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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.)

Indian Shipbuilding A Must Win Marathon

Shipbuilding

With a coastline of 7500 KM, it is hard to imagine, that for the first 20 years (1947-1967) India had no ‘shipping ministry’. In 1967 a Shipping ministry “coupled” with ROAD transport was established. Since then, this ministry has been on a name changing ride, not once, not twice but six times. In 2009 the “ROAD Transport and Highways” was de-coupled and ‘Shipping’ ministry was formed. Turning point came in 2015 with a clear maritime vision for 2030 and 2047. Ministry was re-christened, aptly to Ministry of “Ports, Shipping and Waterways” in 2020.


Why is Shipbuilding important for a country?

a. A Shipyard becomes an opportunity hub and like a queen bee requires the support of an industrial colony to manufacture machinery and equipment.

b. National Shipyards support fleet renewal needs of the Navy.

c. Contributes to national GDP, increases inflow of FOREX.


Korea shipbuilding is 8% of GDP. Japan’s automobile industry is 2.9% of GDP. India’s shipbuilding a meagre 0.000578% of GDP. In context, India’s pharmaceutical industry, ranked third largest in the world is 1.72% of India’s GDP.


International Shipbuilding Market

The market is estimated to reach around USD 200 billion by 2029, growing at a CAGR of 4.84%. While India is at bottom with 0.07% of world share, behind Philippines 1.5% and Vietnam 1%, however on the positive side, India has done well in taking care of its defence needs, with 37 of 39 Naval ships being built in India yards. Rear Admiral S Shrikhande researching on maritime as a Fellow at Wollongong University, Australia, says “Shipbuilding in India needs both, serious incentivisation and dogged determination and not harping on being a big ship breaking country. That Garden Reach shipyard has a $54 million order for merchant ships from a German owner, is a good sign.”


Were Shipyards of 20th century in Flight mode?

Prominent shipyards in India were built in the colonial period. Mazagon Dock 1774, Garden reach 1884, Hindustan shipyard 1941 to cater to British navy and merchant fleet needs. Cochin shipyard 1972, Adani Katupalli 2013, Reliance Naval and Engineering, Rajula Gujarat 1997 and others have limited capacity, hence a lot more work to do. Capt. Subhangshu Dutt (Singapore) a mariner and now a shipowner, says “GOI should hold hands in any collaboration till the marriage with the foreign entity is reasonably stable. He also suggests that “new shipbuilding sites should be given to existing successful shipyards since they have decades of experience and talent. Consortium of 3 or more parties may also be good idea”.


Shipbuilding GOLD

As per SPLASH report the demand for LCO2 carriers could reach 2,500 ships by 2050. As per other estimates, 40% of global fleet of ships could have wind propulsion by 2050. A surge in such vessels is due to an unparallel waves of decarbonization in the shipping industry. Demand for ships with ‘carbon neutral’ badges, such as Dual fuel, Wind assisted, Nuclear fuel ships, Hydrogen powered ships, Liquified CO2 (LCO2) carrier, is outstripping supply. A must in the ‘bucket list’ of every Shipyard. Pinning down a standard ROI in shipbuilding is not easy, but experts suggest it could range from 4% to 15% for the high demand ‘carbon neutral’ ships. While an LNG new build vessel could cost US$ 250 million upwards.


International collaboration

On China’s shipbuilding success story, Manoj Pandalanghat (Singapore) a mariner and ship owner believes that “China has around 50 active Shipyards. Each have a few large dry docks. In each dock two or more large vessels are built simultaneously. Thus, a single yard is able to roll out 2/3 vessels/month, 36 vessels/year and 50 shipyards roll out 1800 vessels/year”.


China could be a jaldi-5, but India needs a sturdy Mount Fiji. Besides technology, Japanese bring the most important hand baggage of soft-skills and culture, essential for success from keel laying to delivery. Maruti’s is a standing example.


Food for thought for New Delhi

a. Expertise: Hire Naval Architects and shipbuilding experts with current international experience.

b. Government assistance: Land, Financial support, subsidies and timebound clearances.

c. Monitoring: PMO should monitor the first 5 to 10 years till Shipbuilding takes-off on this long-haul flight to destination 2047.


India’s Shipbuilding is expected to grow to $237 billion by year 2047. On a back of the envelope calculations this works out to about 4% of India’s 2047 projected GDP of $ 5 trillion. While cars are driven on roads, however the Ministry of roads and transport has little to do with “Automobile manufacturing”. On a similar note, ‘Shipbuilding’ as an industry has little to do with Ports, Shipping and Waterways, thus it may be worthwhile to consider a separate ‘Ship-building’ wing in the Ministry of Ports, Shipping and Waterways headed by a dynamic cabinet rank minister. Since 2047 targets are stiff and an uphill task, so in all probabilities, the officials in Ministry of Ports, Shipping and Waterways are likely to push beneath the carpet, delays and failures of Shipbuilding with sweet success stories of “Ports, Shipping and Waterways” and if this does happen then India will not only miss the Shipbuilding bus of 21st century but a lot more from a national security and strategic perspective.


(The author is a Shipping and Marine consultant. Member Singapore Shipping Association and empaneled with IMO as a specialist consultant. Views personal.)

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