March Issue - Where are the People? by Ester Martinez

FROM THE EDITOR’S DESK

WHERE ARE THE PEOPLE?

tudy after study has highlighted India’s favourable demographic trend when compared to other BRIC countries. As per a United Nations report, India’s working-age population is expected to shoot up by 240 million (24 crore) over the next two decades. This will impact not just economic output, but also consumption, investment and savings if this working age population is absorbed into the productive sphere. And that is one big IF.

As we speak to various stakeholders – corporate leaders, educationists and policymakers, a few alarming trends emerge. First, employability of graduates from disciplines like engineering, commerce and management is very poor and this can be largely attributed to low-quality academic institutions controlled by people with political influence. Second, there is a huge shortage of professionals in disciplines like medicine, biotech and hi-tech research. And finally, there is a massive projected shortfall of skilled non-graduate professionals in retailing, hospitality, BFSI, healthcare and construction. The idea of surplus capital and insufficient labour is an alien one in the Indian context. Yet, there is growing evidence of a deep-rooted problem of institutional apathy, outdated curriculum and poor planning at a central level, which, if not rectified, could undermine the core competence of this blooming economy. Our cover story digs deeper to understand what is wrong and what can be done to address this situation. We collect views from industry leaders, educationalists, policy-makers and from research to unravel the reasons and to look for solutions to the large talent shortage confronting us. In this issue, we also bring interesting insights into managing diversity in the workplace (Aparna Sharma), making ESOPs work (Harshu Ghate) and survey results from Kenexa Research Institute on how leadership teams affect employee satisfaction. Rajeshwar Upadhyaya dazzles with his thoughts on the connection between the Indian ethos and our acceptance of mediocrity. With every issue, we look to bring you insights into some of the most pertinent people and organization related topics of the day. We hope our efforts to deliver diverse concepts and ideas from a wide spectrum of thought leaders will contribute to your development and your organization’s success.

Ester Martinez ester.martinez@peoplematters.in

4 • People Matters • March 2010

A new Future needs a new Conversation People Matters was invited as media partner at the Inspired Leadership Conference at SOIL in February. The conference hosted Peter Block’s two-day seminar, where we discovered new ideas from the best-selling author of ‘Flawless Consulting’ on the importance of community and conversations in creating a distinct future. This is followed by a conversation with Peter Block and Anil Sachdev, Founder of SOIL.

Retention through Succession Planning Both succession planning and retention go hand-inhand in keeping up employee engagement and retaining key knowledge in the organization. Rajesh Rai, in his usual practical style, takes us through the process of creating a successful succession plan and linking it to both business sustainability and employee satisfaction.

Changes in Personal Taxation – What You and Your Employees Must Know Since the previous Annual Budget in July 2009, the rules around the taxation of benefits have changed dramatically. As a result, the economic impact on salaried employees has also changed. This article brings us up-to-date practical examples on how the new rules could affect your employees’ salary and ideas on how to restructure CTC smartly and minimize the impact on the company’s and the employee’s pocket.

FEEDBACK

Letters to the editor LEADERSHIP FACTORY

IMPRESSIVE

The Leadership Factory cover story was one of the most impressive compilation of thoughts from CEOs and HR Heads that I have read in any business magazine in India. I congratulate People Matters ’ team for the maturity and deep understanding of the subject. Looking forward to more impressive cover stories in upcoming issues. Sanjay Singh (on the web)

I am delighted to read People Matters February issue. The idea of collecting leadership thoughts on grooming leaders is impressive. Thank you for sharing with the readers of People Matters. Praveen Sinha (on the web)

LEADERSHIP FACTORY? I really enjoyed the cover story, Leadership Factory in your Feb issue, but I wonder how many companies in India really care in identifying and grooming leaders. From my experience in the corporate world both in India and abroad, Indian companies still treat their employees like commodity and many employees not only feel disengaged but also negative about their jobs. I hope many more companies understand the importance of talent and the value of their workforce. Neera Rai, Chennai

CONGRATULATIONS! Really glad to see the progress of People Matters as it becomes a benchmark for Leadership and People Management issues in India. I would like to congratulate you for your superb cov er story. Keep up with the good work. VK Ramasubramanian, Bangalore

6 • People Matters • March 2010

editorial@peoplematters.in

BEST AMONGST ALL Being a Managing Committee member of NHRD, Mumbai Chapter, it gives me great pleasure to be associated with People Matters. Thank you for your support during the NHRD’s 13 th National Conference. Congratulations for bringing out such a wonderful magazine on human resources related topics. It is aptly titled as People Matters and very effectively de als with all matters related to human assets. It has been a pleasure to go through all the editions published so far and we look forward to your cont inued success. Needless to add the production quality is second to none and perhaps the best amongst all the HR publications in India. - Deepak Deshpande, Mumbai

FANTASTIC ISSUE I received a copy of People Matters. It is fantastic. My compliments to the complete team in bringing out a content rich magazine. - Mita Dixit, Mumbai

IMPRESSIVE EDITORIAL I am impressed with the quality of editorial — and the finish — truly a class product — filling a much needed gap. - Deependra (Dipy) Nigam, Mumbai

PROGRESSING VERY WELL INDEED People Matters is progressing very well indeed. I am quite positively impressed with the high quality of the articles and the presentation. - Sanjeev Kotian (on the web)

LETTER TO MY CHILDREN I really enjoy ed the read of Mr. Redman. His approach to slicing the generational gaps and how those apply to the organization is fantastic. I found the article to be a great reflection for professionals of today. - Kamal Singh, Delhi

FRESH THINKING People Matters magazine has a very fresh “thinking” to it, with original thoughts and always nicely presented to the readers, in style. I will be most happy to contribute to this magazine. - Praveen K. Sinha, Faridabad

LEARNING FROM THE BOOK OF CRICKET Thanks for sharing wonderful insights of leaders and their crew. Narsimham (on the web)

CONTENTS COVER STORY

Vol. I • Issue No. 2 • March 2010 Editor: Tejasvi Mohanram tejasvi.mohanram@peoplematters.in Managing Editor: Ester Martinez ester.martinez@peoplematters.in Deputy E ditor: Dr. Tanaya Mishra Senior Editor: Sudakshina Basak s.basak@peoplematters.in

WHERE ARE THE

PEOPLE?

Associate Editor: Ankit Garg Corporate Relations:Tanuja Abburi Sales & Marketing: Rahul Singh rahul.singh@peoplematters.in +91 (124) 4148102 Supplement Sales: Heena Bhatia heena.bhatia@peoplematters.in +91 (124) 4148103 Subscriptions: Rekha Choudhary rekha.c@peoplematters.in +91 (124) 4148101 Layout & Design: Shinto Kallattu Webmaster: Jose Miguel Gomez Featured in this issue: Ajit Rangnekar Anil Sachdev Hari Menon Peter Block Pramod Bhasin Prof. Dr. Uday Salunkhe

Rajesh Sud Rajit Mehta S. Padmanabhan Sanjeev Bhikchandani Smita Anand Yogesh Sood

Contributors in this issue: Aparna Sharma Linnet Furtado Dhruv Agarwala Praveen Sinha Dr. R. Krishna Murthy Rajan Kalia Dr. Uma Ganesh Rajesh Rai Gurdeep S. Hora Rajeshwar Upadhyaya Harshu Ghate Shantanu Dhar Jithesh Anand Steven J. Spear Kartik Varma

There is a near-consensus on the structural problems plaguing our education system. People Matters explores to understand what is wrong and what can be done to address this situation. -Tejasvi Mohanram & Ester Martinez 31 Skills Special: Bridging the Skills Gap -Dr. Uma Ganesh

EXPERT VIEWS AJIT RANGNEKAR

S. PADMANABHAN

Dean, Indian School of Business

Executive Director (Operations), Tata Power

AQUIL BUSRAI Executive Director, Human R esources , IBM

PAUL CRAIG BIRCH

ATUL SHARMA

Group President Human Resources, Punj Lloyd

Director – Human Resources for Monsanto India

Printed, Published & Owned by: Tejasvi Mohanram

BALA BALACHANDRAN

Published at: Tetra Media Pvt. Ltd. 1014, 10th Floor, Galleria Towers DLF Phase IV, Gurgaon - 122009 Tel: +91 (0) 124-414 8101 Email: info@peoplematters.in www.peoplematters.in

J.L. Kellogg Distinguished Professor of Accounting and Information Management

Printed at: Rakesh Press A7, Naraina Industrial Area, Phase II, Delhi-110028 Tel: 011-45 666 555 (30 Lines) Note to the readers: The views expressed in articles are the author ’s and not necessar ily those of People Matters. Although all efforts have been made to ensure accuracy of text, neither the editors nor the publisher can take responsibility for consequences arising from errors or omissions in the information provided. This issue of People Matters contains 88 pages including cover.

8 • People Matters • March 2010

P. DWARAKANATH Director – Group Human Capital, Max India

DR. GANESH NATARAJAN Memb er Chairman’s Council, NASSCOM and CEO, Z ensar Technologies

PRAMOD BHASIN President & CEO, Genpact

DR. RITU ANAND VP & Deputy Head, Global HR, TCS

ROSABETH MOSS CANTER Arbuckle Professor of Business Administration, Harvard Business School

SANJEEV BIKHCHANDANI

CEO, IndiaSkills

CEO, Info Edge India (Naukri.com)

MANISH SABHARWAL

PROF. DR. UDAY SALUNKHE

Co-founder and Chairman, TeamLease Services

Group D irector, Welingkar Education

HARI MENON

LEAD SPEAK 10

A New Future Needs a New Conversation -Peter Block

Creating an Alternative to the Patriarchal Model -Anil Sachdev & Peter Block

Consolidation Before the Next Level of Growth -Face to Face with Smita Anand

Personal Assessment: A Journey, not a Destination -Gurdeep S. Hora

The Concept of Evil and the Acceptance of Shoddiness -Rajeshwar Upadhyaya

GLOBAL PERSPECTIVE 14

Leading in a High Velocity World -Steven J. Spear

Strategy and Execution - Essential Skills for a Modern Leader -Robin Speculand MANAGING TALENT

Young Indians at Work -Dr. R. Krishna Murthy

Retention Through Succession Planning -Rajesh Rai

MANAGING DIVERSITY 54

Managing Diversity in the Workplace -Aparna Sharma TRAINING SUPPLEMENT

Why so Much Employee Development Fails and How to Make it Stick? -Raj Bowen

Bet on L&D to Save the Day -Sudakshina Basak

Does an Organization’s Leadership Team Really Affect Employee Satisfaction? -Kenexa Research Institute

Successful Training Initiatives Require a Thinking CEO -Face to Face with Yogesh Sood

Effectiveness of Learning Initiatives -Linnet Furtado & Jithesh Anand

Think Big... Think Different -Praveen Sinha

Buyer’s Directory

MANAGING REWARDS 40

Making ESOPs Work -Harshu Ghate

Changes in Personal Taxation -Dhruv Agarwala & Kartik Varma

4 6 68 69 69

PM COLUMN 44

Looking Forward to a Monday Morning -Shantanu Dhar

We value your feedback. Write to us at: info@peoplematters.in

•

From the Editor’s Desk Letters to the Editor Knowledge & Networking Upcoming Events Training Programs

Read us online at: www.peoplematters.in

People Matters • March 2010 • 9

LEAD SPEAK

eadership is the capacity to give the world some thing that did not exist before. Peter Block’s new work focuses on a methodology that may have the capacity to create a distinct future. This methodol ogy is centered around an empowerment that is shared and owned by the community, as well as the responsibility of the team. This methodology is simple as well as powerful. At the base of it are three simple steps: • Future is transformation; Small groups are the unit of transformation • Transformation is linguistic; if you change the conversation you can change the world. • Future arises out of our questions and not our answers; Leadership as opposed to management can create an alternative future. Management creates predictability, order, structure that is necessary and useful. It does not create an alternative future. Our traditional management system has fallen to the patriarchal modus operandi, where father-child relationship negates the possibility of the team to engage and be accountable. This patriarchal system not only relegates the individual in the hands of managers but also creates an expectation of protection from the manager, which reinforces the inequality of the relationship. At the end of the line of ‘safety’ there is a price to pay, and that is ‘loss of freedom’; at the end of the line of ‘Freedom’, there is also a price to pay and that is ‘anxiety’. Creating a future that is different from the past comes from creating a different set of conversations. Past is fiction, it is the story of the past. To create a new future, we need to create a new

A New Needs a New

Future

Conversation In conversation with Peter Block during his workshop at the Inspired Leadership Conference, SOIL, we rediscover the importance of community and conversations in creating a distinct future

10 • People Matters • March 2010

LEAD SPEAK story, a new conversation - conversations that come from questions, carefully framed to create an opportunity for engagement, ownership and commitment. Here is how Peter Block defines each conversation:

dreamed of. Declaring a possibility wholeheartedly is the transformation. The leadership task is to postpone problem solving and stay focused on possibility until it is spoken with resonance and passion.

