Wednesday, September 13, 2017

How One Honest and Efficient Officer Can Turn Around a Government Organisation

This is the story of how one person changed the fortunes of an inefficient and corrupt government department - The Civil Supplies Corporation. Given charge of being Commissioner Civil Supplies Department of Telangana, after  a fine performance as Commissioner Cyberabad, C.V. Anand, IPS, got a post normally given to IAS officers. But the government was keen and felt he was the right person to do the job. After a short span of an year, he won the Award for Excellence from the government having brought in several measures that saved .Rs. 1206 directly and several more indirectly
Image result for C V Anand
When he took over the CSC, the fact sheet read like this - Large outstanding of material (paddy - rice), Outstanding dues (loans and moneys owed to the corporation), loss due to leakages (transport, procurement, gunny bags), millers domination, , low employee morale, corruption (FPS shops), financial mismanagement, the cash credit was stopped by the bank, subsidy from Central Government was stopped due to excess of 25% levy (unexplained), a 3288 crore deficit due to non-sanction from the state government (due to non-persuasion by the department). The corporations P&L looked abysmal. The end consumer and the farmer suffered (how, any details). Tax payers money was going down the drain and in many cases was being used by unscrupulous elements in collusion with officials. In short, the Rs. 10000 crore corporation was a royal mess.

To handle such inefficiency and corruption at such a large scale the officer needed the support of the government and he got it amply.

1. Set the agenda and send a clear message
C.V. Anand had to send a clear message that the department meant business. He needed to get the right team on the bus (Good to Great- Jim Collins) which he did and got the wrong people off the bus and sent them to the field. He led from the front, set clear goals, roles, evolved Standard Operating Procedures (SoPs),  recognised and rewarded those who did a good job and kept the team motivated. Promotions were given, recruitments done, transfers were made transparent, long standing deputations cancelled, political interference reduced in transfers The message was clear - perform or perish and he would spare no one.

His team now in place, he needed to attack the mischief makers. Other stakeholders included Rice Millers, Kerosene Dealers, Fair Price Shop Dealers, Transporters other than the Farmers and the End Consumers.

2. Changing the currency
To understand the way the Corporation works better, he changed the basic unit from MTs to Rupees. The message - the Corporation had to be run like a company. What was previously discussed in MTs now became Rupees and that helped bring focus to the medium of exchange and even the way performance could be measured..A column "in Rs. Crore' was added to every single report to see the financial implication of every decision and action.

3. Dealing with the Rice Millers
He sent a clear message to the Millers (o/s of 651 cr) - who get advances worth crores of rupees from the department to process the paddy and deliver rice within two months. The average outstanding which should not exceed two months was in many cases running into years - some were taking the paddy and directly exporting them as their own and paying the corporation as and when they wished. This non-supervision and non-recovery of rice due from millers on time caused a huge loss - when he took charge it was 1.85 lakh MTs outstanding translating to Rs. 482 crore which was not being recovered.
Some millers were returning substandard rice to the government having substituted the original paddy with low quality rice.

Gunny Sacks
Gunny sacks that were given to millers with paddy were not being returned ((175 cr). It was estimated that 5 crore gunny bags were not returned which were worth about Rs. 66 crores. Transport of bags by road instead of rail bought down the cost by 6 crore.  Prices were not negotiated with millers (62 cr).

All millers were asked to pay all dues within two months and any one who defaulted was blacklisted. Four repeat offenders were arrested under preventive detention. Gunny bags sent to millers were recovered which earlier were recovered. Clear standard operating procedures were given to be followed to stop leakage and loss. This included measures like checking the electricity meter for average consumption, giving color coded bags for packaging etc. Also allotment of paddy etc was done on the basis of capacity and not on some whims and fancies.

4. Use of Technology to Monitor and Enforce
The department and the millers in place, it was time to monitor intelligence to help enforcement through use of technology. The department got GPS systems installed on the 1383 trucks with a geo fencing feature where any deviation in route (total route length 18000 kms) is alerted by sms to the top officials - Commissioner, Collector and CSO. CCTVs were put in place at mandal level centres, godowns to ensure no pilferage is done. To watch all this in real time, a command and control room with an 18 and 8 feet screen was set up which monitors transportation, CCTVs live. A team watched the operations 24/7. Thus technology was used to increase surveillance, obtain first hand and real time information on where the material was and in what shape. An Online Payment Management System (OPMS) was used to pay Rs. 8100 crores to 11 lakh farmers at one go.

5. Use of Technology to Bind Team and Motivate and Appreciate
To enforce the agenda strictly, the entire team of Officers in districts were bought together on real time through 15 Whatsapp groups. Officials used this app to report status on ground. All good work done by the CSOs was recognised and appreciated by name instantly by the Commissioner (Ken Blanchard - One Minute Manager, Whale Done). Awards were given and certificates and promotions recommended (Ken Blanchard - Gung Ho). This simple but little-used technique increased the morale of the officers on the field. Needless to say, it is a practice that consumes much time and speaks of how devoted the officer was and how he invested time in the people and backed them fully. The Millers were taken into confidence and were asked ways to cut down leakage and pilferage.

6. Outsourced Teams to Help in IT, Enforcement, Technology, Finance
To bolster the efforts of his team, an IT team, an accounts team, an enforcement team and a technology team (quality) on an outsourced basis. The outsourced teams, some comprising of retired officers and others who were qualified,  were given clear instructions to conduct raids, check and report malpractices and give no leeway for offenders. Enforcement officers in outsourced teams were handpicked after personal interviews.

