good.
3 Employee Buy-in
Employees in junior management were inquisitive about BSC. Those who had a high level of awareness were very much in favor of implementation and integrating BSC into management processes.
II BSC Implementation Stage: BSC Designing, Cascading, Aligning and Reviewing
1 Designing Strategy Map & BSC Template
Initially, SBU initially had a well- designed BSC which was developed jointly with the consultants. However, later revisions were still being discussed.
2 Cascading Employees based at HQO locations were aware of their individual roles and responsibilities in the implementation process. This awareness was lacking among employees at other locations. There was little awareness of cascaded scorecards outside HQ.
3 Alignment with Vision & Strategy
Leaders and employees were aware and aligned with SBU strategy. Aligning support functions was a challenge. Budget & Resources too needed to be more aligned.
4 BSC Review Reviews were regular feature however. However they were not sufficiently structured along the themes, perspectives or objectives of BSC.
III Post BSC Implementation – Sustenance Stage
1 Adapting BSC to Modified Strategy
The first leader of the SBU made it a strategy focused SBU; however, not much publicity or reference was attributed to BSC. Although he followed all steps as mentioned in BSC implementation, however, he did not name it as BSC implementation.
P
S
S
P
P
P
P
P
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Mile Stone BSC Implementation Status
2 Integrating BSC as an Ongoing Management Process
Integration of BSC in management processes was gradual and it was impacted by the change in SBU leadership.
Successful Partially Successful Not Successful
Source: Triangulated information from BSC documents, presentations, and from
interviews of leaders, facilitators and employees.
The SBU leadership changed twice from the time BSC was introduced. It was evident
from the interviews with employees that the different leadership styles of the three
SBU heads impacted BSC implementation. The first Aviation SBU head was a
dynamic man and had a flair for leadership. He led his team through the
implementation process. The BSC facilitator at that time was equally capable and
committed. However, in 2007, the facilitator was assigned to other SBUs and, about
the same time, the SBU head, too, was transferred.
In 2008, when implementation was revived, both facilitator and the SBU head were
different. Many employees had also been transferred out and there were new managers
in the Unit. At the time of study in August, 2011, the HQO Aviation team was working
on reviewing their scorecards. By December 2011, they finalised a revised scorecard
which is shown in Figure 4.9.
By this time the SBU had become bigger and consisted of many ASFs located across
the country. People had changed. Many leaders had been transferred except the
scorecard manager who actually remained the saving link to ensure the continuity of
the scorecards. The SBU head that brought up the SBU to a high functioning status
was changed. The facilitator who initially supported the BSC implementation in the
SBU too was replaced by another facilitator. In fact, by the time of study, two SBU
heads had changed, and two facilitators had changed.
4.3.2. Challenges- The Leaders’ Perspective
The SBU had three heads from the date of inception till the time of study. In this study,
only the first and the present incumbent-the third-were available for discussions and
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data gathering. Most of the leaders interviewed had worked with all three heads. The
challenges faced by leaders after BSC revival in 2008 are described below and listed in
Table 4.8.
Table 4.8
BSC Implementation Challenges – The Perspective of Leaders in Aviation SBU
Challenge Category Challenging Factors Severity
I
Developing an Appropriate SBU/Department Business Strategy
1 Understanding Macro Business Scenario
2 Identifying Strategic Objectives
3 Identifying Strategic Competencies
4 Business Foresight
5 Resource Availability
Designing Balanced Scorecard, Cascading and Aligning
6 Understanding and Designing Scorecards
II 7 Competence and Commitment of the BSC Facilitator
8 Involvement and Support of BSC Facilitator
9 Dissemination and Cascading of Scorecards
10 Bringing Alignment to Become Strategy Focused
11 Strategic Networking
III Structural Inadequacies of BSC
12 Validating Causal Relationships
13 Finding BSC Framework Not Enough for Achieving Objectives
IV
Inspiring and Engaging the Leaders and Employees in the Pursuit of Business Results
14 Personal Involvement – Leaders’ Own Buy-In for Strategy and BSC
15 Managing Employee Buy-In
16 Instilling Hope and Optimism
17 Appealing to Intrinsic Motivation
18 Developing and Nurturing Relationships
N
N
N
L
L
M
H
H
H
H
L
N
L
M
L
M
M
M
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Challenge Category Challenging Factors Severity
19 Developing Positive Work Environment
20 Institutionalising Work Systems
21 Employee Placements
22 Transfers
23 Objectivity in Performance Reviews
24 Coaching and Mentoring Leaders and Employees
25 Ensuring Value Based Management
26 Political Interferences
V Developing Internal Business Capabilities
27 Proactive Learning Initiatives linked with Strategy to Build People Competencies
28 Adopting New Technologies Proactively
VI
BSC Reviews
29 Ongoing Parallel Reviews
30 Avoiding BSC Format for Reviews
VII
Change Management
31 Structures and Policies
32 Being a PSU
33 Managing Resistance to Change
High Challenge Moderate Challenge Low Challenge No Challenge
I. Developing an Appropriate Aviation SBU Strategy
SBU heads and leaders are primarily responsible for developing a business strategy
that works. The challenges of developing the strategy were minimal. Translating it in
the BSC, with the first SBU head and the first facilitator was a minimal challenge.
