top of page

By:

Rahul Kulkarni

30 March 2025 at 3:32:54 pm

Governance Is Modernization

By now, if you’ve followed this series, you’ve done something rare. You didn’t walk in and start “fixing” blindly. You understood the equilibrium. You reduced the fear of loss. You made the new way easier than the old way. You created rhythm. You built reputation and credibility. You learned to negotiate, build coalitions, digitize in small steps. And the previous article, Rahul spoke about the hidden requirement: psychological safety because without truth, every dashboard becomes theatre....

Governance Is Modernization

By now, if you’ve followed this series, you’ve done something rare. You didn’t walk in and start “fixing” blindly. You understood the equilibrium. You reduced the fear of loss. You made the new way easier than the old way. You created rhythm. You built reputation and credibility. You learned to negotiate, build coalitions, digitize in small steps. And the previous article, Rahul spoke about the hidden requirement: psychological safety because without truth, every dashboard becomes theatre. Now we close the season with the most grounded definition of “professionalization” I know. It’s not ERP. It’s not fancy roles. It’s not a new org chart. Because when power is unclear, everything else becomes unstable. Which seat are you stepping into? • Inherited seat: you may have formal authority, but decision rights are often still “family-managed”. • Hired seat: you may have responsibility without authority. That is the fastest path to frustration. • Promoted seat: you may have influence, but your boundaries are fuzzy, and that creates daily conflict. Different seats. Same reality: the business runs on invisible boundaries. The property boundary line Think about a property boundary line between two neighbors. When the line is clear, people may still argue but disputes are limited. When the line is unclear, every small thing becomes a fight: • “This is my parking space”. • “That tree is mine”. • “This wall belongs to who?” In a company, decision rights are the boundary line. If the boundary is not clear: • approvals become political • escalation becomes emotional • responsibility becomes a trap • people start bypassing • and “urgent” becomes the excuse for everything This is why modernization fails even after you digitize. Because digitization creates visibility, and visibility creates conflict if authority is still fuzzy. Governance sounds heavy, but it’s actually simple When people hear “governance”, they imagine board meetings and legal language. In MSMEs, governance is much simpler: Who can decide what, within which limits, and what happens when there is a conflict. That’s it. If you can answer those three questions, you’re already professionalizing. Why governance matters more in family-influenced firms In many Indian MSMEs, decisions are not purely operational. They are emotional and relational. A pricing exception may be linked to a relationship. A hiring decision may be linked to loyalty. A capex purchase may be linked to ego and legacy. This is not “wrong”. It’s just real. But when the company starts growing, this style doesn’t scale. It creates confusion: • managers don’t know what they can commit to • teams don’t know whose instruction to follow • the owner gets dragged into everything • and the new leader becomes the “bad cop” without any real authority There’s a light-touch academic way to describe this too: Jensen and Meckling wrote about “agency” issues … when decision-makers and owners have different incentives. The fix is not more control. The fix is clearer decision rights. The three decision rights that change everything If you do only three things in governance, do these: 1. Pricing authority Who can approve discounts? Under what limits? What is the exception path? 2. Capex thresholds Who can approve spending? Up to what amount? What needs owner approval? What can be delegated? 3. Hiring approvals Who can hire? Who can approve headcount? What roles require founder/family sign-off? These three create a surprising amount of stability. Why? Because they cover money, investment, and people … the three biggest emotional zones in MSMEs. What happens when these rights are not clear? You’ll recognize these symptoms: • people take decisions and later say “I thought it was okay” • approvals happen through WhatsApp messages that nobody can trace • the owner says “Why did you do this?” after the fact • managers get blamed for decisions they didn’t have the authority to make • teams bypass the system because “it’s urgent” • and your new “process” becomes optional again It’s not because people are undisciplined. It’s because the boundary line is not drawn. Field Test: Negotiate and document three decision rights This week’s field test is not a workshop. It’s a negotiation. If you try to enforce governance without safety, people will hide. If you try to digitize without governance, conflict will explode. This 12-articles season wasn’t about “fixing operations”. It was about how an incoming leader enters a legacy MSME without triggering immune response and then builds rhythm, credibility, coalition, safe digitization, and finally governance. Now that you can enter the system and steady it, the next macro-arc becomes obvious: How do you build the middle layer that sustains it … so the company doesn’t fall back into founder-dependence? That’s where real scale begins. (The writer is a co-founder at PPS Consulting. He is a business transformation consultant. He could be reached at rahul@ppsconsulting.biz.)

Discussions on among allies for govt formation: Ajit Pawar

Updated: Nov 29, 2024

Ajit Pawar

Mumbai: Deputy Chief Minister and NCP head Ajit Pawar on Monday said discussions were underway among the Mahayuti partners to finalise a formula for the new government formation in the state.


Speaking to reporters at Karad in Satara district, Pawar also acknowledged the contribution of the government's Ladki Bahin scheme, which provides financial assistance to women, in the Mahayuti's victory in the just-concluded state assembly polls.


The NCP leader also assured that the alliance was working cohesively following its resounding victory in the state assembly elections.


Pawar paid tributes to Maharashtra's first chief minister Yashwantrao Chavan at his memorial in Karad on his death anniversary.


In the state poll results declared on Saturday, the Mahayuti, which comprises the BJP, Chief Minister Eknath Shinde's Shiv Sena and Ajit Pawar-led NCP, bagged an impressive 230 of the 288 assembly seats.


The focus has been on BJP leader and Deputy Chief Minister Devendra Fadnavis, who is being seen as a strong contender to occupy the top post for the third time, as his party bagged 132 of the 149 seats it contested in the state.


Notably, Maharashtra minister and Shiv Sena leader Deepak Kesarkar has said his party legislators feel Eknath Shinde should continue as the chief minister of the state, where the ruling Mahayuti scored a landslide victory in the assembly polls.


Ajit Pawar said, "We will decide what formula to work out on the cabinet formation among the three parties."


Reflecting on the elections, he acknowledged the contribution of the Ladki Bahin scheme in the Mahayuti's win.


"We cannot ignore that Ladki Bahin helped us in this election. We are grateful to them (women voters)," he said.


Defending the scheme, Pawar, who is also the state finance minister, further said, "Had I been opposed to the Ladki Bahin scheme, I would not have presented it in the House. I discussed the scheme with several retired finance officers before finalising it."


Pawar also dismissed concerns raised by some opposition leaders over the Electronic Voting Machines (EVMs), pointing out that polls in states like Punjab, West Bengal and Telangana, governed by their political opponents, have been conducted with the same system.


Commenting on members of same families contesting against each other during the elections, Pawar expressed annoyance over repeated questions on it.


He then asked, "Why was my close nephew fielded? Atram's own daughter was fielded against him, and even Rajendra Shingne faced a similar challenge. I don't want to comment further on this. I have got tired of apologising for fielding my wife against Supriya. Yugendra was in business, then why was he prepared to contest against me?"


In the Baramati assembly seat, Ajit Pawar was pitted against his nephew and NCP (SP) candidate Yugendra Pawar.


In Aheri seat, NCP leader Dharamraobaba Atram's daughter Bhagyashree Atram contested against him on NCP (SP) ticket.

Comments

bottom of page