One: The Invitation Conversation

Four: The Dissent Conversation

Transformation occurs through choice, not mandate. Invitation is the call to create an alternative future. What is the invitation we can make to support people to participate and own the relationships, tasks, and process that lead to success? The invitation must contain a hurdle or demand if accepted - a challenge to engage. Most leadership initiatives or training is about how to “enroll” people to do tasks and feel good about doing things they may not otherwise want to do. Change is a self-inflicted wound. People need to “self-enroll” in order to experience their freedom of choice and commitment. The leadership task is to name the debate, issue the invitation, and invest in those who choose to show up. Those who accept the call will bring the next circle of people into the conversation.

The Dissent conversation is allowing people the space to say “no”. If we cannot say “no” then our “yes” has no meaning. People have a chance to express their doubts and reservations, as a way of clarifying their roles, needs, and yearnings within the vision and mission being presented. Genuine commitment begins with doubt, and “No” is a symbolic expression of people finding their space and role in the strategy. It is when we fully understand what people do not want that we can fully design what they want. Refusal is the foundation for commitment. The leadership task is to surface doubts and dissent without having an answer to every question.

Two: The Ownership Conversation

This conversation is about individuals making promises to their peers about their contribution to the success of the whole organization. It is centered in two questions: What promise am I willing to make to this enterprise? And, what is the price I am willing to pay for the success of the whole effort? It is a promise for the sake of a larger purpose, not for the sake of personal return. The leadership task is to reject the concept of barter and demand either authentic commitment or ask people to say no and pass. We need the commitment of much fewer people than we thought to create the future we have in mind.

(as opposed to mandate)

(as opposed to blame )

(as opposed to lip service)

THE LEADERSHIP TASK IS TO REJECT THE CONCEPT OF BARTER AND DEMAND EITHER AUTHENTIC COMMITMENT OR ASK PEOPLE TO SAY NO AND PASS

This is one that focuses on whose organization or task is this? The conversation begins with the question, “how have I contributed to creating the current reality?” Confusion, blame and waiting for someone else to change are a defense against ownership and personal power. The enemy of ownership is indifference. The future is denied with the response, “it doesn’t matter to me— whatever you want to do is fine?” This is always a lie and just a polite way of avoiding a difficult conversation around ownership. People best create for that which they own and co-creation is the bedrock of accountability. It is the belief that I am the cause, not a bystander. The leadership task is to confront people with their freedom.

Three: The Possibility Conversation (as opposed to problem solving) This focuses on what we want our future to be as opposed to problem solving the past. This is based on an understanding that living systems are really propelled to the force of the future. The possibility conversation frees people to innovate, challenge the status quo, and create new futures that make a difference. In new work environments this conversation has the ability for breaking new ground and in understanding the prevailing culture. Problem solving and negotiation of interests makes tomorrow only a little different from yesterday. Possibility is a break from the past and opens space for a future we had only

Five: The Commitment Conversation (as opposed to barter)

Six: The Gifts Conversation (as opposed to deficiencies) What are the gifts and assets we bring to the enterprise? Rather than focus on our deficiencies and weaknesses, which will most likely not go away, focus on the gifts we bring and capitalize on those. Instead of problematizing people and work, the conversation is about searching for the mystery that brings the highest achievement and success in organizations. Confront people with their essential core that has the potential to make the difference and change lives for good. This resolves the unnatural separation between work and life. The leadership task is to bring the strengths of those on the margin into the center. People working in small groups create a community, and that community’s conversation of what they want to create together is at the heart of creating a new future. People Matters • March 2010 • 11

LEAD SPEAK

Creating an Alternative to the For Indian leaders, the value of relationship comes naturally from culture and tradition so we have seen this trait in the way that organizations function internally

Patriarchal Model In conversation with Anil Sachdev, founder of SOIL and Peter Block, author and consultant about creating a distinct future through partnership

- ANIL SACHDEV

eter, tell us more about your evolution from the ‘change agent’ for institutions as represented by you in ‘Flawless Consulting’ and the work that brings you to change communities to create an alternative future. There are things that happen in your life that changes your interest and focus. I was in the Philippines in the early nineties, just after the revolution and that made me realize that people in the community arena are more passionate and I like being in a room with committed people. I have said everything I had to say about institutions, the community offer a much larger and complex area.

Peter, what do you think is unique about leadership in India? What is unique is that you can bring a spiritual dimension in the leadership conversation without the hesitation of being relevant. There is also more innocence in India and the social dis-

12 • People Matters • March 2010

tance is not that big here, you would expect it is because of the social structure in India but here CEO can be in the same room as the rest of employees and it is not a big deal.

Anil, how do you think Indian leadership is different? The concept of leadership is different in different parts of the world based on the different cultural and social aspects. For example, in Europe people have compartments in their life with greater difference between professional and personal dimensions. In India, there is a new confidence and energy. Leadership has this new confidence and energy within, but you can also see the evolution towards compassion and return to the roots as part of this tendency.

What is Inspired Leadership? Peter: What makes a great leader is to be a good human being. It makes me uncomfortable to define leadership as a set of competencies or skills. I get nervous when you say we will

LEAD SPEAK

train leaders. Leadership is a quality inherent to human and not a quality associated with people at the top. Humanity and authenticity are human qualities, and yet very rare to find today. The education system and the institutions split individuals between Me a working person and Me as a human being. A child that loves to learnâ&#x20AC;Śwe transform him into a performer. And when we say performance is the point, then the humanity is being stolen. Anil: If you truly understand what your life calling is, you deeply know what your gifts are, and if you find work that helps you use your gifts towards your life purpose that is the authentic living, which is authentic leadership. Leadership is a four dimensional process, leadership of the body and leadership of the mind, leadership of the intellect and leadership of the consciousness. If there is integrity between all these dimensions and your purpose, only then can you be authentic. Peter: This is leadership from the spiritual and psychological sense, for me I am more of sociology and anthropologist, for me leadership is in the context of the community and the organization. I feel leaders have lost their authenticity because of our expectations from them. We seat leaders on such a pedestal that they have to fall.

Tell us more about how conversations can transform organizations? Peter: I believe that transformation is linguistic; there has been a strong movement in the last 10 year about how changing your story can change your life. There is also evidence that shows that performance is a communal act and not an individual effort. All performance is collective, there is no such thing as outstanding individual performance, and it is a myth. If that is true, that means you need the community to create a change.

There is no evidence that high performance comes from incentive pays or from performance appraisal. I believe it is not true. Conversations and engagements bring high performance because it leads to high relatedness and high connection and every evidence we have is that performance is a team function. So how you create a good team? Engaging in a conversation, this is not new... we have been doing team building since the sixties, because it works.

So the basis of the traditional management does not work? Peter: There is nothing that destroys performance more than performance reviews. It is an institutional form of claiming sovereignty over another human being. We have this methodology about performance pay, about performance review, feedback, working on deficiencies... and this has been around for more than 20 years and it does not work, it has no effect but negative. But the patriarchal system is so powerful - these are the pillars of the patriarch. The only evidence I see in the US is between paying executives with stock options and unethical illegal behaviour. Companies have started to shift; smart corporations break themselves in smaller groups, many things are changing in those organizations by getting rid of the patriarchal system. The fact that SOIL exists means that there is a desire from corporations for a different style of leadership. Some organizations are so committed to this patriarchal system that they prefer to die than to change. Anil: Many Indian companies have taken steps in changing their internal models towards engaging and creating an internal community. For Indian leaders, the value of relationship comes naturally from culture and tradition so we have seen this trait in the way that organizations function internally.

There is nothing that destroys performance more than performance reviews. It is an institutional form of claiming sovereignty over another human being - PETER BLOCK

People Matters â&#x20AC;˘ March 2010 â&#x20AC;˘ 13

GLOBAL PERSPECTIVE

Leading in a

High Velocity World The movement of people, products, ideas, information today shows no sign of losing velocity but only of speeding up even further. Steven J. Spear, senior lecturer, MIT, elaborates on how market leaders can outdistance the competition

roducts, people and information move with incredible fluidity and velocity. This fundamentally affects how leaders have to manage the organizations for which they are responsible. The imperative once may have been to gather and hold assets when things were more static. With intense competition for resources and intense competition for customers, monopolies are hard to create and sustain. Hence, the managerial imperative is now ensuring that resources are put to better and more productive use. The issue is not what you hold in any static sense, but how quickly you move from delivering on one great

14 â&#x20AC;˘ People Matters â&#x20AC;˘ March 2010

idea to the next. In short, success depends less on accumulation and increasingly on innovation. The products and services we make and use are so complex that it makes the need to cultivate high speed, sustained, broad based innovation even more compelling. This is because no one person is sufficiently dexterous (or even has enough time) to create great designs by him or herself. Fortunately, there are eloquent examples of how leading an innovative organization has done, and there are great rewards to those who learn to do the same.

What Does This Mean? Until a few hundred years ago, people and the things they used, did

...SUCCESS DEPENDS LESS ON ACCUMULATION AND INCREASINGLY ON INNOVATION not migrate very far. A person only traveled a few miles from his or her birthplace, if at all. Particularly when most people faced scarcity of one thing or another, the key was to accumulate and store as many assets as possible. This may explain why the Spanish and Portuguese used nautical innova-

GLOBAL PERSPECTIVE tions in the 1400s to race to the ‘New World,’ to gather up gold, silv er, and other precious commodities. With advances in transportation through the 1800s, there were still rewards to asset accumulation perhaps not of physical items themselves, but in the ability to identify where they were and in the ability to get them to where they were most valued. Hence, we saw the rise of large merchants and department stores that succeeded based on their privileged access to information and means of transportation. It is no coincidence that the great department store chains in Japan are affiliated with railroad companies. The two assets were complimentary. Basic economic theory would hold that commoditization is disastrous for corporate profits and the data supports that expectation. Writers John Hagel, John Seely Brown, and Lang Davison (‘The Big Shift’, Harvard Business Review , July-August 2009) document that the return on assets in the USA has fallen by 75% to a nearly ‘risk free rate,’ since the 1960s, exactly what one would expect if people are competing by buying some commodities and selling others. What, then, are an organization’s leaders to do in the face of this gross commoditization of business? The only alternative for gaining competitive advantage is to have better insights and deeper knowledge about what products and services to provide the market, and how to deliver those items with maximum efficiency and effectiveness. Since everyone is trying to copy good ideas as soon as they are evident, the only way to sustain competitive advantage is to generate new, ever better insights and deeper knowledge at a speed and with a determined relentlessness that others cannot match.