1. Understanding of Macro Business Scenario: This was a major challenge at the
time of inception of the SBU. The first SBU head, an astute strategist, knew how
to maneuver the competition in his favor and made this SBU a business leader.
Under him. The leaders too developed good sense of business.
N H M L
L
M
N
H
N
L
N
M
N
L
L
L
M
N
N
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2. Identifying Strategic Objectives: These objectives were clear and were
communicated to everyone in the SBU.
3. Identifying Strategic Competencies: Initially, the SBU head would personally
assess competency gaps. Later, as the SBU grew in size, the competency
development team helped assess the gaps and relevant training was given to the
employees.
4. Business Foresight: As expected from an astute strategist, the business moves of
the first SBU head were accurate and timely. He felt completely empowered and
did not feel hindered by procedures and bureaucracy. Thus, high standards of
performance were set for his successors. This became a challenge for them
5. Resource Availability: Aviation was a rapidly expanding business which brought
substantial profits to the corporation. Resources were made easily available to the
SBU. But later, as the market scenario started changing, investments were made
with greater caution. But manpower however was a constraint as in the words of
the SBU head:
We could manage all resources. However, manpower figured as a major
constraint. We were growing and there was always a lag period between our
request and the time when the manpower physically arrived.
II. Designing Balanced Scorecard, Cascading and Aligning
6. Understanding and Designing of Balanced Scorecards: The team which
worked on BSC in 2006 had almost completely changed except for the scorecard
manager. The new team had to be educated on the concepts.
7. Competence of BSC Facilitator: The fist BSC facilitator who initiated BSC and
SLAs in the SBU was perceived to be competent and inspiring. The facilitators
that followed were not considered competent:
He gave us examples that were not really referring to our kind of business.
This fellow gave us the example of the aviation company not the airline
fuel company. Our kind of case, would have given us better idea.
8. Commitment and Support of BSC Facilitator: Talking about the first facilitator,
most responses were:
She almost became a part of our team; understood our business and
supported BSC implementation […]. This kind of involvement was missing
in others.
123
9. Dissemination and Cascading of Scorecards: The non-management staff of the
SBU had no awareness or knowledge of BSCs. There was no visible linkage
between their performance rewards and the scorecard objectives. The frontline
management staff had great difficulty getting the non-management staff oriented to
the urgency of achieving strategic objectives.
10. Bringing Alignment to Become Strategy Focused: The first SBU head exhibited
dynamic leadership qualities by reaching out to and communicating with all team
members. He had succeeded in getting them aligned with strategy. The later heads
found it a challenge to maintain these standards of leadership. Even though SLAs
were signed, they could achieve the same levels of coordination and alignment with
other SBUs. The present head stated that:
Even in review, we see individual department trying to push their causes.
Getting them aligned with strategy is a challenge. Secondly, cross
functions are not able to appreciate the aviation related issues. For
example, within the SBU itself, finance guy talks only finance, operations
is try to push their agenda and so on. It is the individualistic objectives and
performance vis-a vis the overall SBU objectives. BSC talks in theory.
Tanslating it in to reality is a tough job. There is a considerable difference
between theory and what exists in reality.
11. Strategic Networking: The succeeding Business Heads could not emulate the
success of the first SBU Head with respect to networking with other industry men
and stakeholders. Such networking impacted business performance.
