Institutionalized Excellence

1. Institutionalized Excellence • Need • E.g. NTPC • Mission, Vision of Excellence, Core Values • Management Style • Policy Framework • Management Systems and Structures • Renewal Mechanisms

2. Institutionalized Excellence –NEED Competitive pressures and government dominance often threatens to politicize and bureaucratize the larger organizations especially those dependent on government for funds or owned by it. For such organizations changes of chief executives are frequent and top level management continuity is weak. So what can be done to prevent deterioration? The answer is Institution Building If the organization internalizes norms of excellent functioning, it may continue to function well despite weak competitive pressures and an adverse control environment.

3. Institutionalized Excellence - NTPC • National Thermal Power Corporation of India is a good example of how institutionalized excellence can be achieved. • It was set up in mid-seventies by the Government of India. • Between 1982 and 1990 NTPC increased its power generating capacity nearly ten times. • Throughout the eighties NTPC was profitable and its profits in 1989-90 were over 100 times its profits in 1982-83. • In comparison, most of the electricity boards owned by various state or provincial governments in India made losses during the eighties. • Most of the projects were commissioned as per schedule and within budgeted expenditures. • In the late eighties, NTPC had also ventured into the setting up of sophisticated gas-based power stations.

4. Institutionalized Excellence - NTPC NTPC was able to achieve an outstanding track record because it institutionalized a strongly result-oriented work culture. It had gone for the best technology. It had developed a strong in-house engineering capability. It recruited many young engineers on the basis of objective tests and put them through an intensive orientation programme. It had invested heavily in human resource development through training and job rotation. It had diversified the sources of its finance. It had institutionalized a vigorous quality assurance programme and competent project management. It had got installed a comprehensive management planning and control system. It practiced participative management. And despite its relative youth, it had undergone several reorganization studies.

5. Mission, Vision of Excellence, Core Values • In Third world conditions, institutionalization of excellence is easier if it is restricted to a few key performance indicators. • Hence, like competitive excellence, it is best to adopt one or few missions that are specific and local. • However to acquire a high social and internal standing for an organization it should internalize a wider set of core values. • Wider social concerns such as socio-economic development. • Wider human concerns such as for justice, nurturance, autonomy and self-actualization. • Similarly the vision of excellence needs to extend beyond critical performance indicators to one of excellent quality of functioning ( such as high professionalism or ethical or democratic functioning) for society and staff to develop a deep stake in the organization.

6. Management Style - The professional-altruistic-participative style can ensure the institutionalization of those values and norms that internally and externally earn the organization the status of an excellent institution. - Values such as systematic, expertise-based, planned decision making, ethical internal and external behavior, commitment to ideals, concern for human resources, and participative, reasonably democratic decision making. -

7. Policy Framework - policy of offering novel and/or high quality products/services, market orientation, team decision making, paternalism, human resource development emphasis, emphasis on persuasion rather than power in dealing with the staff, decentralization through a management by exception policy, and recruitment of innovative and young professionals constitute an effective policy framework for pursuing institutionalized, long-term excellence.

8. Management Systems and Structures -Institutionalized excellence is facilitated by comprehensive, sophisticated ‘professional management’ systems, complex differentiation and complex integration. Renewal Mechanisms -Institutionalization can go too far and institutionalized systems, practices, and norms can create a straitjacket for the organization. - Periodic reorganization studies can strengthen double loop learning, exnovation, survey feedback, SWOT, long range forecasting and scenario building are some of the mechanisms that can foster institutionalised excellence.