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Chapter 14

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Chapter 14

Category13: Achieving Sustainable and Superior Organizational Results:

14.1 Results on Retail Market Share

If strategy is defined as the patterns of choices made to achieve a sustainable competitive

advantage, then strategic leadership involves focusing on the choices that enhance the health

and well-being of an organization over the long term (Betty & Quinn, 2010).

The above quote is telling in its impact. Vision is important for results and co-created vision

generates choices that arise from people.

Achievement Orientation in people have a desire to achieve and set challenging goals. Market

Share increase especially for a large oil company is always difficult to achieve. Market share

increase indicates we are growing over others. In a growing market everybody may grow but

to increase market share is beating the competition by growing over others.

From the financial year 1998-1999 HPCL market share in Retail MS (Petrol) was slipping

and recorded a downfall in every year for the period1998-1999 to 2003-2004. In 2003-2004

Project Achieving Continuous Excellence ( ACE) commenced the intervention of co-created

vision along with other interventions like Balanced Scorecard, Competency mapping and

Competency Development as well as infrastructure building like network expansion,

modernization of outlets and capacity augmentation in our other facilities. As seen in the

earlier chapter people set and delivered on challenging goals.

Private players like Reliance and Essar operated only for a few years in the Retail Market and

thereafter either withdrew or had literally no presence. Even Shell has no significant market

share. Therefore, the market is divided between the three oil majors i.e. IOCL, HPCL and

BPCL.

Improved market share which was a dominant theme in the vision as people talked repeatedly

of higher sales growth than the competitors. This was a challenging and difficult goal

especially on a sustainable basis, given our track record of negative growth in market share

consistently over a period of fifteen years consecutively. Researcher requested Deputy

General Manager Highway Retail Mr. T Sundaraman who has spent almost three decades in

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HPCL Retail SBU to send researcher the market shares for analysis. He sent the market

shared for a period of 25 years comparative data.

His mail reads as under:

‘Last 25yrs MS/HSD performance after 2003 we have gained market share 9 consecutive

years for MS consecutively and 7 out of 9 in HSD’.

Figure 14.1

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14.1(a) Gasoline or Motor Spirit (Petrol) Market Share Improvement:

The table with the details is as under:

MS- Retail

Market-Share among Oil Marketing PSU Majors (In Percentage)

Year HPC BPC IOC IBP AOD IND.INC/DEC

HPC

1988-89 28.96 31.66 31.20 6.31 1.87 100

1989-90 28.39 31.30 31.91 6.53 1.87 100 -0.57

1990-91 28.10 30.99 32.52 6.69 1.70 100 -0.29

1991-92 27.99 30.78 32.64 7.00 1.59 100 -0.11

1992-93 27.86 30.43 32.83 7.32 1.55 100 -0.13

1993-94 27.53 30.78 32.53 7.75 1.42 100 -0.33

1994-95 27.00 31.14 32.71 7.74 1.40 100 -0.52

1995-96 27.05 30.93 32.95 7.71 1.36 100 0.05

1996-97 26.63 31.07 33.27 7.76 1.27 100 -0.42

1997-98 26.75 30.96 33.27 7.90 1.12 100 0.11

1998-99 26.23 31.37 33.37 7.93 1.10 100 -0.52

1999-00 25.90 31.68 33.33 8.00 1.09 100 -0.33

2000-01 25.51 31.81 33.83 7.78 1.07 100 -0.39

2001-02 25.29 31.69 34.37 7.58 1.06 100 -0.22

2002-03 26.16 32.05 34.21 7.45 1.14 100 -0.14

2003-04 25.03 31.59 34.02 8.24 1.11 100 -0.12

2004-05 25.22 30.43 35.44 8.91 0.00 100 0.19

2005-06 25.32 30.29 35.44 8.91 0.00 100 0.09

2006-07 25.35 30.22 44.28 0.00 0.00 100 0.03

2007-08 25.56 29.72 44.40 0.00 100 0.21

2008-09 25.68 29.09 44.88 0.00 100 0.13

2009-10 25.78 28.51 45.32 100 0.09

2010-11 26.1 28.28 45.28 100 0.33

2011-12 26.45 28.28 44.98 100 0.35

2012-13 26.47 28.81 44.64 100 0.02

Table 14.1: Market-Share -Oil Marketing PSU Majors in Motor Spirit (M S or Petrol)

Legends

HPC stands for Hindustan Petroleum Corporation Limited

BPC stands for Bharat Petroleum Corporation Limited

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IOC Stands of Indian Oil Corporation Limited

IBP stands for Indo Burma Petroleum Company

AOD stands for Assam Oil Division Limited

From 2004-2005 till 2012-2013 HPCL in the Govt. Oil Marketing Companies (IOCL, HPCL

and BPCL) continually registered increase in market share which has never been achieved by

any company after deregulation or dismantling of APM.