III. Structural Inadequacies of BSC
12. Validating Causal Relationships: Identifying and validating causal relationships
was a challenge. While designing their BSC, the team based their findings of
causal relationships their experience and wisdom.
13. Finding BSC Framework Not Enough for Achieving Objectives: The Leaders
and managers felt that even with a well designed BSC, it alone was not enough.
The framework was a useful strategy guide, but a driving force was necessary to
make it happen.
124
IV. Inspiring and Engaging Leaders and Employees in the Pursuit of
Business Results
14. Personal Involvement – Leaders’ Own Buy-In for BSC and Strategy: The
degree of personal involvement varied based on their personal values; however, this
was not a challenge to implementation.
15. Managing Employee Buy-In: Employees in this SBU were open to new
initiatives. Only the buy-in of the non-management staff was not good enough.
16. Instilling Hope and Optimism: Initially the Aviation industry was expanding and
growing business bred optimism. Later, when the business scenario changed,
leaders found it a challenge of keeping the team the team optimistic and hopeful.
17. Appeal to Intrinsic Motivation: Leadership quality determined motivation
levels. Some leaders were successful in ensuring high motivation within the team,
others not quite so.
18. Developing and Nurturing Relationships: Relationship bonds were strong
during the tenure of the first SBU head. However, it was apparent from interviewee
responses that these bonds have not sustained in the later years.
19. Developing Positive Work Environment: A performance oriented work culture
was instilled by the first SBU head. This legacy has continued. The scorecard
manager who was also the second- in- command has ensured that this has sustained.
20. Institutionalising Work Systems: Work systems were well defined and
institutionalised during the initial days of the formation of the SBU. These systems
have also continued.
21. Employee Placement: Competency fit and motivational fit were considered
placing employees on a particular job.
22. Transfers: Transfers disrupted the momentum of implementation. Integration of
BSC with this system too hadn’t happened well. Upon transfers the BSC were not
being handed over formally. Further, the new incumbents invariably requested for
several changes in the scorecard of the previous incumbent for the same position.
The system of employee transfers was perceived as a challenge even by the leaders.
23. Objectivity in Performance Reviews: Regular performance and feedback had
become an integral part of the SBU culture.
24. Coaching and Mentoring of Leaders and Employees: There was no formal
coaching or mentoring system in the organisation. However, the first head
125
introduced a culture of coaching juniors which continued over years. Employees felt
that formalising the coaching culture would be a good idea.
25. Ensuring Value Based Management: The first SBU head consciously created a
culture of valuing the values. He said:
Values form the foundation of any relationships and are depicted in any
human interaction. Right from the beginning I had visualised a culture
wherein performance is valued, and people are happy. This is something a
leader has to be on continuous vigil, or else it can slip.
26. Political Interferences: Such interferences were not many, though they were not
absent as well.
V. Developing Internal Business Capabilities
27. Proactive Learning Initiatives to Build People Competencies: The leaders could
identify the training and developmental needs of the team members with
experience and with the help of competency mapping and development center
(CMDC) team. Many of the technical and on the job trainings were carried out
internally by the seniors themselves.
28. Adopting New Technologies: Latest know-how was adopted and such moves
were always encouraged. The necessary support and back-up were available.
VI. BSC Review Related Challenges
29. Ongoing Parallel Reviews: As the SBU had a good system of information flow,
they could deal all types of reviews; nevertheless they also felt that a separate
review for BSC was repetition of other reviews and viewed such reviews as a
waste of time.
30. Avoiding BSC Format for the Review: By not focusing on the BSC format,
many strategic thrust areas got were getting ignored as the review then was totally
depended on the wisdom of the reviewer.
VII. Change Management
31. Structure and Policies: It was observed as a low challenge and mainly by the
frontline officers in the junior grades. They felt employee oriented welfare policies
and schemes immediately rewarding performance would be better.
126
32. Being a PSU: Being a PSU did not make much difference to the working culture
of the SBU. However, bureaucracy and short span of top management was quoted
as challenges coming in the way of a more professional working environment.
33. Managing Resistance to Change: Leaders and employees embraced BSC and
there seemed no resistance to change.