THE ONLY ALTERNATIVE FOR GAINING COMPETITIVE ADVANTAGE IS TO HAVE BETTER INSIGHTS AND DEEPER KNOWLEDGE ABOUT WHAT PRODUCTS AND SERVICES TO PROVIDE THE MARKET, AND HOW TO DELIVER THOSE ITEMS WITH MAXIMUM EFFICIENCY AND EFFECTIVENESS

The Toyota Example I have spent many years studying Toyota, certainly the most successful company in its industry and one of the most innovative — early to build affordable and small reliable cars, followed by diversification of its model line, then new brand introduction, Lexus and Scion in the US, global

STEVEN J. SPEAR

People Matters • March 2010 • 15

GLOBAL PERSPECTIVE regionalization, and technological innovation with the Prius. Leaders’ behavior was a marked contrast with what is typical. The conventional model is of senior leaders using information that no one else has, making decisions for which no one else has authority. What to buy and what to sell; whom to hire and whom to fire; what markets to enter and which to exit. At Toyota, the emphasis was less on making decisions and much more on fostering relentless discovery. When I was on a Toyota team and trying to develop a first tier supplier, I was hardly ever told if there was a ‘right’ way to solve a problem. I was constantly prodded with questions. The process I was trying to improve, how did it work? How did I know? What had I seen? What problems did it have? What had I learned about why they occurred? What had I tried, what experiments had I run to get those problems to disappear? When I shadowed Norm Bafunno, responsible for production at Toyota’s Indiana truck plant, a regular part of his daily work was visiting the ongoing process improvement efforts, learning what had been accomplished in terms of improved quality, productivity, and safety, but focusing even more on what had been learned and discovered about the product they made, the process they used, the materials they manipulated, et al. I have been following the career of Bob Dallis, a wildly successful senior manager at a Toyota competitor, who joined Toyota to work for a company investing rather than divesting in North American design and production. His earliest lessons were not about the nuances of ‘lean manufacturing’ tools like value stream maps and pull systems. Rather, he learned the importance of exceptional problem solving skills from shop floor to senior levels and his critical role in developing those skills in others. Other superlative organizations have succeeded through a similar commitment to innovation, and the cultivation of problem solving and innovation skills in others. I write about Alcoa, which achieved near perfect 16 • People Matters • March 2010

IFYOU ARE TO COMPETE SUCCESSFULLY IN A HIGH VELOCITY WORLD, YOU MUST BE HIGH VELOCITY TOO IN MEETING CUSTOMER NEEDS AND IN LEARNING EVER BETTER WAYS TO DO SO workplace safety despite the inherent danger of its heavy industrial processes, and the US Navy’s nuclear propulsion program which had an exceptionally fast ‘time to market’. It took but six years to launch the first nuclear powered warship, despite the challenges of discovering new science, inventing new technology, creating new materials, developing new industries in support and train thousands of people in new specialties and disciplines. The outstanding news is that this commitment to and competency with an innovation-based strategy is not limited to those who have already mastered it. Other companies can do the same if they make a similar commitment to relentlessly learn how to behav e innovatively.

How do you get this hyper innovation started in your own organization? Start by asking yourself, and then those who work for you the following questions:

1. What are the few business 2.

3. 4. 5. 6.

critical processes to which you are most vulnerable? What are their shortcomings in ter ms of safety, quality, cost, responsiveness, yield and the like? What have you tried to solve for those problems? What have you accomplished? What have you learned from trying? What have you developed while doing this?

Ideally, anyone anywhere doing anything can give a detailed and comprehensive answer at a moment’s notice. Don’t worry if you and they cannot right away - most can not. The big difference is whether you make a commitment everyday to gain an ever deeper understanding of how things operate, what their difficulties are, and how to make them better. Here are two promises. One, this is exceptionally hard work. Two, it is exceptionally rewarding. Most people arrive to their jobs knowing that the frustrations they experienced yesterday will be repeated today and again tomorrow, with no end in sight. The lucky few who work in high velocity innovative organizations know that today is likely to be better than yesterday, and that whatever goes amiss today will be the feedstock for insights that will make tomorrow even better. To sum, things have only gotten faster. If you are to compete successfully in a high velocity world, you must be high velocity too in meeting customer needs and in learning ever better ways to do so. Good luck!

Steven Sp ear, author of the award winning and critically acclaimed book, Chasing the Rabbit: How Market Leaders Outdistance the Competition is a senior lecturer at MIT and a Senior Fellow at the Institute for Healthcare Improvement. He is internationally known for his expertise in innovation, operational excellence and organizational learning. His article ‘Fixing Healthcare from the Inside, Toda y’ in 2005 was an HBR McKinsey Award winner and one of his five works to win a Shingo Research Prize.

MANAGING TALENT

YOUNG INDIANS @ WORK

WHAT COLOUR ARE YOUR EMPLOYEES’ COLLARS? The face-off between Jet Airways and its pilots has led to the emergence of a new category of employees, Gold Collar Employees. While shaping organisations of the future, the psyche of these new-age employees will need serious attention, says Dr. R. Krishna Murthy, Head, S.R. Mohan Das & Associates

18 • People Matters • March 2010

MANAGING TALENT

et Airways pilots took again to the skies following a resolution of their conflict late last year. It was a conflict that has perhaps redefined relationships in the aviation industry. To begin with, a strike took place in the private sector and not in the notorious government/ public sector. And most importantly, it was resolved by the parties themselves even though the strike invited contempt proceedings from the Bombay High Court. The pilots had defied orders of the court to return to work and continued to report sick, disrupting air travel. Even though the management sought to press for withdrawal of the case, the court has refused to let go and close the matter. The agitation did focus on one important dimension in employment relationship - the emergence of Gold Collar Employees . The pilots cannot be classified as white collar employees. They are paid several times what traditional office employees get paid. Yet they chose to go on strike to press for their demands. The airline also did not want to talk to the union and sought dismantling of the union as a precondition for talks and fired the activists behind the organization which led the strike. Although the dismissed pilots were taken back, the issues continue to dog the airline. Unionisation is still seen in a primitive manner and this is primarily due to unchanged attitudes and mental make-up of the organizations despite them having changed beyond recognition.

The New-age Employees The emergence of gold collar employees in the IT, ITes and other service industry, as well as the emergence of Pink Collar Employees (women ) into the workforce has been unprecedented in the last decade. Factories that were teeming with blue collar workers, like the Godrej plant at Vikhroli in Mumbai see an army of women working in night shifts. They clearly outnumber the men. Managing these employees is different from the traditional blue collar workers, who were perhaps not as educated or skilled, and left major issues for the union to take up on their behalf with the employer. When doctors, teachers, and pilots take to the streets, or go on strike to protest, it sends out shock waves. It is illogical to demand that they first call off the strike and then seek resolution of their dispute by talks. If talks had succeeded, there would never have been the need for a strike. It is therefore absurd to put a precondition of withdrawal of the strike to commence talks and explore ways and means to resolve the dispute. Predominantly, in the aviation industry, the pilots are the key persons

who have the power to turnaround the organization and without their cooperation, organizational success cannot be guaranteed. In this whole episode, one thing that employers have realized is that the new age employees are quite vociferous in their demands, do not put up with officialdom quietly and speak their minds. Moreover, they have other potential job offers available to them should the employer sever their employment. Even the unions are finding it difficult to measure up to their standards and they do not take to unionism in the same manner like their blue collar brethrens. They question, challenge and even have the audacity to differ and assert themselves. This often makes it difficult for the unions handling their case.

Nurturing Talent Preparing the organization to manage these employees therefore requires a different mindset and focus. The traditional profile of the workforce has changed and getting new young talent into the organization and keeping them motivated is a paramount challenge looming in front of employers. And here, retaining talent and nurturing employees to meet their targets and goals will be the most important dimension of HR. Managing conflicts, both ego as well as functional conflicts, is also an important requirement. The problem in the Indian environment is that our employees are a by-product of div ergent cultures, ethnicity, race, religion and language. Unlike other countries like Japan, Germany, et al, where one language unites the thought process and work place, in India, words have different meanings and getting divergent groups to have the same wavelength and function in unison is a major HR challenge. While individual relationships in most places are managed well, our organizations have still to learn the dynamics when it comes to dealing with groups and collective interaction. Apart from redefining roles at the workplace, where hierarchies and job content need to be drawn to meet the requirements of the workforce, HR has to be innovative and creative to present an organization that will be challenging and a fun place to work. This will help in building employee-skills and at the same time, scale up the competency profile of the existing workforce to meet business needs. The concept of a ‘permanent job’ has all but vanished and individuals who do not measure up to the organization’s requirements find it increasingly difficult to survive. Hierarchies are being slashed and pay packages are significantly higher than what was traditionally

THE NEW AGE EMPLOYEES ARE QUITE VOCIFEROUS IN THEIR DEMANDS, DO NOT PUT UP WITH OFFICIALDOM QUIETLY AND SPEAKTHEIR MINDS VEHEMENTLY

People Matters • March 2010 • 19

MANAGING TALENT

THE LEAD TIME FOR RESPONDING TO POOR PERFORMANCE, MISCONDUCT, INCOMPETENCE WILL BECOME SHORTER AND TOLERANCE LEVELS WILL COME DOWN DRASTICALLY

paid. And yes, the jobs have a higher degree of accountability and deliverables. Several IT and ITes companies have created portals that have an online grievance submission section, where employees get a reply from the CEO or HR within 24 hours. These are mostly on intranet, and co-workers can access and see the response. That speaks a lot for the transparency and speed with which issues are addressed. This is also the reason why the IT/ITes industry has seen such huge growth. With companies such as TCS employing over 1,30,000 employees and Infosys and Wipro with over a lakh employees each, such new techniques are required to ensure employee issues get addressed. Employers of new organizations of the future would therefore do well to heed the lessons that are particularly relevant for the Indian Employee. The following steps will be the key turning points for any organization:

A lot of thought will have to be given to the nature of work in the organization. It will be the prerogative of the employer to build job responsibilities and have scope for growth, progress and challenge. Gender diversity at the workplace will have to be imperatively ensured as many of the workplaces are notoriously designed, oblivious to the needs of the fairer sex. Organizations like banks, insurance and new economy IT and ITes industry will need workplaces that are very attractive and cater to even the personal needs of the employees as employment has shifted from eight hours to 24X7 and workplaces are designed not just for work but meeting the needs of livelihood. While organizations will be more focussed on performance and rewards, pay will be

fixed and variable. The variable will be dependent on the individual’s contributions, bonuses and perks. However, HR policy on pay needs flexibility to factor variations in the market, special skills sets of individuals and unique contributions. The policy also must be transparent and fair across the board. The lead time for responding to poor performance, misconduct, incompetence will become shorter and tolerance levels will come down drastically. It will also lead to a more robust climate of employee awareness and demands, and the employers will be compelled, both legally as well as morally, to deal with more than the ‘traditional workmen constituency’. Dealing with professionals and skilled, or the knowledge workforce will mean more transparency, accountability and c hallenge to the status quo. Ego-conflicts and functional conflicts can co-exist without jeopardising team cohesion and cooperation. Despite differences, searching for common ground and building a commitment to the relationship is more important and that would require grounding of the individuals employed into the core value systems of the organization. While nurturing and developing talent will be the main focus, surgical severances, (particularly when the core values of the company are violated or performance by individuals fails to meet customer and organizational requirements ), will be critical to manage. Events from the recent past show that when it comes to managing complex organizations, we still prefer our primitive and knee jerk responses rather than well thought out and inspiring initiatives. These steps will prove key turning points for the organization.

Dr. R. K rishna Murthy heads S.R. Mohan Das & Associates, a Consultancy firm that specializes in the field of Industrial Relations and Human Resources Management. He advices on routine H.R. matters or legal issues, matters pertaining to compliance under labour laws, legal queries, handling issues of indiscipline, termination of employment, etc.

20 • People Matters • March 2010

COVER STORY

WHERE ARE THE

PEOPLE?

he very suggestion of a talent crunch in a country of a billion people could seem preposterous. Around 20 years ago, the idea of surplus capital and insufficient labour was unthinkable and the idea, even today, is alien to many. Over the last 2 decades, the Indian economy has come up on the back of a solid, educated, white-collared workforce that has catapulted it to the ranks of global economies. Many intellectuals claim it was but inevitable for a nation with a ‘knowledge ethos’ to come of age in today’s information era. After all, belief in the value of knowledge and education has been the bulwark of Indian middle class upbringing and the results of this are apparent to any observer. The IT industry has not just lent voice to a generation of educated Indian families, whose skills were previously under-utilized in the License Raj quagmire of the 1980s. Aided by some astute (and sometimes forced) reforms, it has created a swarming consumer class that has teed off a self-fulfilling prophecy of spending power, consumer demand, investment, capacity building and innovation. The last decade has seen the spawning of industries to meet this demand – financial services, infrastructure, real estate, hospitality, telecom, healthcare, media – the rewards of being part of the knowledge economy are apparent to people and policy-makers alike. The spoils of a good education are lost on few. And yet, there is talk of a huge talent deficit – every CEO, policy pundit, HR head we speak to has a very strong message: It is very hard to find good talent these days. And worse, employability among fresh graduates is very poor.

