Concept Of Value Cells

Value Cells vs Value Kernels

 
 

The concept of value cells is not new nor novel. As a youngster at Tata International,India, shortly after my MBA, I was heading a "Value cell" for this trading organisation. The bank accounts and books of sixteen such "value cells" employing 1500 persons were separate; we had our own budgets, business plans, monthly review of Profit & Loss accounts and Balance Sheets, with a small summary, describing milestone events. The turnover of the company (Then called Tata Exports Ltd.) was USD 100 million appx. The smallest division (Value Cell) was USD 100,000 strong. I was the sole signatory of my "Value Cell" bank account. The system was very satisfying for the employees. For a long time I found it difficult to understand why other organisations that I worked for later could not follow this simple system. 

 
 

The employee turnover ratio was very low as compared to industry standards. The competency levels of the personnel were amongst the highest in the industry. The employees would not change jobs for higher salaries. To illustrate, my former boss at Tatas received an offer from an organisation that offered to double his pay package. The reason was that he preferred to work at half the salary but he declined the offer on thegrounds of differenpaid much more to people with lesser skills. Much later, after comparing the differences in the functioanl styles of both the obecause it was more satisfying.

 
 

The Tatas of India, the most respected Business Conglomerate of Indi, have aholding pattern that could be called a "Nested Value Cell Structure" . With this structure they control a conglomeration of more than 50 companies in diverse fields, present turnover exceeding USD 15 billion.

 
 

For years now I have talked of "Value Kernels" and my first reaction upon reading the Mckinsey article was to forward it to friends with whom I had shared the concept. Those intersted in knowing more, could go through internet archives where I wrote a few pages using the term "Value Kernels"

 
 

I am willing to share details with academic and other professionals who would like to join hands to develop the concept of "Managing through Value Cells" for which a proper understanding of " Value Kernels" and "Value Cells", architecture of organisations, nesting of cells, etc. is a prerequisite. There is great commercial potential as well for those in consulting and coomputing.

 
 

Only a deep and clear understanding of the concept of value, value integration, disintegration, conservation, construction of value cells, quantisation of value can help us unravel the Laws of Management which should withstand the test of time and not change by the decade.

 
 

Yadav Chandna