4.3.3. Challenges- The Employees’ Perspective
The challenges as narrated by employees in the journey of BSC implementation are
listed in Table 4.9
Table 4.9
BSC Implementation Challenges – The Perspective of Employees in Aviation SBU
Challenge Category Challenging Factors Severity
I Understanding of the BSC Concept, Strategy Maps and BSC Template
1 Understanding of BSC Perspectives-Putting Thoughts in the BSC Format
2 Identification of Strategic Objectives
3 Quantifying Intangibles
4 Forced Irrelevant Objectives & Targets
II Leaders’ Competence, Commitment and Involvement
5 Technical Expertise at Senior Positions
6 Leaders’ Engagement Levels-(Discussing Vision, Strategy and Initiatives with Employees)
7 Supervisor Prioritising on Personal Goals
8 Faith in Leadership – (Perception of Leaders’ Accountability and Transparency )
9 Leaders’ Seriousness About Using BSC – BSC Just a Formality
III Facilitators’ Competence, Commitment and Support
10 Facilitators’ Competence
11 Facilitators’ Commitment and Support
12 Facilitators’ Knowledge of Business Complexities
H
M
N
M
N
N
N
N
M
N
H
M
127
Challenge Category Challenging Factors Severity
IV Overall Alignment 13 Alignment of Organisational Structure
14 Alignment of Support Functions / Other functions
15 Alignment of Policies: Employee Performance Management System (EPMS)
16 Alignment of Training & Development Initiatives
17 Alignment of Budget and Resources
18 Alignment of Rewards and Incentives
V Review Related Challenges
19 Data and Information Availability
20 Time Constraints
21 IT or BSC Software
22 Representation of Operational Complexities
23 Comprehensive Representation of all Work Done
24 Consistent Performance Feedback
VI Cultural and Other Organisation Specific Challenges
25 Communication
26 Information Sharing
27 Decision Making
28 Conflict Resolutions
29 Institutionalising Work Systems
30 Employee Morale
31 Dissemination of BSC to Non-Management Staff
32 Perception about Organisational Care
33 Perception about Top Management Sponsorship
34 Perception about Supervisor Dominance
M
M
M
M
M
L
L
M
M
H
N
L
H
M
L
L
N
H
H
M
M
H
128
Challenge Category Challenging Factors Severity
35 Ownership and Responsibility
36 Role Clarity
High Challenge Moderate Challenge Low Challenge No Challenge
In the year 2005, a formal cascading of BSC carried out by the consultants. However,
not everyone was adequately educated on the subject. As the SBU grew and with
leadership changes, the element of personal touch gradually reduced. Though the
strategy focus was sustained through various communications, the awareness about the
BSC concept could not be sustained among the junior management. This was obvious
from the following response:
We know there is something as target ‘Shikhar’, we know about the
operational excellence framework on which we keep working; are they the
by-products of BSC? We don’t know if there is any linkage of all this to
BSC. […] Who is a BSC coordinator? No one ever explained that complex
looking diagram. It is confusing and people don’t want to look at it.
Obviously, the importance and objectives of BSC had not reached the lower echelons
of the hierarchy. Some of the challenges employees faced were as under:
I. Understanding the BSC concept and Designing of the Strategy Map
and BSC template
The understanding of BSC concept and its components was clear to a majority of the
employees at locations.
1. Understanding of BSC Perspectives - Putting Thoughts in BSC Perspective:
The officers lower in the hierarchy and based outside HQO locations were not
sufficiently exposed to BSC workshops. They could not think in terms of BSC
perspectives.
2. Identification of Objectives: Objectives were identified by leaders based at HQO
and percolated to lower levels in HRD templates at the time of writing employee
goals and targets. Employees followed the priorities as advised.
3. Quantifying Intangibles: Employees found the abstractness of L&G perspective
to be a challenge. They did not know how to make it measurable
N H M L
L
L
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4. Forced Irrelevant Objectives and Targets: The cascading was top down.
Objectives and targets identified on BSC made sense to all employees, though
some felt that a few targets appeared extremely stretched.
II. Leaders’ Competence, Commitment and Involvement
5. Technical Expertise at Senior Positions: Leaders at senior positions were
experts in their domain areas. They guided the team well.
6. Leaders’ Engagement Levels-Discussing Vision, Strategy and Initiatives with
Employees: The SBU did not face any challenge in this respect. Leaders were
committed and discussed strategy frequently.
7. Supervisor Prioritising on Personal Goals: Leaders were more focused on job
priorities. Their personal progress in the hierarchy was their focus area. However,
they achieved this through teamwork.
8. Faith in Leadership – Perception of Leaders’ Accountability and
Transparency: Employees did not see this as a challenge.
