Akash krlshnaLry 118M60106 CuC1 paper submlsslon

akashkrlshnaLry[gmallcom 9364 441 106

Crgan|zat|on 1ransformat|on at Vo|tas

volLas narraLes a mega sLory of organlzaLlonal LransformaLlon LhaL has drlven boLh lLs value and
buslness growLh 1hlrLeen years ago volLas was on Lhe verge of shuLLlng down 1oday lL's a
company LhaL has conslsLenLly shown over 30 per cenL growLh year on year declared a 30 per cenL
boosL ln proflLs ln Lhe mldsL of a global lndusLrlal slowdown and shown Lhe hlghesL shareholder
reLurns ln Lhe 1aLa group over Lhe pasL 10 years volLas ls a company assoclaLed wlLh paLhbreaklng
pro[ecLs such as Lhe world's LallesL Lower 8ur[ khallfa aL uubal Lhe l1 Lrack and lerrarl World aL
Abu uhabl one of Lhe world's blggesL waLer LreaLmenL planLs aL Slngapore and Lhe new Sldra
Medlcal and 8esearch CenLre aL CaLar
1he quesLlon ls WhaL ls Lhe secreL of Lhls phenomenal success ln Lhe mldsL of Lhe lndusLrlal
recesslon cash crunches and credlL squeezes? 1he answer lles ln Lhe paLh of lnLernal organlzaLlonal
LransformaLlon LhaL volLas has chosen for lLself
1here are a couple of ma[or mllesLones ln Lhe volLas [ourney 1he f|rst was |n 1997 1he company
found lLself awash ln red wlLh losses of 8s168 mllllon a Lurnlng polnL LhaL led Lo Lhe company parlng
down nonperformlng buslnesses flaLLenlng hlerarchles slashlng employee rolls raLlonallslng real
esLaLe asseLs and successfully chaslng new buslness opporLunlLles
1he second m||estone came |n 200S when all Lhree maln dlvlslons alr condlLlonlng and
refrlgeraLlon unlLary coollng producLs and englneerlng producLs had sLablllsed ln facL Lurnover
had nearly Louched 8s14300 mllllon wlLh a proflL before Lax (81) level of 8s380 mllllon
Mega v|s|on
1hls was Lhe polnL when wlLh newfound opLlmlsm and confldence volLas formulaLed a brand new
vlslon Megavo| a buslness plan LhaL almed Lo achleve 8s100000 mllllon Lurnover wlLh 10 per
cenL proflLablllLy by 201011ManagemenL aL volLas planned Lo go for boLh organlc and lnorganlc
growLh Managlng dlrecLor Ashok Sonl Lhe man who Look over Lhe wheel ln 2001 has sLeered Lhe
organlsaLlon Lo lLs presenL course 1he Megavol plan has broughL abouL several dramaLlc changes ln
volLas and Lhese have malnly been Lhe reason for boLh volLas's growLh spurL and lLs relaLlve
lnsulaLlon from Lhe recesslon whlch has done llLLle more Lhan slow down Lhe pace of LargeLed
growLh
1he mosL vlslble one has been Lhe change ln Lhe naLure of Lhe company's buslness model ln lndla lL
has graduaLed from a company LhaL execuLed only heaLlng venLllaLlon and alr condlLlonlng pro[ecLs
for lLs cllenLs lnLo an lnLegraLed soluLlons provlder for mechanlcal elecLrlcal and publlc healLh
englneerlng (ML) pro[ecLs and lndusLrlal and lnfrasLrucLural elecLromechanlcal pro[ecLs Cverseas
lL has grown lnLo a preferred conLracLor ln ML pro[ecLs and a serlous conLender for pro[ecLs of Lhe
hlghesL scope value vlslblllLy and complexlLy 1oday as much as 63 per cenL of Lhe company's
revenues come from execuLlon of ML pro[ecLs ln lndla and overseas ln facL global buslness
accounLs for nearly 40 per cenL of Lhe company's Lurnover
1he company's hlghproflle overseas pro[ecLs have played a huge role ln bulldlng lLs repuLaLlon
credlblllLy and sLablllLy volLas had bullL up a very healLhy order book poslLlon whlch has helped lL
Llde over Lhe recesslon wlLh mlnlmum lmpacL Megavol changed noL [usL Lhe scope of operaLlons aL
volLas lL also boosLed Lhe scale of operaLlons Lhe company has gone from execuLlng pro[ecLs worLh
8s200300 mllllon Lo a level where a slnge pro[ecL can brlng ln as much as 8s8000 mllllon ln
revenues 1he 8ur[ khallfa ML buslness for lnsLance was worLh 8s13000 mllllon and was execuLed
ln a [olnL venLure wlLh Lwo oLher conLracLors
uubal's forLunes have Laken a beaLlng ln Lhe pasL couple of monLhs buL volLas has already wldened
lLs focus Lo new geographles execuLlng pro[ecLs ln CaLar and 8ahraln whlle explorlng opporLunlLles
ln Cman kuwalL and Saudl Arabla 1he Sldra Medlcal CenLre ML pro[ecL for example ls worLh
8s10000 mllllon
-ew capab|||t|es and resources
1o manage Lhe new growLh Lhe company bullL and developed several new compeLencles especlally
ln Lhe area of conLracL managemenL rlsk managemenL Lechnlcal audlLs lnvenLory managemenL and
people managemenL
1he company has seL up a Clobal Lnglneerlng CenLre ln Mumbal as a slngle polnL deslgn cenLre for all
lLs ML pro[ecLs 1here ls also a cenLrallsed procuremenL cenLre Lo aggregaLe requlremenLs and
negoLlaLe beLLer raLes from suppllers Lven Lhe processes for managlng people have had Lo become
more efflclenL Lhere are cenLrallsed Lralnlng cenLres whlch yleld a good crop of Lechnlcal LalenL AL
one polnL ln Llme volLas was able Lo comforLably moblllse 6000 workmen for lLs pro[ecLs ln Lhe
Mlddle LasL ln facL Lhe company has grown exponenLlally ln lLs ablllLy Lo manage workforces of
varled naLlonallLles culLures and languages
1he lmpacL of Megavol on Lhe volLas balance sheeL ls clearly vlslble ln 200809 Lhe Lurnover had
crossed 8s40000 mllllon wlLh 81 aL 8s3670 mllllon (a flvefold growLh ln boLLom llne wlLhln four
years)
1here ls also an lnLanglble change LhaL accordlng Lo Mr Sonl has been [usL as slgnlflcanL ln Lhe
volLas growLh sLory and LhaL has been Lhe poslLlve lmpacL of Lhe new vlslon on Lhe mlndseL of
volLas personnel lL's very lmporLanL Lo leave behlnd Lhe legacy of Lhe pasL Megavol ls asplraLlonal
and people respond very well" All volLaslLes aL all levels share and parLlclpaLe ln Lhe company's
growLh plans and progress lL's parL of a companywlde culLure of engagemenL performance
Lransparency Leamwork and Lwoway communlcaLlon