People Matters • March 2010 • 21

COVER STORY

IS INDIA, THE PEOPLE, FALLING SHORT OF THE REQUIREMENTS OF INDIA, THE ECONOMY? There is a near-consensus on the structural problems plaguing our education system – badly designed curriculum, poor teaching standards and politicallyconnected, myopic businessmen running majority of private educational institutes. People Matters explores to understand what is wrong and what can be done to address this situation. We collect views from industry leaders, educationalists, policy-makers and from research to unravel the reasons and to look for solutions to the talent shortage confronting us.

BY TEJASVI MOHANRAM & ESTER MARTINEZ

ew companies have benefited from the Indian outsourcing revolution as Genpact. What started as a business unit within GE to provide business process services is today a USD 3.5 billion global BPO leader with offices in 16 countries. India is the central hub of the business with more than 70% of the 38,600 employees based out of India. And yet, Pramod Bhasin, CEO of Genpact, is a worried man. “Employability of people coming out of college”, he says, “is a key issue. Most graduates are unable to perform basic functions that you would assume they have been trained for, be it finance-related or business language related. Poor quality of training and bookish curriculum mean that you just cannot rely on the skills coming out of college.” And he is not alone in his concerns. According to a study on the employability of graduates by McKinsey & Company, only 25% of engineering graduates, 15% of finance and accounting professionals and 10% of professionals with any kind of degrees in India, are suitable for working in multinational companies. On the same lines, a Nasscom 2009 report predicts 22 • People Matters • March 2010

a shortage of up to 3.5 million professionals by 2020 in the global sourcing market, which could seriously undermine its 51% share of the industry. As we spoke to a wide array of industry leaders, the concerns are similar. But nowhere more so than in the projected shortfall of trained nongraduate p rofessionals. Says Hari Menon, CEO of IndiaSkills, a vocational training initiative, “A consumption driven economy, growing middle class and huge disposable incomes mean that retail, hospitality & BFSI will be the

fastest growth sectors on the service side, with about 20 million trained manpower need projected in the next five years by the National Skills Development Report 2009.” The same report projects a demand of over 15 million skilled manpower in the construction sector. Specialized sectors such as auto and beauty are projected to need around 5 million skilled resources. Manufacturing is another sector where India has traditionally lagged behind global giants, like China and the requirement here is a staggering

Likely annual revenue loss of

USD150 Billion

by 2020 in the IT & business services markets due to a projected shortfall of 800,000 professionals - Nasscom

COVER STORY 73 million factory workers by 2015, 50% more tha n today. Management talent too is hard to come by here. Says Ajit Rangnekar, Dean of the Indian School of Business “Manufacturing is one of the sectors that I see with increasing worry. As a country we cannot afford to neglect growth in this sector. But still, working in manufacturing is not attractive for students and the challenge is to create a pipeline of talent for this industry. To get MBA students interested in joining these industries is very difficult.” When it comes to technical education in India, the macro numbers look impressive – more than 450,000 technical graduates, 2.5 million ‘other ’ graduates and over 350,000 post graduates every year . Of course, a consistent 8% GDP growth would need a disproportionate increase in workforce as newer industries catering to domestic demand yield lesser than IT/BPO exports in terms of revenue per individual. But clearly, the problem of talent crunch has less to do with quantity than with quality issues and inefficient resource allocation. What then are the underlying reasons for this quality deficit?

The Circle of Mediocrity More than 80% of technical education in India is run by private institutions, hence it is important to look into the causes for an abundance of low quality schools and colleges for courses like engineering, commerce and business studies – most importantly, engineering. All engineering schools are regulated by the All India Council for Technical Education (AICTE), which is vested with statutory powers to organize, plan, and administer technical education in the country. Among other things, AICTE dictates and regulates syllabus, fees and other administrative policies for engineering schools in the country. Typical ‘regulated’ fees for engineering courses range from Rs.30,000 to Rs.80,000 per annum, depending on the state and the course. At the same time, AICTE does not permit the functioning of colleges from rented premises nor does it allow more than 60 students per discipline and multiple ‘shifts’ per day. The relatively low fees by global standards and added restrictions mean entrepreneurs cannot afford to buy

AN OPPORTUNITY OF UP TO USD 150 BILLION COULD BE AT RISK IN 2020

* Estimates based on talent supply/infrastructure/macroeconomic constraints and other adoption factors. Talent assuming employability, willingness and productivit y improvements Source: McKinsey analysis

land at market prices for setting up schools nor can they afford to pay teachers market rates for salaries. From hereon a vicious circle of mediocrity takes ov er. As a result of the suffocating restrictions, private education is mostly run by educational trusts or societies, which are entitled to benefits from the state such as land at concessionary rates and tax exemptions, due to their not-for-profit status. The regulatory framework presents a number of procedural hurdles. Approvals are needed from the univ ersity, the state government and regulatory bodies like the AICTE. This ‘educational bureaucracy’ can typically be negotiated only with political influence, as is reflected in the large number of politicians associated with or promoting educational trusts in the southern states and in Maharashtra. Establishing a private university requires an Act of the state legislature and is therefore impossible without strong political connections.

A candid Sanjeev Bikhchandani, CEO of Info Edge explains, “The problem is that to run an education institution you got to be a non profit organization. The government will give you cheap land. But the moment you say the land is below market prices then its supply is restricted. And therefore it goes to people who have access to power like politicians, bureaucrats and a few other influential people. They are not necessarily in it because they are committed to education or they are great educationists. They are in it either to dispense patronage or to run a business where they can make profit. They don’t have the competence in education. Also, because the government gives cheap land, it says that we will influence fees. If the government fixes my revenue, I will work backwards and ask how to profit under the given constraint. Hence, schools pay poorly to teachers, develop poor talent and don’t invest enough back in their infrastructure. Private sector higher education, barring a few notable

THE SEVERE ‘EDUCATIONAL BUREAUCRACY’ CAN TYPICALLY BE NEGOTIATED ONLY WITH POLITICAL INFLUENCE, AS IS REFLECTED IN THE LARGE NUMBER OF POLITICIANS ASSOCIATED WITH OR PROMOTING EDUCATIONAL TRUSTS People Matters • March 2010 • 23

COVER STORY

“

Private Sector Higher Education is stuck in a Vicious Circle of Mediocrity

”

Sanjeev Bikhchandani, CEO, Info Edge India (Naukri.com) Do you see a demand-supply mismatch with respect to talent in the Indian context across industries? There are some emerging sectors which have never existed before in India like biotech or clinical research; this whole area of life sciences where India wants to make a thrust. We do not have enough capacity in our educational institutions and furthermore the capacity we have is not of the desired quality. Neither there is a large industry for which you can hire as lateral positions. In term of industries that are consolidated, whether IT, BPO, manufacturing or other services. Here, even the capacity of talent we are producing cannot sustain 9 to 10 % of growth in the economy for more than 3 years. At the end of three years of 9% growth, companies were finding their salary cost sky rocketing, with insufficient people and if we would have continued like that, the talent shortage itself would have become a constraint for growth. Now, since there has been a downturn for 2 years, there is sufficient talent available as recovery happens for next two years. The problem of talent shortage will continue if the growth of the economy continues for 5 years at a growing rate of at 9%.

What about the quality of talent? This takes me to the education system in India. Let me focus on higher education and vocational education. The vocational education is a huge opportunity and huge gap area and the Government of India plans to spend thousands of crores over the next 20 years to do large scale skilling of about 100 million Indian people. If they execute the problem well, it will make a big difference.

24 • People Matters • March 2010

As far as the higher education is concerned like post school you have the state subsidized universities and colleges who typically do not respond to market needs quick enough. They take a long time and then there syllabuses do not evolve quickly. They are not scalable because they are charging fees way below the cost. And whenever they try to scale, it requires a lot of government funding. On the private sector, higher education system has different problems. The problem is that to run an education institution or college you got to be a non profit organization. The government will give you cheap land. But the moment you say the land is below market prices then land is restricted, its supply is restricted. And therefore it goes to people, who have access to power structure like politicians, bureaucrats and a few other influential people. They are not necessarily in it because they are committed to education or they are great educationist. They are in it either to dispense patronage or to run a business where they can make profit. Also, because of the government gives cheap land, then it says that we would influence fees. If the government influences the fees it means they are fixing the revenues, if you fix the revenue, those institutions will work backwards to ensure their profitability; this results in low investment in teachers and lab facilities. So private sector higher education barring a few notable exceptions like ISB is stuck in what I would call a vicious circle of mediocrity. So, if you want more of your engineers to be employable you will have to go beyond the regulatory reform where the private higher education institutions need to be brought out of this vicious circle of mediocrity. Where the public higher education needs to modernized, upgraded and be left to our credit. And overall capacity of good quality needs to be expanded.

COVER STORY exceptions, is stuck in what I would call a Vicious Circle of Mediocrity. We will give cheap land to friends who are not great educationists, who will then go out and build mediocre institutions for education. We will in turn control their fees; they will attract low quality teachers, pay them less and deliver poor courses. Hence it comes as no great surprise that only 15 to 25% of India’s engineers are employable.” The picture that emerges is depressing - mushrooming private institutions, strong on political connections but low on educational quality, that demand payouts from students in the form of cash; a regulatory environment with many controls but unable to assure quality of education or equity of access; regulatory organi zations whose very integrity is under question; and lastly, a Government content on taking credit for increasing enrolment and associated statistics. Kapu and Mehta (Center for International Development, Harvard University) have highlighted this in their research “Indian Higher Education Reform: From Half-Baked Socialism to HalfBaked Capitalism ”, that despite legal prohibitions on profit, growth of private engineering colleges is simply an artefact of politicians creating opportunities to collect rents. That is, private engineering colleges are orga-

Current annual training capacity of

3 Million 83 Million

vs total skilled manpower demand of

by 2015 - National Skills Development Commission nized and administered for profits in spite of legal prohibitions.

Outdated, Bookish Curriculum Another common criticism of the education system is an outdated curriculum and massive bureaucracy around the setting of curriculum. Says Pramod Bhasin “Students land in courses like commerce and accounting with absolutely no idea of how the world works, are then taught subjects in a purely theoretical setting with very little practical exposure and end up in jobs a few years later, lacking basic understanding of concepts.” Emphasizing this is Dr. Uday Salunkhe, Group Director, Welingkar

Manpower Talent Shortage Survey 2009 DIFFICULTY FILLING POSITIONS

Education, “In my view, what business schools and corporates need to do is decide on the practical skills which any student need to have before he/she joins the industry and emphasize on the practical exposure more than the theoretical approach of getting more marks. This exposure can be made mandatory as part of the curriculum.” Also, retooling teachers is as essential as reworking the curriculum. Bala Balachandran, J.L. Kellogg Distinguished Professor of Accounting and Information Management, is an outspoken critic of the lethargy in the teaching domain. “Curriculum and courses designed in the 1990's (and earlier) are still being taught in many colleges. There are many teachers who learnt their material in the previous century and have not gone for any refresher courses or updated programs and are teaching off the same notes. Thanks to the Internet, there is world class curriculum available online and faculty should be given facilities to be retooled…Get the teachers current and the students will be current.”

Growth…Here and Now!

* 1555 employers responded in India

Note the dramatic reduction in difficulty in severely recession hit countries like the US, UK and Spain while the difficulty has gone up in India in 2009

The massive growth and diversification opportunities in new sectors is also creating a dangerous trend of companies building capabilities by poaching teams en-masse from established competitors as opposed to putting in the effort and investment in building a talent pool, thus enhancing the preparedness of the entire industry. Says S. Padmanabhan, Executive Director (Operations), Tata Power , “Every company should invest in training people. This is of course an addiPeople Matters • March 2010 • 25

COVER STORY

Engaging Industry and Students to Work Together Ajit Rangnekar, Dean, Indian School of Business What is your view on Industry-Academia gap both at the graduate and at the post-graduate level? There is a gap of talent in terms of employability. The main problem is not shortage of institutions but the dearth of quality. Industry should take an active stand to be part of the solution. We have seen many companies take active steps in building employability of their new joinees by creating a training program that starts before the employee joins the company.

What structural changes are needed at the MBA level for students to have a better industry orientation? Industry needs to take ownership of the talent being employable. At ISB, we make intense effort to bring the industry to our students in a meaningful way that goes beyond just inviting them as faculty but also engaging industry and students to work together in projects. This industry interaction needs to happen as part of the program and should engage people at different levels across functions.