9. Leaders’ Seriousness about Using BSC – BSC just a formality: In the absence
of sufficient support from BSC facilitators, the leaders themselves advised on
relevant goals and targets, aligned them with strategy, and to the roles of team
members. However, BSC was never discussed as a tool. This is perhaps one
reason why employees could not relate sufficiently h with BSC.
III. Facilitators’ Competence, Commitment and Support
10. Facilitators’ Competence: The SBU had so far three BSC facilitators. Referring
to the first one, employees mentioned;
Our BSC facilitator was very good. She invariably kept a good follow up
and made sure we understood each and every concept.
As regards the other facilitators, employees expected more involvement and
support.
11. Facilitators’ Commitment and Support: Facilitator’s support diminished with
change of facilitator. Referring to the present situation, some employees
mentioned:
Presently, we don’t even know who our BSC coordinator is.
130
12. Facilitators’ Knowledge of Business Complexities: Pointing out the behavior of
the current facilitator, employees mentioned:
BSC Coordinator wants to be away from decision making as he is not aware
of the facts existing in the SBU. Efforts should be made to have one BSC
Coordinator for each SBU to be part of discussions and guide the process.
IV. Overall Alignment
13. Aligning of Organisational Structure: The organisation structure of Aviation
SBU was well regarded and there were no issues.
14. Alignment Support Functions / Other Functions: While coordination within the
Unit was good, the support functions and other SBUs weren’t perceived to be
sufficiently aligned.
15. Alignment Policies- Employee Performance Management System (EPMS):
Organisation wide EPMS was aligned with BSC. Employees HRD template was
their PBSC. However, employees’ performance rating especially after moderation
could not directly be aligned to the performance on respective scorecards. Some
extreme response with respect to EPMS were:
Unlike earlier days, now there is no focus on the core activities and any
clarity and purpose in goal setting. Everything is being done for the sake of
formality only.
16. Alignment Training and Development (T&D) Initiatives: T&D initiatives were
well aligned during the initial years of the SBU formation. However, in the later
years, this alignment was somewhat disturbed and employees could not relate
properly with it.
17. Alignment Budget and Resources: The SBU faced no constraint of budget and
resources. Leaders however, cited manpower constraints.
18. Alignment Rewards and Incentives: Performance related pay (PRP) was based
on employees appraisal ratings. Further, HR instituted awards such as ‘outstanding
achievers1’ and ‘UP-Icon2’. However, employees did not perceive it to be having
real motivating effect. The following quote shows the supremacy of the leaders’
inspiration over these formally constituted rewards:
1 Outstanding Achiever:The award instituted to recognise outstanding contribution of
junior management. 2 UP-Icon: The award instituted to recognise the great contribution and outstanding
leaders in middle and senior management.
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Other rewards, like Outstanding Achievement Award etc. have actually got
no meaning for us… Even PMS was never a motivator for us. It was the
encouragement from SP (the first SBU head) that mattered most. Pivotal
role was played by the enthusiasm and the passion of our leader SP. He
inspired all of us.
V. Review Related Challenges
19. Data and Information Availability: Earlier in a smaller team data and
information flowed in both directions- top-down and bottom up. Later, in the
interviews, it showed up that locations were not getting feedback and information
about reviews from the HQO.
20. Time Constraints: Manpower Constraints meant increased workload for
employees and hence, not much time was available at their disposal as highlighted
here,
21. IT or BSC Software: Employees with little knowledge of the concepts could not
comment; however those at HQO strongly felt that introduction of BSC Software
was the need of the hour.
22. Representation of Operational Complexities: Employees felt that, ground
realities were being discussed in the reviews. Most review presentations attempted
to project a positive picture.
23. Comprehensive Representation of all Work Done: While referring to reviews,
employees mostly referred to their HRD review. A common observation was:
While writing the quarterly reviews it is felt that many of the activities carried out
are not part of KPI hence do not form part of review. May lead to reviews with
total justice not been done.
24. Consistent Performance Feedback: It was in the culture of the Aviation SBU.
VI. Cultural and Other Organisation Specific Challenges
25. Communication: Initially communications were open and effective. Later there
was a diminution of these characteristics.
26. Information Sharing: Information sharing had been the norm. However, recently,
employees at locations felt that they were not getting enough information about
reviews at HQO and personnel feedback from these reviews. They felt this need as
many of them were used to getting such information by e-mails and through other
channels during earlier days.