eak product|v|ty
WlLh growLh and proflLablllLy ln mlnd volLas has Laken several sLeps Lo lmprove efflclencles and
producLlvlLy 1he company has lnLroduced performancellnked salarles cuL down on wasLeful
processes lnLroduced onllne aucLlons for procuremenL lmproved worklng caplLal managemenL
lncreased earnlngs from asseLs and lmproved dellvery Llmes Lo cusLomers

volLas has Lransformed lnLo a flaLLer leaner organlsaLlon lL has been benchmarklng lL's processes
cuLLlng cosLs where lL can and Lrylng Lo keep people cosLs low WlLh organlzaLlonal LransformaLlon
Lhe company ls Lrylng Lo sweaL Lhe asseLs have reduced ouLsLandlngs and ask for cash dlscounLs
from vendors by baslcally leveraglng lLs llquldlLy as much as posslble
AL Lhe end of Lhe day all savlngs conLrlbuLe Lo Lhe proflLablllLy of Lhe company Mr Sonl a flnance
man Lo Lhe core puLs lL succlncLly 1he Lop llne ls vanlLy boLLom llne ls sanlLy buL cash flow ls Lhe
reallLy!"
1hls Lhlnklng has Laken volLas a long way Cne reason why Lhe unlLary coollng producLs dlvlslon
conLrlbuLes as much as 1819 per cenL Lo Lhe boLLom llne ls LhaL lL has moved lnLo an asseLllghL low
caplLal cosL buslness model based on ouLsourclng alr condlLloners or Lhelr componenLs from Chlna
for assembly ln lndla 1he ML dlvlslon's buslness model ls dlfferenL here lL ls Lhe cenLral deslgn and
procuremenL cenLres LhaL are expecLed Lo generaLe slgnlflcanL cosL savlngs

ea||s|ng Megavo|
WlLh Lhe Megavol deadllne of 201011 loomlng [usL one flnanclal year away volLas ls Lhlnklng of
fuLure plans volLas planned for 70 per cenL of Lhe Megavol LargeL Lo come from organlc growLh and
Lhe balance from lnorganlc growLh AcqulslLlons are golng Lo play a blg parL ln Lhe fuLure of Lhe
company 1he ML dlvlslon ls looklng aL new verLlcals Lo drlve buslness hosplLals waLer power
and lndusLrlal lnfrasLrucLure volLas ls on Lhe hunL for companles wlLh capablllLles ln Lhese areas
Cne such recenL acqulslLlon has been 8ohlnl lndusLrlal LlecLrlcals a company wlLh a presence ln
lndusLrlal ML work more such buyouLs are expecLed 1he company ls also looklng aL green
buslness opporLunlLles such as ML pro[ecLs speclflcally for bulldlngs seeklng LLLu (leadershlp ln
energy and englneerlng deslgn) cerLlflcaLlon whlch have a smaller energy and carbon fooLprlnL A
recenL noLable success ln Lhls fleld ls Pyderabad's new 8a[lv Candhl lnLernaLlonal AlrporL Asla's flrsL
LLLucerLlfled alrporL
1he volLas sLory makes lL clear LhaL Lhe Megavol vlslon has been a key facLor ln Lhe LransformaLlon
of Lhe sLrucLure and culLure of Lhe company Such well LhoughL and opLlmally lmplemenLed
organlzaLlonal LransformaLlons form Lhe basls of success for any company