14.2 Market Share in HSD (Diesel)

Market-Share in HSD

Year HPC BPC IOC IBP AOD IND.INC(+)/DEC(-)

HPC

1988-89 24.27 25.71 38.83 9.62 1.46 100

1989-90 24.21 25.52 39.01 9.76 1.49 100 -0.16

1990-91 24.15 25.15 39.4 9.76 1.54 100 -0.06

1991-92 24.12 24.98 39.49 10.00 1.41 100 -0.03

1992-93 23.94 25.16 39.54 10.03 1.33 100 -0.19

1993-94 23.80 25.76 39.19 9.98 1.28 100 -0.14

1994-95 23.41 26.09 39.61 9.66 1.23 100 -0.39

1995-96 23.72 26.22 39.56 9.39 1.12 100 0.31

1996-97 23.45 26.42 39.63 9.43 1.07 100 -0.27

1997-98 23.92 26.46 39.31 9.38 0.93 100 0.47

1998-99 23.70 26.73 39.29 9.30 0.98 100 -0.22

1999-00 23.53 26.62 39.35 9.53 0.97 100 -0.17

2000-01 23.48 27.25 38.96 9.30 1.01 100 -0.05

2001-02 23.64 27.05 39.00 9.20 1.11 100 0.16

2002-03 23.52 27.58 38.72 9.02 1.16 100 -0.12

2003-04 23.00 27.89 37.97 9.93 1.22 100 -0.53

2004-05 23.20 27.00 39.06 10.74 0.00 100 0.20

2005-06 23.36 26.82 39.08 10.61 0.00 100 0.16

2006-07 22.95 27.74 49.02 0.00 0.00 100 -0.41

2007-08 23.30 27.86 48.43 0.00 100 0.35

2008-09 23.61 27.52 48.47 0.00 100 0.32

2009-10 23.57 27.00 48.97 100 -0.4

2010-11 24.05 27.44 48.15 100 0.47

2011-12 24.68 27.76 47.28 100 0.63

2012-13 24.85 28.55 46.53 100 0.17

Table 14.2: Market Share in HSDLegends

HPC stands for Hindustan Petroleum Corporation Limited

BPC stands for Bharat Petroleum Corporation Limited

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IOC Stands of Indian Oil Corporation Limited

IBP stands for Indo Burma Petroleum Company

AOD stands for Assam Oil Division Limited

From the year 1988-89 to 2003-04 in a span of 15 years of comparison we had lost market

share in 14 years and gained only one year. From 2004-05 to 2012-13 we gained market

share in 7 out of the 9 years.

This is again indicative of sustainable market share gain over a period of 9 years after the

ACE process of co-creating vision, working with the balanced scorecard, building strategic

infrastructure, improving processes and customer centricity.

Profitability is the other hard number in results. Profits in Retail Business for Oil Marketing

companies have been impacted by government decisionsrepeatedly. Pricing of retail products

(Petrol and Diesel) is not under APM but the government has often intervened in public

interest. These interventions have led to large subsidies which have cost the oil marketing

companies. No meaningful co-relation of profits to market share enhancements can be

patterned. The issue of burden on oil companies has been well researched and well

documented and has also been often in the news. Two researches are referenced here (Misra,

Chawla, Shrivastava, & Pachauri, 2005) and the study ‘The Citizens Guide to Energy

Subsidies in India’ (IISD, 2012).

The Physical results in HPCL Retail in terms of the vision aspirations ‘increase in market

share’, ‘Highest Sales growth in Industry’ have been truly been vindicated in MS (Petrol)

market share and considerably in HSD (Diesel).

14.3 Results in Employee Productivity, Customer Service, Organizational Learning and

other areas.

But results are not only in Hard Metrics but also in the form of processes, customer

recognition and learning and growth. Soft metrics are also measured by recognitions which

form valid feedback and are counted as results. Records from Company Archives are shown

in the next pages.

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Figure 14.2 (Employee Productivity Increase)

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Best Forecourt Service by Dealer-men and training of 46500 people by HR on ‘Sada Apke Liye’ (Always for the customer)

Figure 14.3

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4

HPCL Process Improvement Results

Figure -14.4 (Improving Productivity at our Supply Locations)

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Figure 14.5 (Projects taken up by HR for training LPG dealers and delivery men of gas cylinders for better customer experience)

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Figure 14.6(Improving Productivity of about 32% by Participative management in Gas (LPG) filling of cylinders)

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Significant process improvements have resulted by important people and system initiatives which have resulted in tank truck utilization

productivity, LPG (cooking gas) bottling productivity, improve LPG Dealers capability and training LPG Delivery men for better customer

service.

Table 14.3 (Some of the Important Awards and Recognitions received in the recent Past 2011-12-13)

Sr.No. Name of Award Awarded By In Recognition of Awarded on Received By Handed over By

1Readers Digest Trusted Brand AwardWon the award for 7th Year in a row

Readers Digest Brand Recognition 2013 Mr M S Damle ED Retail Readers Digest

2 BML Munjal Award Hero Corp GroupFor Excellence in CapabilityBuilding

2013Shri Roy ChoudhuryC&MD

His Excellency Minister ofHRD Shri Shashi Tharoor

3National Award for "SignificantAchievements in EmployeeRelations"

Employee Federationof India [EFI]

For excellence in IndustrialRelations thru' commitment &focused strategies

Oct.2011Shri Sandeep Joseph, GM- IR

Shri J.J. Irani, Ex-Director,Tata Sons Ltd.