132
27. Decision Making: Both leaders and employees saw it as a challenge. Employees
opined that upon change in plan changes abruptly, constraints arise. Suddenly,
there is a lot of chaos.
28. Conflict Resolution: Conflicts were evident wherever there were
interdependencies on other SBU and functions. As confirmed by some managers,
Though SLAs were in place, they were not being invoked or executed.
29. Institutionalising Work Systems: The work systems were well defined and
instituted by the first SBU head and it had got into the culture of the SBU.
30. Employee Morale: Recently, with the changing business scenario, aviation
industry started facing challenges and market shares started dropping. The de-
motivating impact of this was visible to some extent.
31. Dissemination of BSC to Non-Management Staff: BSC had not percolated to
the non-management employees even though they were considered an important
link in the execution of business. The frontline officers observed:
Our non-management is not involved in BSC so far. They do the ground
work. Without them it won’t happen. Non management too needs to be
involved. Without their cooperation, it is very difficult for us to give results.
32. Perception about Organisational Care: Some of the youngsters expressed that:
The organisation is less concerned about its employees. I was sent to a
jungle for training. There is no point in making employees sad. Salaries,
benefits and transfers should be compassionately considered.
33. Perception about Top Management Sponsorship: Even though most people
observed their leaders to be committed to the organisation, some even observed:
My feeling is that the BSC has become one of the activities which is being driven by
top management with the frontline having very little role to play. They have not
been able to involve the front line which comprises of junior officers and non-
management staff.
34. Perception about Supervisor Dominance: In Aviation SBU leaders were
generally perceived to be supportive and involved employees in all activities.
35. Ownership and Responsibility: Some employees pointed out this issue with
non-management staff.
36. Role Clarity: Senior leaders ensured role clarity for everyone in the team.
133
Overall employees who were aware of the concept felt that BSC is definitely required
and all metrics should be business centric. They opined that BSC aims at measuring each
and every KPI in scientific way and sends alerts wherever performance falls short.
Corrective action can be initiated in time.
4.3.4. Challenges- The Facilitators’ Perspective
As such, the BSC facilitators did not face many major issues in the Aviation SBU. The
first facilitator was very much optimistic about the success of BSC in this SBU as the
SBU head was supportive. Leaders and employees too showed enthusiasm about BSC.
She managed to develop the challenges narrated here were mostly from the point of
view of the first and the second facilitator. Table 4.10 lists the challenges and their
severity.
Table 4.10
BSC Implementation Challenges – The Perspective of BSC Implementation
Facilitators for Aviation SBU
Challenge Category Challenging Factors Severity
I Team Structure and Size 1 Size of the Team
2 Work Load
3 Location of the Team
4 Reporting of the BSC Team
5 Hierarchical Issues
II Role Clarity 6 Accountabilities of the BSC Team
7 Role and Accountabilities of Scorecard Managers
III Competency Development
8 Training of Scorecard Managers
9 Training of Facilitators on BSC Concept and Implementation
10 Competencies to Conduct Training and Workshops
11 Knowledge of Business Complexities
H
L
H
M
M
H
L
L
M
M
M
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Challenge Category Challenging Factors Severity
IV Commitment and Ownership
12 Competence of Facilitator
13 Commitment of SBU Heads
14 Buy-in of Leaders and Employees
V Cultural 15 Communications
16 Enforcement of Decisions
17 Culture of Appeasing Supervisors
18 Willingness for the Change
VI BSC Review 19 Reviewing Abilities of the Leaders
20 BSC Software for Information Collation
21 Time and Data Constraints
VII Transfers 22 Integrating New Incumbents into BSC
23 Change in Leadership Approach to BSC
High Challenge Moderate Challenge Low Challenge No Challenge
I. Team Structure and Size
1. Team Size: It was a small team of 2 to 5 members at any point of time.
Coordinating for eight SBUs and Corporate Scorecard was difficult.
2. Work Load: Every member had multiple responsibilities. The workload prevented
them from giving their best attention. The first BSC facilitator who initiated BSC
implementation at Aviation SBU said:
Aviation was a wonderful team. They were so receptive and cooperative.
