The validity of this proposition is apparent from the success of Maruti Suzuki. When this company was established in 1981, it faced what were considered by all to be insurmountable obstacles. Achieving the target of manufacturing and selling one lakh cars a year appeared to be a dream then. The environment for manufacturing was no different for Maruti as compared to other public or private companies.

The management decided that without learning from the Japanese and developing a different management system and practices from those prevailing in the industry, it would not be possible to perform at a higher level. Without producing cars of better quality and at a lower cost, Maruti would be unable to dispel the popular belief about the company failing. This different management system had to be developed within the law, regulations and constraints applicable to public sector companies. The government had no role to play in the company making this decision or implementing it.

As a result of becoming different in many ways, Maruti could meet all its targets from the very beginning and has now crossed annual sales of 20 lakh cars. These cars are being exported all over the world. All the growth has been financed from internal resources. The company has about ₹50,000 crore of cash reserves. It has created huge wealth for its shareholders, millions of jobs and promoted a globally competitive and large component manufacturing industry. There is far greater equality between workers and management.

The different practices that Maruti adopted included changes in recruitment, training and motivation of its human resources; following very strict ethical standards and not having any cash transactions; adopting practices that were strongly customer-centric; following frugal management practices so as to maximise internal resources; having a flat management structure and trusting young employees.

The biggest difference, and the most valuable, was changing the worker-management relations. Multiple politically affiliated unions with no worker involvement existed, which led to an impact on the growth and competitiveness of their company and frequent confrontations with management. This led to low productivity and quality. Manufacturing exports were limited and foreign investments in manufacturing have remained small. Nobody thought, let alone believed, that workers by virtue of their experience on the shop floor gained knowledge and skills that no engineer working in supervisory or managerial positions could ever acquire.

If the management could motivate workers and train them to identify and analyse shop floor problems, their knowledge and experience could result in suggestions for small but significant improvements in all aspects of manufacturing activity. The process of continuous improvements in quality, productivity and cost reduction would, over time, make the company more competitive than others. Japanese industry had attained global excellence largely because they brought this additional resource to make manufacturing the most competitive. Maruti could replicate that here.

In my book, Impossible to Possible, I explain how Maruti used a combination of specific policies and practices to build trust between workers and management. Constant communication was the key to success. Executives and engineers also had to be educated to understand the benefits arising from respecting and trusting workers and using them to improve manufacturing practices.

The development of the component industry required us to introduce the concept of a relationship of mutual interdependence and partnership with vendors. Despite being a public sector undertaking, we had to help vendors in various ways, on the premise that more efficient vendors would benefit us. The contribution that this industry is making to national growth is evidence of the effectiveness of Maruti’s policies in this area.

The cooperation between workers and management helped in creating a more equitable company and led to India becoming the third-largest car market in the world. Many workers in Maruti became house owners when they were below 30 years of age: The percentage of workers owning houses is probably the highest in the country. Their children get the benefit of education at a Delhi Public School, located in one of the housing colonies owned by workers. Most workers are income payers and 80% of them own cars. The ratio of their earnings and that of management is perhaps the lowest in the country.

Impossible to Possible is not intended to publicise the achievements of Maruti. The primary purpose is to start a debate on the need for companies to change their management practices so that our manufacturing competitiveness can increase, leading to faster growth and more employment.

The debate should lead to a recognition of the immense potential for growth that lies unutilised because workers are not motivated, trained or thought capable of contributing to the betterment of companies. Managements have to create conditions for that to happen. By doing so, promoters will create a win-win situation not only for themselves and the workers but also help substantially in the growth of the nation.

Building trust with workers and unions is essential and can be done both by actions and communication. The experience of Maruti shows that manufacturing in India can in terms of quality, productivity and cost be as competitive as anywhere in the world. Promoters and management of companies have to show their leadership qualities and help create the India we all want.

RC Bhargava is the former CEO and current chairman of Maruti Suzuki. Impossible to Possible, his latest book, will be released later this month. The views expressed are personal