ISB’s Mohali campus is an interesting shift away from the generalist approach to management. Do you think this approach can be broadened to undergraduate levels as well? The Mohali campus aims to bring greater specialization to MBA in different growth verticals. This specialization

tional cost of investment. The regulatory system should recognize the efforts of training people and enhancing capabilities for the industry instead of companies poaching people, as investing in training people increases the overall talent pool for the industry and creates sustainable growth. The regulatory body should address this b y incentiviz ing companies to invest, through the tax system where investments in building capabilities or skills are exempt from taxes.” Even established and consolidated 26 • People Matters • March 2010

does not make sense at undergraduate levels. School and college should be generalist and provide an exposure that then creates the interest for specialization.

What is your view on industry consortiums running sector-specific schools on a symbiotic-competitive basis? The success of industry consortiums depends on the objectives and expectations from the parties. If Industry gets into consortiums trying to get talent for their industry in the short run it will not work. Industry need to be donors and not owners of academia, they need to look at their investment with a long term view and leave the academia to run and administer.

Do you see a need for more collaboration between industry and universities in grooming talent together? This collaboration is required. Education does not have the capacity by itself and there has to be a combination of companies and academia working together to develop and groom internal talent. ISB collaborates with many companies in helping in creating their development curriculums, assessing their impact and sometimes delivering the programs. Programs like PGPMax (PGP for Senior Executives) also help in creating that exposure while working as a full time employee.

industries run the risk of losing people when there is a talent crunch in other industries. P. Dwarakanath, Director Group Human Capital, Max India, elaborates, “In the early part of this decade there was a sudden and massive demand for professionals in telecom and hospitality. Barring professionals from Government companies in the case of telecom, there were very few experienced people eligible for sales, marketing and even general management positions in these industries. So, companies started poaching

from the best available talent pool for such functions – FMCG companies like Hindustan Unilever, P&G, Colgate Palmolive”.

Solutions Galore From the discussion above, some of the solutions seem obvious. The most important one would be to free technical institutions and colleges from the constraints and strictures they face and let market forces dominate the education segment, including salaries of teachers and professors.

COVER STORY However, this has to be accompanied by a meaningful regulatory framework wherein accreditation by government agencies actually signals quality to prospective students. Also the accreditation guidelines need to be re-worked periodically to ensure aged and irrelevant guidelines are weeded out. It is indeed ironic that as per current NBA (National Bureau of Accreditation) guidelines for assessment of faculty, a senior industry professional with 20 years of experience and an undergraduate degree would score lesser number of “accreditation points” than a fresh postgraduate degree holder. Obviously, introducing market forces in a socially relevant and highly sensitive domain like education could lead to fees spiralling out of the reach of many families. It is here that a carefully thought-out policy becomes important. For instance, reducing the confusing number of ‘Common Entrance Tests’ and creating a transparent procedure for disbursement of government scholarships could go a long way in ensuring access to quality education. Also, India has a strong system for disbursement of education loans through public sector banks, with roughly INR 20,000 crore budgeted per annum. However, fact remains that most of these loans are granted for professional courses (MBAs) and overall, less than 3% of Indian students fund their studies using student loans as opposed to more than 75% in countries like the US and UK. Private banks perceive more risks for educational loans with respect to repayment and collections. (It is not unsurprising to see the names of some prominent business leaders on the defaulters list in the post offices of

Shortage of 500,000 Doctors, 1 million Nurses and

80%

shortfall

in Doctoral and Post-Doctoral Scientists - FICCI

premier institutes in the country!) An effective operational mechanism could involve banks, schools and companies whereby loan repayments are deducted from salaries and employees with student loans can be ‘tracked’ as they move companies. This could help in reducing risks for banks and ensuring a smooth flow of funds for education, thus mitigating the ugly after-effects of a price rise for private education in a market regime.

Glass Half Full… Obviously there is a bright side to the whole story. The demand for quality workforce – sales people, general managers, trained professionals, agents, workmen in sectors like financial services, hospitality, retailing, construction has thrown open a host of business opportunities for pragmatic entrepreneurs. The most promising and obvious one is the area of vocational training – for a host of skills that were previously in the unorganized domain. From English language training to retail and hospitality executives to professionals in insurance, nursing and

AN EFFECTIVE MECHANISM FOR LOANS COULD INVOLVE BANKS, SCHOOLS AND COMPANIES WHEREBY LOAN REPAYMENTS ARE DEDUCTED FROM SALARIES AND EMPLOYEES WITH STUDENT LOANS CAN BE ‘TRACKED’ AS THEY MOVE COMPANIES

beauty, workmen for construction, there is a vast opportunity for dedicated training centres that can establish scale across Tier-I and Tier-II cities and across disciplines. To this extent, the NSDC (National Skills Development Corporation), a Public-Private Partnership (PPP) Enterprise launched last year, is intended to foster private sector industries to encourage skill training in 21 high growth sectors and has been mandated to skill 150 million people by the year 2022. Besides the Ministry of Finance, many prominent industry bodies have contributed to the initial INR 1000 crore capital of this 51:49 venture between the private sector and the government, with a targeted corpus of INR 15,000 crore over the coming years. A ‘market mechanism’ for bypassing shoddy institutional accreditation procedures is the evolution of credible online platforms that provide information on educational institutes, their quality, previous employment record and a parallel ranking mechanism based on in-house research and meaningful surveys. Such platforms could go some way in providing transparency, which could reduce (what economists term as) adverse selection failure and lead to low quality institutions being ‘priced out’ of the market. Also, a growing number of new quality institutes are beginning to bypass the AICTE altogether and can thus aim to provide world-class education in an Indian setting at a higher price. The parallel evolution of serious educationalists and thought leadPeople Matters • March 2010 • 27

COVER STORY

Focus on

fundamentals in school & training in the workplace S. Padmanabhan, Executive Director (Operations), Tata Power The Central Electricity Authority anticipates the need for 8 lakh people to keep the sectorâ&#x20AC;&#x2122;s growth engine running over the next decade. Do you see a demand-supply mismatch with respect to talent in your industry? I think the demand/supply shortage in India is not in terms of quantity; the main problem is the ability to channelize this talent to the right sector for their skills and competencies and to build the capabilities that will make them apt for the job. The problem is to develop the functional competency required to deliver a job. I do not think that education can provide that level of functional competency. The role of education is to build the fundamentals, encourage the ability to learn new concepts and the exposure to practical orientation. In the technical field, there is a gap between engineering and job aptitude or readiness. This gap needs to be filled outside the colleges either internally by creating internal training and on the job training programs or it can also be institutionalized in the form of special courses to obtain those functional competencies.

From the 3 main competencies required for your business, Construction Management, Project Management and Operation and Maintenance, which are the ones that have been getting more scarce over ? The real challenge comes in building skills that as an industry we are weak on in India. The absorption and training of new requirements or technologies is the challenge. Firstly, there are new skills required by international standards. For example safety standards in the power industry in India are below the international standards as there is no talent available in India

28 â&#x20AC;˘ People Matters â&#x20AC;˘ March 2010

trained at those standards. Secondly, as we move forward, more and more plants will be based on super critical technologies, based on a highly complex technology. These plants function differently and today to develop those skills, we need to send our people to the equipment manufacturers in Germany, Japan etc. This is an expensive proposition.

What could companies/industry consortiums do to address any issues related to talent shortage? Every company should invest in training people. This is, of course, an additional cost of investment. The regulatory system should recognize the efforts of training people and enhancing capabilities for the industry instead of companies poaching people, as investing in training people increases the overall talent pool for the industry and creates sustainable growth. The regulatory body should address this to incentivize companies to invest, through the tax system where investments in building capabilities or skills is exempt from taxes. In terms of the education system, for science and engineering streams, colleges should only focus on building the fundamentals. The education system cannot change their platform every 5 years to cater to new technologies. What they should improve is the quality of fundamentals. The way to achieve that is to improve the quality of teachers and faculty by increasing their pay rates to be on par with industry standards The regulatory body should also look at creating incentives for universities to do that to increase the base of education. This should be complemented with other models like fewer students per class ratios and greater investment in building practical capabilities.

COVER STORY ers in taking such bold steps and of internet entrepreneurs in setting up platforms that can disseminate credible information at relatively low costs, could together provide enough impetus for a parallel education system, high on quality and with freedom to adopt to market demands of education. Another interesting approach to address skills gap is to work with temporary staffing solutions. Though it is not a new phenomenon globally, it is a relatively new concept in India and with more and more MNCs starting operations, the trend is growing rapidly. Temporary staffing brings with it advantages of scale, ‘outsourced training’ and of candidates trained in successfully executing specific functions. An upbeat Manish Sabharwal, co-founder of India’s largest staffing solutions company, TeamLease Services, elaborates “It is important to remember that there is no business model right now for employers to manufacture their own employees. More than 60% of our employees have gone onto permanent jobs within a year with the improved employability that comes with experience.” Over the last decade, an increasing number of companies have also begun to work closely with educational institutions in curriculum development, industry-student interaction sessions and in some cases, funding for infrastructure and research. As Dr. Ritu Anand, VP & Deputy Head, Global HR, at IT giant TCS says “We work closely with institutes from where we recruit to conduct student development programs and faculty development workshops. This helps us align education with industry needs and enhance the suitability of the talent pool.” Aquil Busrai, Executive Director Human Resources, IBM, took us through the entire gamut of IBM’s collaboration with schools and colleges. The company today provides mentoring, consulting, financial and technological assistance to a wide range of educational institutions across the country — ranging from small municipal schools to premier institutes like the IITs. In the end, however, no solution would work to its fullest potential without the active involvement of the gov-

Building on Innovation & Practical Exposure

Key for Employability Prof. Dr. Uday Salunkhe, Group Director, Welingkar Education What are the key issues in terms of quality of talent in the postgraduate level? There are more than 3000 business schools in India, but quality is available only from the top 100 schools. The rest are not able to provide the required level of quality due to lack of a vision community comprising of the board of governors, institutional Leadership, good faculty, industry exposure and interface, teaching learning process among others. In your opinion, where will we see maximum talent shortage in the coming years? The maximum talent shortage in the coming years would be sectors/verticals such as ebusiness, Retail, healthcare, BFSI, Agribusiness, Education, Infrastructure KPO, Travel and Tourism, NGO / Social Sector, Media and Entertainment etc. Business schools will need to design curriculum to develop talent in these sectors.

ernment. Companies can help alleviate some of the problems by increasing spending on training and working more closely with schools. But when it comes to adding 50 million more quality people to the workforce, the results of these well-intentioned, but disparate efforts will just not add up. There is hope based on renewed vigour with which the new HRD Ministry has gone about attending to some of the major systemic and structural

What can be done to improve the quality of majority of students joining the workforce? Business schools and corporate need to decide on the practical skills which any student need to have before he/she joins the industry and emphasize on the practical exposure more than the theoretical approach of getting more marks. This exposure can be made mandatory as part of curriculum. Emphasis needs to be laid on developing one’s ability to think independently with a 360 degrees approach, interpret & correlate the happenings in the environment and in turn foresee its impact. This will result in developing a creative mindset with an ability to learn, unlearn and relearn and thereby foster innovation. Innovation driven practices and teaching learning process apart from the infrastructure will aid better learning. I also visualize that the course structure and pedagogy will have to increase focus on character building, transformational leadership and to generate managers with a vision rooted in Indian values and having global perspective.

problems facing us in higher technical education. Unless this surge in activity leads to concrete policies that break from the current bureaucratic and policy mess, the Indian economy stands to lose hundreds of billions in terms of GDP and much more in terms of social costs as a result of this massive talent crunch that we face. Institutional apathy, it seems, is all that stands between the people of India and their true potential. People Matters • March 2010 • 29

COVER STORY

Deregulate and

Enhance Credibility of Institutions Pramod Bhasin, President & CEO, Genpact How do you see the talent availability in the BPO industry and specifically for Genpact? For a company that is looking to add 9 to 10 thousand people this year, employability of people coming out of college is a key issue. Most graduates are unable to perform basic functions that you would assume they have been trained for, be it finance-related or business language related. Poor quality of training and bookish curriculum mean that you just cannot rely on the skills coming out of college, and hence in-house training is at the core of our business strategy.

