An Organization Is The Lengthened Shadow Of Its Leader

Why should an Industrialist find a place in my proposed book on labour matters? Because he is an employer par excellence who has created a monolith organization with its pathbreaking progressive policies and practices. In the field of industrial relations such an entrepreneur is a precious exception.

A round faced man, with very little crown left on head, slightly overweight though not obese, displays little dress sense, one who laughs easily and loudly, outspoken and also brutally open when he speaks – the hallmark of people from Konkan, an entrepreneur who hates using laptop but prefers instead to speak and hold long conversations in person, one who is found among people instead of his airconditioned conference room, Mr. Hemant Mondkar does not fit the typical image of an IITian or a successful entrepreneur.

Yet there are many things which stand out. He is a voracious reader, quotes from Jiddu Krishnamurti and Upanishads, Mondkar excels in converting a concept into actionable plan, he has his opinion on various current issues facing the world. And his ability to hold difficult yet respectful conversations, his solution orientation and ability to influence people, and his passion for engineering stand out when you meet him.

Mr. Hemant Mondkar came from a family of modest means, but the members of the family were intelligent and well-read thinkers. Financial condition of his family obviously has taught some important survival lessons to this eldest son and shaped his personality.

The most important life event was admission to IIT-Powai, graduating from where doors of big corporations open on good pay. Mondkar picked up a job in RH Windsor where he met his guide, his Managing Director, who played an important role in influencing some critical decisions of Mondkar.

He then joined Richardson Hindustan which later became Proctor & Gamble. Mondkar studied how corporations work because he had an agenda – he always wanted to launch a company of his own. And he borrowed Rs 10 thousand from his wife, kicked his well-paying job, purchased an old lathe machine, put it under a makeshift shed and employed one worker. Mondkar too worked in the evening on the lathe.

Gradually the business grew, apart from setting up a factory in Thane he also set up a factory at Chinchwad Pune. The latter was set up to supply his products to a well-known Auto industry giant. And soon came a twist in the tale, and to his fortune.

The auto industry honcho asked his suppliers, Mondkar included, to ‘self-certify quality, cut cost by a certain percent point, and ensure ‘just in time’ delivery.’ This required radical changes in the factory operations, and many suppliers did not accept the challenge, but Mondkar did.

Mondkar engaged his friend Mr. Grover who was to establish later  ‘Kaizen Institute South Asia and Africa’, to help him establish ‘Lean Manufacturing’ which is a ‘production philosophy focused on maximizing customer value while minimizing waste’ and which is inspired by Toyota. This not only radically changed the production practices but also changed the way of thinking about business processes in general including managing people. 

This change required cooperation of workers in implementing the new practices. They asked Mondkar ‘what was in it for them?’ and Mondkar promised to share the wealth generated by his business on full implementation. He kept his promise.

Mondkar implemented a systematic way of sharing ‘valued added’ with workers and the method of calculation was explained to workers. The formula is simple, ‘Value added’ is defined as the sum of Profit before Tax, Depreciation, Interest and Employee Cost. This is divided in three parts: One part (40%) is retained within the organisation, one part (30%) is paid to the Shareholders and Bankers, and one part (30%) is shared with all employees. The employees’ share works out to approximately 8% [of the PBT] after deducting employee cost. This is shared based on actual hours of work put in by employees! Interestingly this Value Addition is extended even to the contract workers who have worked in the factory for at least three months.[1]

The workers calculate VA every month and enthusiastically engage in removing non-value adding activities. The result: They get their share of VA which is equivalent to about 30-35% of their fixed pay including bonus.

Mondkar has been sharing wealth with all employees irrespective of status, through his Company ‘HyTech Engineers Ltd.’ And it is an area where even the best among the industry has not ventured. 

The result of comprehensively implementing the Lean practices had its benefits – the employees welcome change, as evinced by the second wave of implementation of lean practices in 2025, making HyTech Engineers Ltd. one of the best implementers of the Japanese practices.

HyTech Engineers has never made a loss in their 48 years of operations.

Mondkar’s approach to people was shaped by Stephen Covey’s book ‘The Seven Habits of Highly Effective People.’ He frequently quotes from the book while discussing people practices. It has shaped his philosophy; he advocates that the approach of his managers must follow ‘People, Processes, Results,’ in that order.

In other words, managers must solve problems of their people, provide tools, role clarity and necessary training to do their assigned work. In case there are mistakes he must check if the employee was adequately trained, and if so whether he followed the right process, and also if the process needed change. Results will follow, he says. This approach is again radically different from what we commonly see in the industry where results are everything. Wrong decisions and behaviors stem from pure results focus.

The most innovative and pathbreaking work of Mondkar is to train five workers, all only matriculates, to run the Thane factory. It is also the most profitable factory in his stable. The five workers meet every Saturday and work out a ‘rolling plan’ for the coming weeks! And they plan the work right up to the dispatch stage, also deciding on the sanctioning of leave and related administrative matters. This quintet has been well trained to manage cost; they understand how to remove ‘non-value adding activities’ and speak the language of ‘Lean manufacturing.’ They track the sales their factory achieves and also the profits it makes.[2]

Mondkar’s roots in philosophy also help him take radical decisions. For example, he focuses on ‘reformation’ and not on ‘retribution.’ Three workers were involved in stealing material and they were apprehended. They were questioned on ‘why they did it’ with a view to understanding them, and not on ‘how they did it’ to punish them. One of the workers left the company but two continue to work. They have been meted out the punishment of loss of Value-Added benefit for a few months. In any other organization, the three workers would have been shown the door instantly. ‘They were not criminals,’ Mondkar said, “They were misguided people who realized their mistakes, they felt ashamed and apologized, so we did not dismiss them.’ Such instances of reformative attitude are rare in the industry, and they come only from a man who believes in the goodness of people.

It takes courage to practice reformation and it comes from a person who has evolved not just as a businessman but also as a person. ‘My problem is that I trust people easily, and I have lost a lot as a result,’ he rues. ‘You would have lost much more by not trusting people,’ we say to him.

He knows it well. His Guru Stephen Covey says, “Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.” That is how Mondkar has built HyTech Engineers Ltd. – on the foundation of trust.

And how this organization mirrors the founder!

PS: This blogger is associated with HyTech Engineers Ltd. as an Independent Director.

Vivek S Patwardhan

“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.” All matter copyrighted.

---

[1] ‘Sharing Wealth with Employees’ https://vivekvsp.com/2015/08/sharing-wealth-with-employees/

[2] ‘When Five Workers Run a Factory’  https://vivekvsp.com/2023/04/five-workers/