7. Financial Management and New Online Payment System
The department had not claimed dues, had not recovered material and on top of it, had paid an interest of Rs. 2100 crores. No proper audit had been done since 2011. This was addressed by the finance team. The accounts were audited after many years. Outstanding loans of Rs. 3500 crore were paid out of an amount of Rs. 6000 crores. An online payment system was developed which was used to deposit a sum of Rs. 8100 crores directly into the bank accounts of 11 lakh farmers.

8. FPS Shops and EPoS Machines
EPoS machines were installed in 1400 FPS shops on a pilot basis which reduced loss by 140 crore. Now machines are being installed in 7000 FPS shops. This will reduce any mischief at the FSP shops. Also, FPS shops never showed any closing balance. They have now been asked to show a closing balance of 15%. Quality of rice is being ensured and to prevent any mischief, the colour of the sacks containing rice for hostels and schools had been changed.

9. Launch of T Ration App
On September 8, 2017 the Department launched the T Ration app which is a boon for the beneficiaries of the ration cards or the PDS system. One can download the app on their smart phone and can access details of ration shops, stocks, live activity, quotas, commodities availability, status of applications, loading and unloading details. Consumers can approach any ration shop. All shops were geo-tagged and CCTVs installed in godowns. It cannot get more transparent than that. The T Ration App also has 13 apps for the officers to access and discharge their duties from anywhere - stock, live sales, receipt, seeding status etc can be accessed at the touch of a button. What was a nebulous business earlier has now become a transparent process which benefits both the corporation, the consumers and the dealers.

Savings and Recoveries After the Above Measures
The savings and recoveries in just one year of operations are estimated as follows - recovery of Custom Milled Rice dues (Rs. 715 cr), Gunny bag dues (Rs. 175 cr), Savings through negotiation with millers (Rs. 62 cr), Savings through transportation (Rs. 71 crore), Recovery of long pending dues from GoI Rs. 1946 cr), EPOS savings (Rs.260 cr), Savings through other measures (Rs. 270 cr). Of a total savings/recoveries estimated of Rs. 4208 cr, the department has in one yer saved Rs. 1270 cr. The balance Rs. 2938 crore is likely to be recovered/saved soon.

The direct beneficiaries are clearly the end consumers - people who buy in FPS shops, the hostel and school meals and the farmers from whom the paddy was being procured. They were getting delayed, sub-standard material and artificial shortfalls were created which benefited the millers, transporters, officials, godowns, FPS owners who made merry at the tax payers expense. Now with the system in place and losses brought down by 1200 crores in one year, the Civil Supplies Department is on the way to a full recovery.

Systems In Place, Hard Work Done - Benefits of a Level 5 Leader
The biggest takeaway from this massive exercise is a great lesson in leadership and how it can cause such a huge impact in one year. To convert an complex Corporation like the CSC into a transparent one through use of technology and other monitoring measures is no joke. In fact it is exactly what Jim Collins talks about in his book 'Good to Great' (a book I recommended and he immediately ordered it). The first prerequisite to transform a corporation from good to great is ) Level 5 leadership 2) getting the right people on the bus and the wrong people off 3) confronting brutal facts while being clear of the final vision 4) a culture of discipline 5) clarity of the hedgehog concept and 6)technology accelerators. Almost all in place or in process and it is only one year into operation but the results are more than 10x. Fantastic.

It is no secret that the reforms will work for a while to come. The hard work has been done and needs to be sustained. Many of the reforms in IT, Enforcement, Finance and Technology can be taken forward (or can be withdrawn) based on the vision or the whims and fancies of the next official.

But what is heartening is to know that so much can be done with one person who wants to do good and who is driven by a purpose. CV's belief has always been this - "Government is a Trust, and the officers of the government are trustees. And both the trust and trustees are created for the benefit of the people.' CV clearly is a Level 5 leader - the kind who can transform organisations from Good to Great.

How one Level 5 leader can change the efficiency of an organisation, that too a government organisation, is a case study for all to look at - private sector or government. In fact two leaders of large private corporations that I met recently and shared this story with asked if they could meet him and find out how he did it - I guess he should make a presentation on how he did it and release it as a case to study and follow.

His man management techniques are brilliant - lead from the front, use the window and mirror approach i.e. give credit to team and take all blame (Jim Collins), using appreciation and positive strokes instantly (Ken Blanchard), driven by purpose i.e. the cause (Simon Sinek) are all in place. If Google's 'way to build a perfect team' is considered - the impact they made, the meaning they have in the employees life, the structure (goal and role clarity), dependability and psychological safety are areas that need to be examined. An atmosphere of fairness and justice has been established and the team trusts him now as someone who will watch their back. His reputation precedes him and for him that bodes well.

'We can do wonders if we do an honest job,' he says. The evidence is clear as day light. Then we wonder - what are all the others doing. CV also gives full credit for the backing he got from the government and the CM in implementing the changes and measures that he did. If the Government wants to, it certainly can, because there are enough officers like CV who can do a wonderful job. CV has always made a difference to whatever job he has been entrusted - mounted police at the Tank Bund, drunken driving and traffic enforcement, Cyberabad and the snake gang and now this. His room is full of awards and pictures with the President Dr. Abdul Kalam and others. Well done CV and hoping you will be entrusted with more such challenging assignments that will help society.  And I hope you will inspire more and more people in all walks of life to make a difference as you did and continue to do.

1 comment:

naveen said...

Proud and delighted to see the positive impact CV has achieved in his new role with the Govt.

Wish him continued success!