Had I not to attend to corporate scorecards, SLAs pertaining to other
SBUs, and all other equally important chores of the BSC team, I would
have made sure everyone in the SBU would have known and designed their
own BSC. Cascading then could have been far better.
3. Location of the Team: BSC team was based at HQO in Mumbai. Visiting distant
locations to conduct BSC workshops became difficult for the facilitators.
N H M L
H
L
N
N
L
N
N
L
H
N
L
L
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4. Reporting of the BSC Team: The BSC team reported to the office of C&MD
through Director Marketing. Thus, they had direct access to top management to
appraise them on the status of BSC implementation and seek necessary support.
However, they had to deal with SBU heads who were usually EDs for coordinating
BSC implementation, and hierarchy sometime posed a challenge.
5. Hierarchical Issues: BSC facilitators were mostly dealing with people senior to
them. Considering the open and inclusive culture of Aviation, authority and
hierarchy did not pose much challenge.
II. Role Clarity
6. Accountabilities of the BSC Team: The BSC team felt that the SBU heads should
be driving the BSC implementation. The facilitator’s role should be limited to
educating users on the concepts and scheduling reviews. On the other hand, SBU
heads expected initiative and guidance on implementation to come from the BSC
Team.
7. Role and Accountabilities of the Scorecard Manager: When BSC was first
introduced in the SBU, the SBU head realised the importance of specifying the role
of the scorecard manager. The scorecard manager mentioned:
Though there was no formal communication on the role of the scorecard
manager, the SBU head understood the need of it and the expectations
from him were made clear. It was also included in his HRD goals and
targets.
Later, SBU heads changed and also many employees got transferred, but the
scorecard manager remained the same till the time of study.
III. Competency Development
8. Training of Scorecard Managers about BSC: The scorecard manager had basic
necessary exposure to the concept which he developed on his own initiative.
Hence, for him, there were no challenges.
9. Training of Facilitators on BSC Concept and Implementation: The facilitators
were given relevant training and exposure to understand the concept.
Understanding was not an issue.
10. Competency to Conduct BSC Workshop: Facilitators were provided ‘train the
trainer’ and other such learning opportunities to help them become good trainers.
136
11. Knowledge of Business Complexities: The first facilitator had a almost become a
part of the team, and knew everything that was going on. Later facilitators were not
so involved.
IV. Commitment and Ownership
12. Competence of Facilitator: Not every facilitator felt really committed to
implementation. The later ones were discouraged by the responses of senior
personnel.
13. Commitment of SBU Heads: All three SBU heads appreciated the concept;
however, the first one was more aggressive on strategy implementation.
14. Initiatives of Leaders and Employees: Various initiatives were taken up by the
leaders and employees to meet strategic goals, but these initiatives were taken
keeping in view business imperatives.
V. Cultural
15. Communication: Facilitators did not see communications as a challenge in SBU.
16. Enforcing Decisions: All decisions taken in the meetings were actually followed
up and things got done in this SBU. This, too, was not a problem.
17. Culture of Appeasing Boss: While boss’s instructions were valued, employees
could easily put forward their views. One of the employees of the SBU shared:
The culture of the aviation SBU was consciously built by the SBU head
while it was being shaped. He believed in the inherent capacity of each
individual and therefore promoted a culture wherein everyone can
express themselves freely and frankly.
Thus, by keeping everyone involved and respecting their opinions, suggestions
and participation, he could also get the entire team engaged.
18. Willingness for the Change: Employees and leaders in this SBU came across as
willing to bring in positive changes.
VI. BSC Reviews
19. Reviewing Abilities of the Leaders: SBU head and the Scorecard manager
ensured in depth reviews. The culture of the SBU allowed employees to come up
with issues that needed attention.
137
20. BSC Software for Information Collation: BSC software would have been
beneficial, however, in the absence of it, the scorecard manager managed with the
help of excel files.
21. Time and Data Constraints: Facilitators were given sufficient time and data for
the Corporate Scorecard Reviews.
VII. Transfers
22. Integrating New Incumbents into BSC: Aviation SBU had three heads and
several managers and employees were transferred between the years 2007 to 2010.
To integrate the new incumbents in BSC implementation was a challenge.
23. Change in Leadership Approach to BSC: The change in leadership did not pose
much challenge as all three leaders supported BSC implementation.