If so, what is the root cause of this mismatch? Most colleges, including some of the finest in the country, provide what I would call ‘bookish education’. Students land in courses like commerce and accounting with absolutely no idea of how the world works, are then taught subjects in a purely theoretical setting with very little practical exposure and end a up in jobs a few years later lacking basic understanding of concepts. At the end of the day, colleges have become just an instrument for talent filtration – based on reputation and marks.

What could companies/industry consortiums do to address any issues related to talent shortage? There is a whole host of IT and BPO companies (including Genpact) who are working with schools in improving curriculum and even providing monetary grants for capacity building. However, there isn’t sufficient accountability in the system for industry to dole out large grants…also the scale of the problem is beyond the disparate efforts of a few

30 • People Matters • March 2010

“

At the end of the day, colleges have become just an instrument for talent filtration – based on reputation and marks

”

corporates. Ultimately, we cannot solve this without active interventions from government and public institutions.

What do you see as practical solutions to this problem? For a start, we need to create an environment where teachers are paid better. I have sat on the boards of colleges and there is loads of financial regulation on colleges that make it unviable for them to pay their teachers better. Also, regulatory strictures need to be eased to allow corporates and retired professionals to teach in colleges. A fair amount of deregulation is needed in higher education that will encourage public-private partnership. There is enough research out there on the various models through which this can be incorporated. Its time the powers-that-be picked a model and went ahead to creating a scalable solution. Finally, not everybody needs to go to college. There is huge opportunity in the skilled workman sphere and its time we studied examples like that of Germany, with its dual education system and emphasis on apprenticeships, to ensure efficient allocation of talent.

COVER STORY SKILLS SPECIAL

Bridging the Skills Gap Education vs Skills Debate There is an urgent need to redefine the role of institutions; otherwise we will continue to see poor quality talent output as well as a drain on investment

BY DR. UMA GANESH

ver the last decade, we have added 100 universities, 15000 professional colleges and 100,000 additional seats in higher education. However, the employability of the students overall is very low, particularly those coming out of professional programmes is a matter of concern. According to NASSCOM-Mckinsey Report 2009, the percentage of freshers who are employable by the industry is just around 30%. This trend continues to be such over the last 5 years. What are the inferences we are gaining from this trend: • The industry is spending a huge amount of time and money in repair and rework of talent in order to make them productive in their organizations • The understanding of educational institutions about the industry requirements is sketchy • The expectations of the industry and exposure to various career options based on students’ potential is low amongst the student community • Teaching competencies and access to right content/curriculum frameworks have to improve substantially • There have to be closer linkages between corporates and educational institutions and innovative education models to meet the requirements of the industry

Educational Institutes

Industry

Provides Degree but Lack skills

Spend money for repair & rework of talent

Sketchy understanding of requirements

Skill deprived

Low student potential

High expectations by the Industry

No link with Corporate/Industry requirements

Students do not satisfy the expectations

How do we overcome the challenges of skills gap? Firstly, it is unreasonable to expect educational institutions to deliver on the skills requirements. ‘Education’ should lead to strong conceptual clarity and provide a framework for developing the individual in a holistic manner. Whereas ‘skills’ relate to the specific requirements of the role expected to be performed. Education could be a pre-requisite for this to develop the individual such that he/she is capable of learning appropriate skills as required to make him/her employable. What this means is that

universities and colleges should focus on providing excellent foundation for education and leave the responsibility of ‘skilling’ to employers or other intermediate agencies specialized in this activity. In this era of specialization and focus, clear expectation setting and delivering on the respective promises are extremely important to build a quality talent pool for the country. It has been assumed that creation of new universities and colleges aimed at professional education would automatically lead to employability. Unfortunately that has not been the reality and many new colleges set up

PRIVATE-PUBLIC COLLABORATION WITH PREDEFINED END GOALS AND COMMITMENT OF MINIMUM FINANCIAL RETURNS WOULD ATTRACT SEVERAL PRIVATE SECTOR ORGANIZATIONS TO PARTICIPATE IN LARGER NUMBERS People Matters • March 2010 • 31

COVER STORY in the recent past without a clear strategy for sound educational processes have experienced challenges in placement translating to meager student enrolments in subsequent years. Some of the institutions established in the past have had the natural advantage of attracting quality talent who are also the target for the corporate sector leading to the mutual match. However there is an urgent need to redefine the roles and expectations of institutions other wise we would continue to see poor quality talent output as well as a drain on the investment and resources committed to the educational institutions. There is also a dire need to rethink the educational framework existing in the country and developing bold strategies for qualifications commensurate with expected outcomes. For instance, instead of creating more seats in En-

meet the business demands at hand have been able to think and act mostly from the short term perspective. While this is certainly important and is quite an obvious need for business survival, long term strategy is equally important to bring down the costs and also to ensure relevant talent pool is available in a sustainable mode. Hence active engagements with the educational institutions and participation in debates on the educational reforms required to develop the talent pool for the nation would be critical. The successful ‘German Dual Model’ which has propelled Germany into the top slot for highly skilled human resources should be emulated by India. By committing to this model of enabling students to ‘learn and practice’ in a systematically fashioned program, corporates would benefit a

IN A NUTSHELL,SKILLS TRANSFORMATION INITIATIVE SHOULD BE PURSUED WITH A HOLISTIC APPROACH THAT WOULD ENABLE THE ECOSYSTEMTO BE DEVELOPED TO CREATE A SUSTAINABLE EMPLOYMENT POTENTIAL gineering and IT colleges with students not being found fit for employment, we should consider new learning paths after school education that would lead to skilling and commensurate qualifications from new models of educational entities. These qualifications together with the work experience should be credit bearing and translate into formal university level qualifications over a period of time. This kind of approach would not only set the expectations right with all concerned but would also provide the necessary balance in the talent ecosystem. The Associate Degree framework developed by IGNOU for community colleges is a good example for this. Corporates who are engulfed with the immediate priority to scale and meet the requirements for talent to 32 • People Matters • March 2010

great deal by actively embracing this model and which would lead to unique possibilities for talent acquisition and business development.

Differentiated Skill Development Strategy Requirements of skills in the organized and unorganized sectors and skill development initiatives in the rural and urban locations call for different approaches. There should be a special dispensation for encouraging private sector investment particularly in skill development in the rural areas. Often times there is impetus for training in areas where immediate shortage is envisaged or absence of skills is experienced leaving out those areas which if triggered, could lead to creation of whole new economic possibilities. The case in point is the

unique technology skills required in giving a new lease of life to areas such as arts and crafts which could lead to a whole new business opportunity by itself. A separate fund should be created to support such initiatives which may have long gestation periods for returns but in the long run would help in reengineering the business model for such professions and help nurture entrepreneurship in a successful manner.

Integrated Approach for Skill Development While individual attention to the various related dimensions of employment generation is necessary, in order to bring about the real transformation, an integrated approach to skills transformation needs to be adopted involving multiple agencies engaged with talent assessment, development and certification. Current private-public collaborative models have had limited successes with respect to adopting it is. Private-public collaboration with predefined end goals and commitment of minimum financial returns would attract several private sector organizations to participate in larger numbers. Just as the Chinese model that propelled the country to become the world capital for manufacturing, at every district, the integrated model should also include deployment of such talent in small and medium scale ventures to be set up with funding support, thereby ensuring minimal migration of labour in search of jobs to the cities. In order to deliver ‘quality with scale’ in the shortest possible time, investments in technology is a must and provisions should be made to subsidise such efforts with the view to own/part own intellectual property developed and deliver large scale talent development programmes. In a nutshell, Skills Transformation initiative should be pursued with a holistic approach that would enable the eco system to be developed to create a sustainable employment potential. Dr.Uma Ganesh, CEO, Global TalentTrack Ltd., umaganesh@gttconnect.com

COVER STORY SKILLS SPECIAL

Promoting a Work-centric

Learning Model People Matters talks to Hari Menon, CEO of IndiaSkills, a joint venture between Manipal Education and City & Guilds

What is the size of the market in the non-graduate professional education space?

& BFSI will be the fastest growth sectors on the service side, with about 20 million trained manpower need projected in the next five years by the National Skills Development Report 2009. The same report projects a demand of over 15 million skilled manpower in Construction. Specialized sectors such as Auto and Hair & Beauty are projected to need around 5 million skilled resources. With existing education streams not catering to this or being sub-optimal in terms of both quality and quantity, the biggest demand- supply mismatch will be seen here.

You will be surprised to know that around 8 million youth drop or opt out the education funnel between Class X and graduation every year, in urban India alone. That is the incremental size of the youth market to be catered to in the non-graduate education space every y ear. A significant bulk of this group ends up underemployed or unemployed. Those who enter the workforce lack relevant skills because of the education mismatch and lack of quality skills training options. Industry on the other hand faces a huge demand of skilled manpower at entry level. The shortage is across almost all sectors given the nature of economic growth and the increasing standards of quality and technology that industry needs to adopt. Both new economy sectors and older brick & mortar sectors face challenges both in numbers and quality.

The National Skills Development Commission indicates that against a total skilled manpower demand of 83 Million by 2015, the current training capacity is 3 Million! Since most of this in terms of numbers is in the non-graduate professional space you can see how big the gap really is!

Can you explain the business model of IndiaSkills and the sectors to which it caters?

What do you think are the key reasons for this huge manpower shortage build-up in India?

IndiaSkills is all about meeting industry demands for skilled manpower through world class skills training programs centered on workplace needs. The City&Guilds qualification portfolio and more importantly the process knowhow on developing qualifications in a manner relevant to industry and learners in India is one pillar of our business model. We will merge this with the capability that we have access to from Manipal Education, in delivering distributed education. What you will have is a national footprint of learning centres that can deliver a wide range of industry and job specific qualifications to learners and assess them against benchmark IndiaSkills certification standards for proficiency. I would like to clarify that we donâ&#x20AC;&#x2122;t necessarily see our market as non-graduate professional education. It is more about work centric qualifications that traditional education may not offer adequately.

The reasons are manifold. Outdated learning programs with no relevance to industry needs, absence of industry experts in content creation or validation, significant shortage of quality trainers, lack of training standards among existing training entities are some primary reasons for this shortage.

Where do you see the biggest demand-supply mismatch for non-graduate trained personnel over the coming 5 years? A consumption driven economy, growing middle class and huge disposable incomes mean that retail, hospitality

How big is the talent shortage in India in terms of trained non-graduate professionals?

What are the key aspects that Government, Industry and Educational institutes can do together to address this demand-supply? Quality vocational skills education and training is the need of the hour. For achieving the same, I see government as the driver, industry as an enabler and skills training entities as the facilitators of this change. Government has a key role in the entire value chain from policy development and developing a vocational education framework and in making skills education funding simpler for the needy. Industry, by participating in content development, validating programs and preferentially rewarding learners who invest in their own skills. Educational institutes can be important players in partnering delivery of the best programs to their learners. People Matters â&#x20AC;˘ March 2010 â&#x20AC;˘ 33

People Matters • March 2010 • 35

MANAGING TALENT

Retention Through

succession planning Retention and Succession Planning are paramount for companies which otherwise run the risk of losing great talent

BY RAJESH RAI

while back, I came across an interest ing quote by Cynthis Guest, from PMP - “If your unit is always running in crisis mode, only surviving on the heroic efforts of great staff, then you know you are in trouble.” This sets the stage for the need to plan succession proactively. I also came across something very pertinent from the Centre for Creative Leadership that said Leadership Development = V+C+L = Variety of Experiences + Challenging Assignments + Ability & willingness to Learn. This tells us how tough succession planning can be. I am adding yet another dimension to the above: Succession Planning = Retention + Great Employee Engagement. Many years back, Management Expert Peter Drucker had said “The final test of greatness in a CEO is how well he chooses a successor and whether he can step aside and let his successor run the company.” Well, it’s not just about CEOs, but about all People Managers within an organiza36 • People Matters • March 2010

tion - following a process that ensures the continuation of a business through the generations is what is required and that is what good succession is all about. In my career, the three most important and yet most difficult areas that I have found in organizations have been manpower planning (optimum manpower for each job/role), retention and succession planning. Here I will speak more of succession planning and how it relates to retention. These two subjects are certainly related, because you can plan for succession only when you retain your best talent. It’s precariously dangerous if not anything else, for organizations that do not focus on both these aspects as they run the risk of losing great talent otherwise. Succession planning is in fact retention of institutional knowledge focusing on the critical positions where knowledge loss is the greatest threat. It is about identifying and prioritizing the specific knowledge and skills at risk. What makes both these subjects so difficult to manage is the multiplicity of factors that influence them. Not