4Golden Peacock Award for CSR for2012

GPNTA Training Feb 2013Shri Pushp Johsi DirectorHR and Shri Ashis SenDGM Capability Bldg.

Ex - Chief Justice of India

5GOLD Trophy Meritorious Awardfor CSR & Responsiveness for theyear 2009-10

SCOPE

Best Corporate SocialResponsibility andResponsiveness during 2009-10

Apr.2011

Shri S. Roy Choudhury,C&MD & Dr. V.Viziasaradhi, Director -HR

Her Excellency - President ofIndia, Smt. Pratibha DevisinghPatil

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5 Excellence in Quality Award M/s. BOSCH"For supplies of Lubricants fortheir aftermarket sales"

Aug-11Shri Baldev Bhatia, Ch.Installation Manager -Mazagaon Terminal

Shri S. Muralidharan VP -Bosch

6 Bhima Shah AwardMP Govt. -Commercial Tax Dept

For Largest VAT TaxPayment in the State of MP

Jul. 2011Shri Kamal KumarChakravorty, Sr. Manager- Tax [wz]

Hon. Finance Minister - MPShri Raghavji Bhai

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"Distinguished Fellow of Institute ofDirectors" * Golden PeacockExcellence Award for 2011" for BestHR practices

Institute of DirectorsFor significant contribution tobusiness and society

Aug. 2011Shri S. Roy Choudhury,C&MD

Shri P.N. Bhagwati - FormerChief Jutice - Govt. of India

8CIO 100 Award for the 5thConsecutive Year

IDG INDIA For B2B Integration Sept. 2011Shri S.T.Sathiawageeswaran - ED _IS

9INDIRA GANDHI RAJBHASHAPURASKAR for the year 2009-10 inPSU Category

Govt. of India - HomeMinisitry

Best usage of Hindi Sept.2011Shri S. Roy Choudhury,C&MD

Her Excellency - President ofIndia, Smt. Pratibha DevisinghPatil & Hon'ble Minister -Home, Shri P. Chidambaram

10NIPM - Runners up Award for BestPractices 2011

NIPM For Best Practices in HR Dec.2011Dr. v. Viziasaradhi,Director-HR

Shri Anil S. Khandelwal,Former C&MD - Bank ofBaroda

11Brand Leadership Award 2011 inService/Hospitality Industry

World BrandCongress 2011

For Brand Leadership Dec.2011Ms. Nishi Vasudeva,Director - Mktg.

Dr. Alok Bhardwaj, Chairman: World Brand Congress 2011

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12Top-25 Outstanding MarketingLeaders Award 2011

World BrandCongress 2011

For outstanding marketingleadership

Dec.2011Ms. Nishi Vasudeva,Director - Mktg.

Dr. Alok Bhardwaj, Chairman: World Brand Congress 2011

13Brand Builder of the year Award2011

World BrandCongress 2011

For Brand Leadership Dec.2011Shri M.S. Damle, ED-Retail

Dr. Alok Bhardwaj, Chairman: World Brand Congress 2011

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CSR Award 2011 for :1] Support & Improvement inquality Education2] Concern for Health3] Community Development4] Best Environment Excellence

Subir Raha Centre forCorporateGovernance

For Corporate SocialResponsibility

Dec.2011Shri Alla Surya Rao, DGM- CSR

Dr. Saagarika Ghoshal, ChiefPeople Officer, Reliance BigEntertainment Pvt.Ltd.

15Forecourt Retailer of the Year Award2011

Star Retailer AwardsFor designing businessstrategies to maximise thepotential in forecourts

Dec.2011

Shri Anil Khurana, GM -Retail, NZ and Shri V.K.Yadav, CRM - DelhiRetail RO

Prof. P.K. Mishra, Director -Institute of Public Enterprises

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14.4 Discussion on Results

HPCL in the learning and growth segment has been in the forefront bagging many awards

and recognitions. Articles on Hindustan Petroleum have been published in many top journals

including a case study in Harvard Business School on communication (Groysberg & Slind,

2011).

Organizational results as can be seen from the above has been recorded in Sales Growth of

Retail, Process Improvements, aspiration levels of people, HR Recognitions, Publications

which include Harvard case study on internal communication, ushered in the Hall of Fame by

Palladium on Balanced scorecard and strategy execution.

Results for sustainable results need to include physical parameters like growth in market

share but also must include measurements in process improvements, innovation, HR

practices. This chapter is integrates physical results, process results and people results.

The results of the process are an important category in theory building arising out of the

process which commenced with co-created visions. Results by themselves do not add to

existing theory but form the part of a theory where the processes in the earlier categories lead

to outstanding results.