India would get 2 on 10 for quality: Adil Zainulbhai

Two years ago, Adil Zainulbhai, former boss of McKinsey India, was on holiday in Europe when he got a call from Amitabh Kant, then secretary of the Department of Industrial Policy and Promotion. Kant had a message: Prime Minister Narendra Modi wanted Zainulbhai to head the Quality Council of India (QCI). Zainulbhai’s first question: How many days a year would I have to work? Ten days a year, and four board meetings, was the reply. Zainulbhai accepted the job, and has put in many multiples of what Kant promised. Since the beginning of this year, he has already clocked more than 100 days. The assignment, he says, takes up 100% of his time. He has no office, and he doesn’t get paid for his work.

Not that he’s complaining. The Harvard Business School alumnus and mechanical engineer from the Indian Institute of Technology-Bombay is learning the tricks of working closely with the government and making friends with the young people working for him at QCI. He is also trying to improve the quality standards of goods and services in India.

Fortune India spoke to Zainulbhai to find out about quality standards in India and his plans for QCI. Edited excerpts:

What did Kant say that made you agree to take the job in an instant?
He said a couple of things. First, that it is an autonomous body. Its first chairman was Ratan Tata, followed by Venu Srinivasan [TVS Motors’chairman]. The most important thing that he said was that the Prime Minister himself wanted me to head the council. How could I say no to that?

It will be two years in September since you took charge. What has your time there been like?
Since we started, the level of activity has doubled, and by next year it will double again, and so on. That is great, but in reality we have to be 50 times bigger than what we are right now. From the perspective of an Indian citizen, what do you think about the quality of things that you use—goods, roads, services, and government services?

There has been a huge improvement in quality and there are some shining examples of how we are the best in the world. For instance, the quality of the software written by Indian information technology companies is on a par with the best in the world. If you look at the best hospitals in India, 20%-30% of their patients are medical tourists. We get patients from around the globe, and our best doctors are the best in the world because their clinical experience is top-class. So why can't we achieve this across sectors? I think the opportunities are tremendous.

We have sectors where we are the best, but there is no consistency...
The challenge is massive. If you look at any service in India, it’s a pyramid. At the top you have premier institutions, but as you go down the layers to where it affects more people, the quality is not very good. In education and health care, the quality isn’t very good. Currently, QCI does certifications and accreditation for the best hospitals, but the idea is to move that accreditation and help improve quality at the lowest level.

For example, there are 80,000 hospitals in India, and we have accredited 600. Now we have started a programme to accredit 30,000 more, and these are mostly state-level hospitals with less than 100 beds. This is where most people go, and these hospitals don’t have the money or the resources. We can help them become better.

How do you benchmark?
Setting standards is easy. What is difficult is convincing 30,000 hospitals that it is worth their while to improve their standards. In some states, for instance, all government hospitals now have to meet a minimum standard, and if they don’t, they will not be funded the next year. This may take a long time, but the standards will be met. We convinced the insurance regulator to stipulate that all private hospitals had to be accredited to enable electronic payments for insurance. You have to work to make it attractive for each hospital.

Will you try to make QCI certification a trusted mark like ISI?
There is no single mark that we are aiming for because the standards vary across sectors. For example, we have a standard for certifying high schools. The best high schools in India are now getting certified. In fact, international schools in Africa and West Asia are asking us to get them certified. The problem, again, is at the bottom of the pyramid—high schools at that level are terrible. They will need a different system of certification.

This seems like a gargantuan task. Can you take us through how it is done on ground?
A lot of what QCI does today is accreditation and certification. There are some industry bodies that come to us and ask for help in creating self-certification bodies. For instance, the retail industry wants us to create a mark for different kinds of products. The leather industry wants a leather mark. One of my favourites is pharmaceuticals. India creates some of the best generics in the world that meet U.S. Food and Drug Administration and European standards. But the majority of drugs consumed in India are terrible. Of the 30,000 manufacturers, the top 20 are good, the rest are terrible. The quality of the drugs bought by the lower strata, which are procured by the government and pharmacies that do not have a pharmacist, is bad. I am trying to figure out a way to set a standard, and those who meet it will get a mark. This way at least the government will not buy anything that does not meet a specific standard.

If you have to rate quality across sectors on a scale of 10, what do you think it would be?
We thought a lot about having a quality index, but decided against it, as it was too complicated. We will do it at some stage, but not now. My guess is we are at two, maybe even at three or four in some sectors, but we need to get to 10. Maybe once QCI is five times its size, this might happen.

Are there sectors that have the potential to do well?
Every sector can do well. Think about manufacturing. Today cars made in India are exported all over the world. The government didn't do it [it was the manufacturers who achieved such world-class standards]. It is possible to do it in every industry. The question is whether you have the mindset to do it, and whether the conditions are right. For example, why should our roads not be as good as anywhere else in the world? L&T builds roads in Dubai which are world class. Why can't we have the same here? There is corruption, pricing issues and so on. One way to do this is to put a mechanism in place which measures the quality of roads and compare it with those across the world.

NITI Aayog is doing a series of reviews with the Prime Minister on social and physical infrastructure, and we are helping develop a sense of quality. Everyone talks about volume of roads, but no one talks about quality, congestion, and safety. We are creating a series of metrics to measure these. Once we start measuring and ranking states and cities on quality, safety, and congestion, it will create competition among them to do better.

We all understand these issues but don't know what to do about it. How do you address the last-mile problem?
We can't solve everything. What we do know is that by setting standards, you create an incentive to do better. Say, if hospitals understand that they will attract a better kind of patient if the quality is higher, that becomes an incentive. If you can establish incentives for people, they will go for it. They have to be tangible. Incentives should be both the carrot and the stick.