While many managers are quick to blame their team when things go wrong, Sanjeev Kumar is adamant that a good leader should always take full responsibility. “Leadership is not failing your team when they need you,” he declares. “Leadership is taking responsibility on your head when things go wrong and answering to the public.”
As Chairman and Managing Director of Maharashtra State Electricity Distribution Co Ltd (MSEDCL), Sanjeev explains this is no small task. MSEDCL is the largest electricity distribution company in India and employs 79,000 people. “I’m responsible for running the company efficiently and profitably, as well as ensuring a reliable and quality power supply to more than 25 million consumers,” he says.
According to Sanjeev, communicating effectively and working as a team is essential in such a large organisation. “It’s a very big company, so without a good team, this can’t work,” he reasons. “Bringing all the people together on the same page is a tough task. Each message needs to be correctly understood by everyone. Therefore, I must ensure I clearly communicate my vision and objectives to my team.”
Sanjeev joined MSEDCL in late 2015 after more than 25 years of experience working for government departments, ranging from taxation to water supply and sanitation. “When I was given this role, I felt that it was a perfect fit for my background, competencies and knowledge,” he recalls. “I studied engineering and then I did my master’s in finance.
I feel that I also have an appetite for legal things. I thought it would be very challenging because it’s a corporation, which means we have to be independent. We can’t be going to the government asking for funds. We have to make money, satisfy our employees, satisfy consumers and improve our results. So, it was a very good challenge.”
As he reflects on his time at MSEDCL, Sanjeev says he feels proud that he has been able to turn around the company’s finances. “For the first time since the company was formed in 2005, we have made a book profit for three years in a row,” he says.
“Before that, just to give you some perspective, we only made a profit in 2007–08. All of the other years, we made losses. I consider this my biggest achievement, and we have now reached a level where we can aim to have book profits every year.”
Sanjeev adds that this could be converted into a cash profit if they are able to improve tariff collection from farmers. “We find that agricultural consumers are often reluctant to pay the money that they owe to the company,” he says.
Sanjeev also highlights the company’s technological advances as important milestones. A mobile app has been developed to give consumers access to the status of new connections, meter reading figures, bill estimates and payments, power outage details and complaint redress.
“Consumers have found these services very useful, especially the meter reading, probable bill and information on power outages,” he says. “We’ve also started notifying consumers via SMS that their meter will be read the following day within a two-hour time frame, let’s say between 3pm and 5pm. This means that the consumer can be present at the time of a reading if they wish. We no longer just show up at their premises at odd hours and say we want to read the meter.”
MSEDCL has also introduced a range of online services to allow consumers to request tariff changes, security deposit refunds and load enhancement or reductions, as well as apply for new service connections and submit associated documents.
“By taking these processes online and no longer physically receiving these applications, we have brought transparency, traceability, accountability and timeliness in services to the consumers, in addition to saving costs to both the consumer and MSEDCL,” Sanjeev explains.
“We try to anticipate consumers’ needs and use technology and administrative mechanisms to meet these. It is a continual journey that never stops. We should continually engage with our consumers so we can understand them better and provide for their needs efficiently.”
Innovation is high on the agenda at MSEDCL in order to reduce costs and improve electricity supply and services. However, Sanjeev cautions that it’s important for the company to adopt technology that suits its needs. “Technology can be a great enabler if we continually apply our mind,” he says. “We should adopt technology faster, but we must ensure it is appropriate and affordable.
Selecting technology just because it sounds good and has been adopted in other countries may not be useful or cost effective or both to an individual company’s needs. Yet we can usually develop alternative technology using the same building blocks by having our own internal discussions and deliberations.
We can come up with affordable solutions, which is what we have done with our centralised billing and collection platform.
Adopting technology, making it successful and getting it at a cost that is affordable to you and your consumers is the key.”
One of the biggest challenges facing Sanjeev and his team is the cost of purchasing electricity. “About 70% of our revenue is spent on procurement of power,” he explains.
“In fact, our transparent attempts to purchase the cheapest power has resulted in huge cost savings in the past three years and has also been appreciated by consumers.”
Another problem is distribution losses, yet Sanjeev is happy to say that these have been significantly reduced. “Our distribution losses are at 13.5 per cent, which is the lowest in the history of MSEDCL and one of the lowest in the entire country.
We have managed to achieve this reduction by introducing centralised billing, the installation of RF meters, energy accounting and by real-time analyses of data. We have used IT very extensively in the past two years to tackle this challenge.”
Sanjeev says the company works closely with its power and equipment suppliers to ensure they can deliver a high level of service to consumers. MSEDCL uses an e-tendering platform to select its suppliers via a transparent process.
“Some of our power suppliers have been working with us for more than 10 years, but our agreements with them are for 25 years. We sort out their problems and they sort out our problems, because if they supply power to us, we can supply it to the consumer.
Our suppliers have become confident working with us, and we are also confident about their credentials. I think our thousands of suppliers consider us to be good partners,” Sanjeev says.
Recognising that MSEDCL has a monopoly in electricity distribution in Maharashtra, Sanjeev believes it’s important that the company acts in the best interests of consumers. “We don’t have competition in the electricity business. This area has been given to us as a monopoly, so we need to remember that we are here as a guardian or trustee for the consumer,” he points out.
“This is why we need to purchase power at the lowest cost possible, because consumers don’t have any say in that. It’s not a competition, where consumers can go to Company B that is selling at a lower cost. So, every decision we make, from power to billing and collection, has to be transparent.
We have to be honest with our consumers, as well as polite and proactive. We have been trying to do that and have partly succeeded, but it’s a continual challenge. Our customers are very important to us and we’re determined to continue serving the citizens of Maharashtra in a sustainable manner at a cheaper cost.”
MSEDCL also highly values the contribution of its employees, conducting regular video conferencing with field offices to allow all staff members to suggest ideas for improvement.
“We do this every third Monday, and the video conferences allow us to interact with every last person in the field. Employees can provide their suggestions through this platform, and this initiative has created a sense of ownership among them,” Sanjeev says.
An employee reward program has also been developed to allow managers to recognise the efforts of their team members with cash and certificates. “During the financial year, on-the-spot awards are given to employees performing outstandingly,” he adds.
When it comes to developing his team, Sanjeev says that trust is essential. “I’m a big believer in leading by example,” he says. “In order to build a strong team, you need to trust and empower them. This is the key to developing second- and third-tier leadership for the future.
A good leader should take responsibility, possess quick and clear thinking to provide solutions to problems, and build his or her team on the basis of trust, transparency and integrity. Every organisation can be run with commonsense and a trusted team when basic intent is right. The right tools can be found and every situation can be converted into a win–win situation.”
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