Cynthia Rodrigues

At Voltas, it is time for newer beginnings. And taking it to newer heights is Megavol, a dream plan to steer the company into the Rs10,000 crore league by 2010-11

Voltas has achieved a significant turnaround in the last decade. From a very precarious position in 1997 it has delivered 16 consecutive quarters of profit growth. Now, Megavol is Voltas’s plan to go from ‘Good’ to ‘Great’. Specifically, the dream is to forge the company into a Rs10,000 crore entity by 2010-11 at a 10 per cent profit. More importantly, Voltas would have a coherent identity within the engineering domain. In 2006-07 Voltas had revenues of Rs2,451 crore and PBT and extraordinary items of Rs155 crore.

Leading the band of people eager to make this happen is MD,
Ashok Soni. Along with his team, Mr Soni visited major Voltas sites and offices to communicate with his people that the aspiration is challenging but not impossible. Today, employees at every level are excited about making this dream come true.

Such a dialogue was absolutely essential.
Mr Soni says, “We convinced them that we had to grow the businesses to critical size and achieve competitiveness. We have to control the source of advantage, cut our costs, and improve our quality and efficiency. The biggest challenge on this journey is that the company, which had seen restructuring, voluntary retirement schemes, closure and sale of businesses, now needed to think about growth. The skepticism had to be addressed.

The journey to being Rs10,000-crore company may seem a long one but Voltas has already embarked on it. One of the major businesses — domestic projects businesses — has transformed itself from just handling air conditioning and refrigeration projects to complete electro-mechanical projects. Accordingly, the division has renamed itself, has communicated this change to the market place and has secured major orders as well.

This has been made possible by the change in the mindset and the extraordinary degree of involvement of employees. People are beginning to set aspirational targets for themselves. This renewed enthusiasm set in the context of the construction boom in India and the Middle East, places Voltas in a very advantageous position to achieve its goal. Voltas’s vibrant new image in the market is also impacting the results positively.

If there is any hurdle, it is in the lack of adequate human resources to do justice to the available opportunity of such magnitude. Mr Soni clarifies, “Hiring the right resources will be our biggest challenge over the next three years.” The same talent is being wooed by the IT industry, the growing businesses — real estate, infrastructure, retail, large engineering firms and the entire Middle East.

“Attraction, retention and development of talent are the greatest challenges as far as achievement of our vision is concerned,” says Mr Soni. “We are addressing the issue by getting students in the third year of engineering to enroll as summer trainees and offering them jobs as soon as they complete their education. We have a training institute in Hyderabad where we give recruits a six-week orientation on what to do when we take up a project. For hiring technicians, welders, plumbers, electricians, etc, we have tied up with the ITIs [Industrial Training Institutes].”

Voltas is eagerly embracing globalisation to fulfill its requirement of people. The company has entered into associations with entities in Sri Lanka and the Philippines where local people are hired and taken to destinations in the Middle East. Currently, Voltas employs people from various nationalities like Bangladesh, Sri Lanka, Philippines, Nepal, the UK and locals within the Middle East.

Mr Soni says, “We share information with our people and seek suggestions from them. We have been consciously trying to encourage innovation because that will be critical for achieving the objectives. We cannot sustain our operations unless we are innovative at every level. The idea is to create a culture in which growth can be sustained by ensuring high quality processes and IT systems.”

Changes are also planned in the business model. Procurement is been consolidated under one umbrella. Earlier each project used to procure on its own, for its own needs. In addition, some part of the overseas design activities has shifted to India.

The agenda also includes inorganic growth. Mr Soni says, “About 20 per cent of our Megavol target will come through inorganic growth. We need to buy companies not for the sake of turnover but for getting the right people, capabilities and market access. An acquisition will enable us to get into other verticals and have balance in the customer portfolio.”

Currently Voltas has a presence in building construction projects such as malls, hotels, hospitals, airports, etc, but it also has interests in MEP [mechanical, electrical, plumbing] jobs in the power sector and industries like pharmaceuticals, petrochemicals, etc. Its projects record includes the Emirates Palace Hotel and Burj Dubai, the upcoming tallest building in the world.

Mr Soni adds, “Since we want aspirational growth, we have to do things differently and many times over. We can’t be satisfied with doing what we have always done.” The company’s new in-house journal, V Shall, with its connotations of Vishal or massive in Hindi, symbolises its determination to achieve Megavol.

Armed with this roadmap, Voltas is well on its way on the journey from good to great.

Uploaded in January 2008