RAJESH RAI

being with an employer could have a thousand explanations and so does staying with an employer for long. Retention is so personal a subject that it varies all the way from one employee to another. While for some it may be about compensation, for others it may be work-life balance, their immediate manager, the brand value of the em-

MANAGING TALENT ployer... the list goes on. The reasons for being with an employer may be as diverse and close to heart such as how much the organization really delves into Corporate Social Responsibility. Yet Succession remains one of the most potent tools to boost retention. As stated earlier, I find Succession Planning a tough operation because one needs to define and work on a multiplicity of factors, some of them being: • Finding the right leaders does matter … in managing/driving accountability, results, culture. After all, it’s the next inflection point (like Jim Collin’s Good to Great) that one is really looking at with each leader, be it at the CEO level or any other level in the organization; • Maintaining that performance is what counts … top performers over high potentials (the “what” & “how” both count). Its tough to retain one and let the other go; • Recognizing that today’s top performing leaders aren’t necessarily tomorrow’s … even our best leaders can fall behind or derail, making current succession planning sometimes more complex; • Establishing Talent as an enterprise resource … willingness to share talent makes the system work. Talent cannot be restrictive! • Focusing on a broad set of experience & assignments is the best classroom … yet a balanced approach is still necessary for development & then succession; • Ensuring that its incumbent upon today’s “top-100” to leave a legacy of future talent … current leaders must teach, mentor, & role model others on what it takes to succeed; • Investing in the best... Do not waste time on talent that cannot be developed. Do not hire them in the first place. The multiplicity of factors calls for steps to make the exercise of succession planning a success. I have outlined some of these below for reference: We must know our assessment of key positions: this means we must know

SUCCESSION PLANNING IS IN FACT RETENTION OF INSTITUTIONAL KNOWLEDGE FOCUSING ON THE CRITICAL POSITIONS WHERE KNOWLEDGE LOSS IS THE GREATEST THREAT what are the competencies and experience needed to qualify for each key position? We must identify our Key Talent: Typically people at the top two levels of the organization/department and high potential employees one lev el below. This is usually identified by their management’s assessment of their performance and potential for advancement. We must carry out assessment of our key talent: For each person on the radar screen, primary development needs are identified focusing on what they need in order to be ready for the next level. Take the assistance of Development Plans: A development plan is prepared for how to help the person develop ov er the next year. Focus on Development, Monitoring & Review: An annual or semi-annual succession planning review must be held to review progress of key talent and to revise their development plan.

Whenever focusing on succession, the highest returns would come from... • Full job change focused on development needs • Job restructuring based on development needs • Mini P&L assignments • Cross divisional project leadership or assignment • Focused coaching & counseling • Customer visits accompanying senior executives

Initiatives such as Formalized Education Programs, 360 Degree Feedback & Evaluation do help as well. Each of the steps above are baby steps towards developing concrete, actionable responses to ensure that there is proactive prevention of loss of key skills through retention. Each baby step is a huge exercise that must necessarily be undertaken by any organization that does not want to lose its key talent to competition. All the above steps would not happen without big hurdles. These are time consuming with NO immediate results, huge resistance from existing managers sometimes as they may feel threatened (what would assessment throw open!), politically dynamic (and sometimes leading to instability as well), immediate exits after looking at the development/succession plan etc. At the end of the day, there is a limited talent pool of great employees, leaders/potential leaders want to work for quality organizations and want an opportunity to identify and groom themselves as potential leaders for advancement. All the steps outlined while implementing a succession planning exercise lead to answering pertinent questions about an employee’s career. By assessing the incumbent in his/her role and taking decisions on the future potential, one is transitioning from a grey area surrounding the how’s and why’s of the employee’s career to something that is more black and white and concrete. Which employee therefore doesn’t w ant to stay in such an environment? This holds good more so for top talent that anyways wants to aggressively follow career plans to not only dream but also achieve big! Rajesh Rai is the HR Director of Benetton India

People Matters • March 2010 • 37

LEAD SPEAK

Consolidation Before the next level of

Growth

Companies have strong plans for growth but are concentrating on building the capability to execute them, says Smita Anand, Asia Pacific Regional Director, Hewitt Associates

ow should Indian companies approach the issue of managing growth from an organizational stand-point? What are the aspects they will need to focus on in the coming years?

Interestingly it’s a trend that w e are seeing all across Asia. Most companies have seen 2009 as a sort of breathing space after some very high growth period in the notso-distant-past, a time when things were not managed as efficiently as they would have liked to, but you know the idea was one of bullish growth. I think the impact that 2009 had on those organizations was one of consolidation before they get into the next level of growth. There are some really strong players talking about efficiencies, consolidating the base, covering their various businesses, optimizing profitability, so that the next phase of growth is built on the base of a stronger organization. That I think is the predominant trend. Companies have strong plans for growth but are concentrating on building the capability to execute them. Focusing on employee efficiencies, productivity, getting more out of the quantity or quality of people within the organization and then looking at the return on investment. The last thing, which I think is worth talking about, is that companies will not go ahead with a primary strategy of acquisitions for growth. They would probably look for better leverage out of their business processes. So effectiveness of selling for growth - whether its sales network or channels or better leverage of those channels or even selling capabilities, skills and efficiencies - would become a key part for company strategy. 38 • People Matters • March 2010

SMITA ANAND

Can we say that there has been a busy period of growth and some excesses, followed by maturity and consolidation? Obviously there has been a lot of reflection in the past year. Initially it caught a lot of companies by surprise. One of the things we saw in India during the last year was the continued confidence that ‘this too shall pass’ and that we will use this year as an opportunity. What we didn’t see was wild reactions in the way of freezes - there were pay cuts, there was consolidation, there was bonus deferrals but it was not as dramatic as it was in certain other parts of the world and this speaks volumes for the India Inc’s

LEAD SPEAK confidence…to say we will use this year as an opportunity to reflect, regroup and continue.

Do you think they actually have taken advantage of 2009 as they could have. Because a lot of people have talked about it but when you go into the details like which processes have you been able to turnaround or which systems have you been able to implement what is it that really comes out... in the long term, do you really believe that companies have been able to create that fundamental base? You know that’s a great question and if you are asking that for India I would say its too early to analyze how much more effective companies become in 1 year. But I would say that the biggest achievement would have been more in terms of industry’s awareness, reflection, maturity of perspective, desire and intent to lock in the value of their businesses in terms of cost effectiveness and optimizing in 2009. Did they completely change in one year? I would agree with you here – and I don’t even think its even fair to expect that. So the year achieved the much needed maturity and prioritization in a market that is going to grow for many years. You know last year also provided level playing fields in some senses between competitors whether it is competing markets or competing organizations, so everybody had a chance to do a little bit of reflection and consolidation. The next stage will tell how much consolidation happened and exactly how well have they been able to implement the things that they clearly wanted to do.

In India, for instance, attracting intelligentsia from outside the country, making this an attractive destination for more and more Indians to come back, work here and finding a rewarding career is a big challenge. At organizational level it’s a challenge because competitiveness has increased. Companies are buying out very specific skills and capabilities that they need. Hence retention is an issue, it’s an issue whether you are a great employer or not. But generally there is skill shortage. Reskilling for a different environment, more global environment, more competitive - this is going to be a challenge and there is definitely a shortage in that sense, though not to the extent that some other Asian countries may grapple with.

Can you elaborate on the role of Mergers and Acquisitions for Indian corporate growth? We recently did this study of some of the best employers across Asia. We spoke to the CEOs of best employers about their priorities and interestingly, at least among that lot, acquisitions come up as their last priority. It is among the top 10-12 priorities all right, but they are looking more at profitability, employee efficiency, productivity and execution of existing strategy that we were previously talking about. One possibility could be that the first round of growth will look at organic growth and better leveraging off the current client base and market opportunities. We would be looking at the first half of 2010 but M&A may pick up dramatically thereafter. World Bank projections indicate over 900 deals for over USD 90 billion in Asia-Pac. Despite the slowdown, we understand that there is a deal pipeline of almost USD 15 billion in India and 5-6 of them are for more than USD 1 billion. If you look at China’s statistics, they already have a pipeline of over USD 130 billion and more than 15 deals of those are greater than USD 1 billion. The point being that there is definitely activity picking up in these markets. There will be a mix of organic growth and consolidation - productivity, better leverage, effectiveness and so on. And further into the year, inorganic growth activity is expected to pick up. From an industry standpoint, the highest M&A activity in India is likely to be in industrial materials, consumer discretionary and consumer staples. Similarly in China, energy, material, financial services, consumer discretionary are the sectors where maximum M&A activity is anticipated.

ATTRACTING INTELLIGENTSIA FROM OUTSIDE THE COUNTRY, MAKING THIS AN ATTRACTIVE DESTINATION FOR MORE AND MORE INDIANS TO COME BACK, WORK HERE AND FIND A REWARDING CAREER IS A BIG CHALLENGE

Many entrepreneurs and senior managers in India claim that raising funds is easier than finding the people to manage and effectively utilize those funds. What is your opinion on this? As I travel more, Indian talent is the one thing I am increasingly proud of, at least from the point of view of people outside of the market. We Indians tend to be very self critical but the one positive thing about our country as a brand is its talent and quality of talent. So you know obviously there is a lot going around. Your question is pertinent in growth aspirations that we have across the region and most parts of the world because of various factors - be it ageing of population or insufficient resources for the next generation coming up or a general talent shortage that the world is constantly trying to deal with. It’s no different in high growth markets like China and India though it plays out in very specific ways.

Smita Anand, Hewitt ’s Asia-Pacific Consulting Leader, is responsible for managing the company ’s market groups and consulting business in the Asia-Pacific region.

People Matters • March 2010 • 39

MANAGING REWARDS

Making

ESOPs Work ESOPs have steadily gained acceptance and popularity in India, not only among corporate management but also among the beneficiaries, the employees

ith its initial usage in the IT industry, Employee Stock Option Plans (ESOPs) are now a given component of compensation in almost all employee centric organizations. ESOPs are often looked upon as a legal or a financial instrument and hence administered by the Legal or CFO’s office. Since ESOPs involve issue of shares, payments and taxes, these functions certainly have a role to play. However it is the Human Resources function which usually initiates and implements the Plans. Hence it is up to them to make the ESOP successful and a sought-after tool by the employees. Success of ESOP is also critical because it’s a costly tool. When companies issue shares to employees, it dilutes the value of shares in the hands of other shareholders. Higher the discount to market price, higher the dilution and hence higher is the associated cost. The management will have to face the shareholders’ wrath, if the ESOP pool is not effectively utilized. Effective utilization of ESOP pool not only means judicious distribution of the available shares but also ensuring that grant of ESOPs lead to higher motivation levels, better operational performance, appreciation in Stock prices, higher ESOP gains and hence satisfied employees. When do we say that a company has a successful ESOP implementa-

40 • People Matters • March 2010

tion? From the employees perspective the most tangible indication is when the employees make money. But that is not always the case. The reality is that the stock markets are not always on a high, irrespective of the company performance. You have Tsunami, Oil crisis, Iraq war, strong Rupee and tons of other reasons why the markets fluctuate like a pendulum. The key is how does the company management educate and communicate with the employees that ESOPs work even when markets fluctuate. From the management’s perspective, success of ESOPs is manifested in higher motivation levels, higher retention and realignment of the employees’ interest with shareholders’.

How can ESOPs be Made Successful? Well, it starts right from how y ou have designed the Options. Higher discounts to market price are not the be all and end all. Giving shares cheap to employees will make monetary gains a certainty which is not good for the spirit of ESOP. On the contrary giving Options at the market price and motivating the employees to help in making the price grow will go a long way in not only increasing the shareholder value but also giving a deep sense of satisfaction to the employee of having achieved something. Satisfaction is always high and long lasting when you have earned something through effort and not as gratis.