4.3.5. Factors Driving Employee Buy-in for BSC
Some of the major factors impacting the employee buy-in for BSC were as under:
1. Boss’s Commitment: Employees’ decision to adopt BSC was primarily motivated
by the commitment and involvement of their bosses to implement BSC.
2. Facilitators’ Involvement, Support and Inspiration: As discussed earlier, the
first facilitator was held in high regard for her commitment and involvement. This
made acceptance and implementation easier.
3. Expected Benefits: When the results start showing up the motivation to continue
with BSC is sustained. If there are no visible benefits, interest and motivation die
out quickly.
4. Expected Objectivity in Appraisals of Employee Performance: Employees
perceived BSC as a tool that could ensure objective and fair assessment of their
performance and hence, appropriate performance ratings.
4.3.6. Outcomes of BSC Implementation at Aviation
a) Transitions in Working Environment and Employee Behaviours
BSC bound the entire Aviation team into one close unit and aligned them towards
achieving strategic objectives. Motivations were very high in the initial phases when
the business was growing. Leaders asserted that BSC enhanced their focus on strategy
138
and competency development both of self and their team members. Employees too
affirmed that shift in focus towards building strategic competencies. The process of
developing SLAs brought clarity about SBU accountabilities and the support that they
needed from each other.
In order to enhance the performance of the Aviation SBU, the team developed SLAs
with Quality Control (QC), Projects and Pipelines (P&P), and Refineries. These SLAs
included clauses wherein the accountabilities were clarified. The process of developing
SLAs was very sensitive and the discussions on the conflicting points were very
delicately handled by the facilitator. Eventually, as the SBUs agrees on specific
clauses, they started getting implemented in practice, though formal reviews of SLAs
were not systematically done. These SLAs were the major transitions observed.
b) Business Performance Outcomes
Looking back, the organisation takes pride in the outstanding achievements of the
Aviation business unit, some of which are summarised as below for the period up to
2010.
Table 4.11
Business Performance Outcomes of Aviation SBU (as of December, 2011)
SN Strategic Theme Strategic Outcomes Status
1 Enhancing Market Share The market share increased from 9.8% to 18%
2 Expansion of Aviation Service Facilities (ASF)
Number of ASFs increased from 9 to 31
3 Increase in Sales Volumes
Sales volume increased from 225 TMT to 744 TMT
4 Expansion of Customer Base
Customer Base increased from 5 to over 60 major airlines
5 Increase in Profits Profits increased from Rs. 49 Crores to Rs. 195 Crores.
Successful Partially Successful Not Successful
Source: Data collected and compiled from the information provided by the SBU Head of
Aviation, performance reports, presentations made to the top management team
and as published in ‘UPCL Foundation Day’ book.
S
S
S
S
S
S P N
139
The SBU head however, opined that it was difficult to isolate the impact of BSC alone
from other factors such as growing aviation market etc. on the business performance.
These enhancements in performance were results of strategic focus in a growing
market. Leaders and employees seized every opportunity and worked diligently
towards achieving strategic objectives. The overall culture of the team was carefully
nurtured by the SBU heads and the leaders so as to ensure that the team remains happy
and engaged.
This case also highlights that changes in the team profile due to transfers of leaders,
key employees and BSC facilitator, and the existent culture of the SBU has an impact
on the BSC implementation process. In the later years, though BSC appears to have
become a mere formality, the work culture of the SBU kept the employees engaged in
the pursuit of objectives given by senior management.
4.4. Summary
Study of the two cases in this chapter highlights the significant impact of leadership on
successful implementation of BSC. The leader of E&P SBU happened to be the first
leader of the Aviation SBU. In both cases, he built the SBU from the conception stage
to a reality. He was an agile leader committed to achieving strategic results and he had
uncanny ability of engaging employees in the strategic pursuit. When he moved out
from Aviation SBU in the year 2007, momentum of the strategic pursuit dampened. In
the E&P SBU that he established in the year 2007, the BSC was introduced under his
leadership with a focus on engaging employees to implement strategy. These cases
indicate how change of leadership impacts the momentum of implementation; and that
the leadership alone can be a defining factor in the success of BSC implementation.
The quintessence of the study of the top management perspective, and the case of E&P
and Aviation can be summarised in the following statement by one of the EDs:
To include the employees in, it is important to engage them. Give them an
idea of what they are expected to be doing and then monitor their
performance. Provide them resources and keep them engaged emotionally.
Encourage them when deserved and discipline when required.