Change Leader

Much research on leadership and organizations point out that organizations are operating
in an increasingly complex and dynamic environment. This challenge is often cited as a reason
for organizations to undergo transformation so that they can continue to stay relevant in the face
of a potential crisis or an actual crisis that has already taken place. Increasingly, transformations
are being perceived to be a critical driver of organizational success as well as an essential factor
in creating organizational competitive advantage. One such phenomena who has been most
successful in bringing transformation or implementing change for a positive good is Mr. Yogesh
Chander Deveshwar, the chairman of ITC Limited.
Mr. Deveshwar was born on 4 February 1947 in Lahore, British India. He received his Bachelor
of Technology Degree in Mechanical Engineering from the Indian Institute of Technology,
Delhi in 1968. Y C Deveshwar joined ITC Limited in 1968. He was appointed as a director on
the board of the company in 1984 and became the Chief Executive and Chairman of the Board in
1996 and successfully continued till date. [1] In January 1996, Deveshwar inherited a fractured
organisation. Morale was low, and a number of top leaders soon went to jail on charges of
foreign exchange violations. The enforcement directorate found out that around $83 million was
transferred into India as per ITCs instructions to manipulate the invoices related to exports in
order to post artificial profits in its books. In late 1996, almost half of the executives on board of
the tobacco to hotels major ITC Ltd. were in jail on charges of FERA and excise violations. Here
is a quote said by a popular stock broker which aptly sums up the situation, There is no value in
ITC Classic. I wonder how ICICI will benefit from the merger. [2]
During these turbulent times Mr. Deveshwar took charge and very soon he introduced a new
structure of corporate governance based on the principles of trusteeship, transparency and
introduced distributed leadership at ITC. According to ITC sources, the setting up of the
Corporate Management Committee, which looks at day-to-day affairs in ITC, also took a lot of
load away from the executive directors, which was also why, despite a difficult year, ITC's
performance was very healthy.[3]
Y.C. Deveshwar is determined to give ITC a life beyond tobacco. His initial attempt at
diversifying had gone haywire, and its key foreign shareholder British American Tobacco (BAT)
Plc was pushing for greater control. .Within two years of taking the helm, Deveshwar was forced
to cut losses and get out of the edible oils and financial services business, but managed to keep
BAT from taking control of ITC with the support of Indian institutional shareholdersthe
erstwhile Unit Trust of India and Life Insurance Corp. of India. One battle won, plans for
diversification were redrawn. Within four years of Deveshwars becoming chairman, ITC was
again trying to enter new business segments. It started with stationery products, and soon
launched others such as food.
By all accounts, Deveshwar did a commendable job of bringing the company back on the
rails. His colleague and executive director, Anup Singh, describes him as a master strategist.
For the first five years, Deveshwar did little else but put in place strong systems.
By 2002, he had begun the search for new growth pastures. The companys biggest strength
is its distribution networkITC reaches two million outlets directly and four million more

Change Leader
indirectly. That, in turn, prompted Deveshwar to start looking at a large FMCG play. His
reasoning: ITC already had the relevant brand management skills. Sure, the large distribution
system needed tweaking, but there was little doubt that it was a formidable strength and above
all, it had a huge cash hoard (at current estimates, close to Rs. 12,000 crore) to fund the
expansion. There was another reason: Compared to the high gestation hotels and paper board
business, the FMCG business was relatively a low gestation one.
Today, only 40% of its net revenues comes from cigarettes, and the rest from hotels, paper
boards, infotech, agri-business and now increasingly, foods and personal care. Of these,
Deveshwar inherited hotels and paper board, the only two other businesses of any real scale,
from his predecessors. Clearly, Deveshwar knew how to take bold decisions. In the early part of
his era, he did discover and nurture e-Choupal, the concept of a rural trading platform using a
digital technology backbone. It fired the imagination of the business community and academia,
winning a plethora of awards.
Mr. Deveshwar has numbers too on his side. ITC grew at CAGR of 12.2% top line and 20%
bottom line during his 20 year tenure as a chairman at ITC. The reason for these phenomenal
growth rates is because of the transformation which took place at ITC from a cigarette company
to one of the largest Indian conglomerates. In his own words, Deveshwar says "Organisations
have to reinvent themselves because change is continuous outside." Transformations tend to refer
to changes that are more radical and of a larger magnitude. These are not incremental and
transitional changes that involve merely fine-tuning the status quo. Instead, they are
discontinuous changes or paradigm shifts that involve redefining the organizational values,
purpose, attitudes and beliefs, and they frequently require a qualitatively different set of
organizational habits, such as in terms of strategy, leadership and culture. These qualitative
changes brought in by Mr. Deveshwar changed the existing organizational systems, structures,
management practices, organizational climate at ITC.
References:
1. https://en.wikipedia.org/wiki/Yogesh_Chander_Deveshwar
2. http://www.icmrindia.org/free%20resources/casestudies/The%20ITC%20Classic
%20Story1.htm
3. http://www.business-standard.com/article/specials/itc-to-review-board-structure-in-sept197081201025_1.html
4. http://forbesindia.com/printcontent/14562
5. https://www.cscollege.gov.sg/Knowledge/Pages/The-Role-of-Leadership-inOrganisational-Transformation.aspx
6. http://www.livemint.com/Companies/M4IEWEGmFelQIu3UJ8s1XN/Themetamorphosis-of-ITC-under-YC-Deveshwar.html
7. http://www.financialexpress.com/fe-columnist/itcs-yc-deveshwar-all-you-want-to-knowin-brief/293928/