BY HARSHU GHATE

THE REALITY IS THAT THE STOCK MARKETS ARE NOT ALWAYS ON A HIGH, IRRESPECTIVE OF THE COMPANY PERFORMANCE. THE KEY IS HOW DOES THE COMPANY MANAGEMENT EDUCATE AND COMMUNICATE WITH THE EMPLOYEES THAT ESOPS WORK EVEN WHEN MARKETS FLUCTUATE

MANAGING REWARDS Whom to Grant and How Much? Given the limited pool, one needs to be selective on the coverage and quantum. The choice is between covering a larger base with a smaller allocation vis a vis a smaller employee base with a sizeable allocation to each. How much is adequate is a critical question? Effective strategy could be to grant large chunks to a fewer employees where the potential gains are too high to forego. Often these are more than 100% (annualized) of the cash compensation. This also goes well with the universal perception that employees at junior levels are not necessarily attracted by a long term incentive like a stock option. They would rather have a cash incentive, which though lesser in amount is received yearly and is cash and not an option which they do not understand and takes years to realize.

Frequency of Grants Here the choice is between granting the whole entitlement once in a year or grant the same quantum but quarterly. Frequent grants have the advantage of pricing the options in line with the market swings. In case of the yearly grant if the grant date coincides with the peak stock price, the entire grant is locked at the highest price. On the contrary if the grants are made quarterly or even monthly, pricing is close to market movements. If the prices were to go down, grants could also be at a lower price. It works the same way like a SIP plan of a mutual fund.

Vesting Conditions Vesting of options can be time based or performance based. Performance based vesting, which is now gaining popularity will ensure that equity dilution happens only on the demonstrated performance. In a time based vesting scenario vesting happens irrespective of the post-grant performance. Practically it may not be possible to link vesting to performance for employees at all levels, however the allocation to the senior management can be of such a category.

Communication Key to ensure that the employees 42 • People Matters • March 2010

are not de-motivated when the chips are down is a very strong communication link with them. It starts right when you grant. They need to be educated that ESOP is a long term instrument giving benefits over a 3 to 7 year period. It is not about a one time spurt in stock price but about sustained growth over a longer time. When the performance is down the communication needs to focus on why is the performance below expectations, what is the management doing about it, what can the employees do about it, why is it a short term dip before the company will bounce back and so on.

HAVING A WELL THOUGHT OUT COMMUNICATION PLAN, WITH ADEQUATE BUDGET ALLOCATION IS ESSENTIAL TO MAKE ESOPS SUCCESSFUL Communication is also essential in making the employees aware about their ESOP entitlements and benefits. Globally more than 30% of the granted options lapse, bulk of them because the employees forget that they hold some vested options. Having a well thought out Communication plan, with adequate budget allocation is essential to make ESOPs successful. Communication can be in several forms. Pre-grant orientation, grant documentation, help manuals, quarterly / six monthly performance reporting, periodical bulletins, vesting alerts, email campaigns, workshops, presentations, and so on.

Understanding Expectations and Designing Solutions One of the vital ways of ensuring success of ESOP would be to understand in advance the expectations of

the stakeholders and designing solutions to address them. Key stakeholders here are the beneficiaries (eligible employees), management (usually CEO) and the shareholders (promoters, strategic partners, Institutional investors, potential partners). From the employees’ and management perspective, the Option design should ideally be tailored for different hierarchy levels. Usually the differentiation in levels is made in terms of quantum of the grant. It will help if the Option design is itself different for different levels. One of the variations could be in the vesting condition as mentioned above. The others could be different vesting periods (longer for higher levels), different pricing (premium to market price can be considered for the key senior employees like the CEO or key business leaders). From the shareholders’ perspective, the expectation is to achieve, high corporate performance with minimum dilution. This can be achieved through judicious use of the available pool and linking vesting to corporate performance. ESOPs will not work, if there is no buy-in of all the stakeholders. Shareholders have to approve of them wholeheartedly. Management should design and roll them out ingeniously, by being transparent about the process, by being responsive to the expectations, by periodically evaluating the Plan performance and correcting the course if required. Employees have to understand the motive behind ESOPs, understand that Option certificate is not a lottery ticket, which will fructify by fluke neither is it a Government bond which will give returns even if the heavens fall. They are an instrument which makes them partowners of the organization they work for. It is for them to maximize the returns for themselves and other shareholders who are relying on their skills and abilities. Human resource team has a decisive role in making ESOPs successful in their organization. Harshu Ghateis Co founder and Managing Director of ESOP Direct and he can be contacted at harshu@esopdirect.com

PM COLUMN

Looking Forward to a

Monday Morning While experts focus over the creation of an organization of the future, a little introspection might reveal that your workplace already has the necessary ingredients BY SHANTANU DHAR, ASST. EXECUTIVE DIRECTOR , DALMIA CEMENTS

tudy after study on workplace climate, et al, have been read and forgotten. Loads of surveys have been done and clever consultants have presented clever reports (that no one would confess to not understanding!) on how to create the workplace of tomorrow. The more I read them and the more I interact with such wise men (and women), a little voice from inside tells me that, perhaps, it is not all that complicated! How many of us on a Sunday night, have looked forward to a Monday morning? Ok, let’s not count the days when we were on vacation, but seriously, how many? If we can answer the above question with an affirmative then, we may have already worked with a company that has created the work place of tomorrow. Maybe, these companies have not done so by design, but the important thing is they have just created this anyway! I ask this question (in an informal manner) about looking forward to a Monday morning often to my friends in the industry. For those who have looked forward to a Monday morning, here are the answers I get: Having a boss who gives top priority to trust and understanding. This does not necessarily mean that the boss has not been demanding, but the trust and understanding needs to be very high. Many people spoke of a work place where disagreements were discussed and dissolved before the end of the day. They also mentioned about being set up for success and not failure. The company encouraged people to take

44 • People Matters • March 2010

HOW MANY OF US COUNT THE DAYS WHEN WE ARE ON VACATION? targets that were stretched, but achievable, and then gave support to achieve them. Once achieved, the success was duly celebrated! Job security: Company watches performance closely and when not meeting standards, people are quickly shifted to a job that matches the person’s skills & aptitude. Hire & fire is not the norm. Attitude and not aptitude is more important to the organization. Employ ees feel like family. Spouses know each other, the boss socializes regularly with teams. People have best friends at work! Politics is not encouraged. The ‘politicians’ are sidelined or weeded out. Feedback is a straight forward affair. The person receiving it would have no doubt that the giver was on his/her side! Empowerment is a norm. Having coached an individual, the boss would quickly get out of the way. This one was a surprise: No power point presentations! Discussions are done over either excel or a word document and submitted 48 hours before a meeting, where people sent their queries beforehand. Humor! Everyone has a sense of humor, especially at their own self. No

one took themselves seriously. They took their work seriously though. Mistakes: People got together to help the person who had made a mistake. He is not hauled over coals for them. A clean workplace: Leadership behaved exemplarily to create an atmosphere free from harassment, sexual or otherwise. Of course, there was no mercy from practical jokes! This one is another surprise; no posters and great declarations about the company’s culture! Just quiet, actionable behavior that reinforces the culture again & again! Giving credit: All leaders gave complete credit to their teams. They owned all failures though. Accepting the company’s shortcomings; not glossing over them. Not blaming each other over crisis. Informal mentors and coaching programs. Keeping one’s word! It was a given. I think , the most important one: teams took a stand for each other come rain or shine. However, one common thread was that almost all the people I have spoken to mentioned that this culture was not sustained. On questioning why, they said that all of a sudden, some wise consultant would come along, do a survey and then advise the company to change its culture! What I do see is that most of it is actually common sense. So if we see this in our organization, perhaps we need to record it and most importantly, conserve it. If we do so, then would we all look forward on a Sunday night, to a Monday morning? I certainly do hope so!

GLOBAL PERSPECTIVE

Strategyand Execution

Essential skills for a modern leader Robin Speculand, CEO, Bridges Business Consultancy Int. talks about the basic ideology behind his model of execution in “Beyond Strategy”

ROBIN SPECULAND

ell us the basic ideology behind your model of execution in “Beyond Strategy”. How is it different from other models? What is new from your earlier “Bricks to Bridges”?

Implementation is about ensuring the right actions every day. Far too often leaders underestimate the implementation challenge and as a result do not allocate enough time or resources and implementation slides off their radar. Our mantra, in Bridges, is to support leaders to ensure they execute the strategy and deliver on their promises to shareholders. To achieve this we provide the leaders with the tools and techniques they require to make sure the right actions are being taken. The approach is based on our research over 10 years on companies implementing strategy and extracting what works and what to avoid. We discov ered that every implementation is unique because every company’s culture is different and every leadership team has different strengths and weaknesses. This led us to step back a level and to develop a generic model from the research and also from the work we have done in India, Asia and the rest of the world. From the research, we discovered eight areas of excellence in execution that all successful companies focused on. These eight areas evolved into our proprietary tool, the Implementation Compass™. Excellence in execution, we discovered, is not about doing one or two things well, such as changing measures or communicating the strategy or running a training program. It is about doing eight things well, simultaneously. The Implementation Compass is a framework that provides leaders with the structure to make their strategy come alive. Instead of wandering aimlessly through the implementation maze, it allows leaders to assess their implementation readiness and identify the key areas to tackle. People Matters • March 2010 • 45

GLOBAL PERSPECTIVE The eight areas of excellence that make up the points of the Compass: People, Biz Case, Communicate, Measure, Culture, Process, Reinforce and Review have not changed since its introduction seven years ago and provide the chapter headings for my new book - Beyond Strategy - The Leader’s Role in Successful Implementation. When talking to a potential CEO client recently we were discussing a previous strategy roll out that failed. After presenting the Implementation Compass the CEO immediately pointed to Process and Biz Case and explained that they had only addressed these two areas and basically ignored the six other areas of excellence. The Compass allowed her to reflect from a holistic perspective why the previous rollout had failed. We then initiated work with the company by assessing their overall readiness to implement the new strategy by interviewing various people in the company and reviewing their challenges ahead. We then presented back to the CEO the current strengths and weaknesses to implement the new strategy based on the Compass. The implementation is currently on schedule and being well received across the company. The Compass is different from other models in that it clearly identifies the right action a company needs to take based on its strategic objectives, culture and its readiness to implement the strategy. Many leaders take action but not necessarily the right action to execute the strategy. Too much time is wasted doing the wrong things. To achieve excellence in execution, leaders must know the right actions to take to guide the organization. They must know what they want their people to do differently and they must know what they themselves must do differently to lead the implementation. Beyond Strategy differs from my previous book, Bricks to Bridges in that it addresses the specific action leaders must take in the implementation journey. Each chapter concludes with the specific actions required and how to customize them to your company’s culture. Bricks to Bridges is considered by many as a handbook for implementation and answers how to identify the right actions for the organization and people.

of a manufacturing company presented to me the strategy and asked for an opinion. Some were disappointed when I would not comment. The reason I would not comment is that at the start of the implementation I am passing an opinion, as is ev eryone else. Y es, some people may have a stronger opinion than others but it just still an opinion. I explained to the CEO that I would report back after the first three months with the initial measures. This way we would be initiating discussions based on facts and data and not only opinions. Many airlines, for example, thought that providing internet during flights would be an additional revenue earner but it turned out to be a loss though it sounded like a good idea. In another example customer focus groups said that a 24 hour news channel would never work! Strategy and implementation are equally important. Currently the pendulum has swung towards implementation as the titanic failure rate has acted as a catalyst and leaders recognize that something different must be done. A leader needs the skills to craft and execute strategy. Keep in mind that most leaders, if not all, who have graduated with a degree in business, studied a module on strategy but not on its implementation. “Strategy is about deciding what to do; execution is about getting it done. Both are essential skills for a modern leader.” McKinsey & Company

TODAY’S LEADERS MUST ABANDON YESTERDAY’S BELIEFS FASTER THAN EVER BEFORE AND MUST IMPLEMENT NEW STRATEGIES MORE FREQUENTLY THAN EVER BEFORE

Your book focuses on the implementation phase only. The failure of an implementation could also come from the fact that the strategy was drafted without participation of the team and lack of their involvement? So focusing on implementation process alone might not be the solution. What is your take on this? Great question. How do you know if a strategy is good or bad? The only way is to implement it. On one occasion the leadership team 46 • People Matters • March 2010

What is the importance of the leader versus the the team in the drafting and execution of a strategy? Both the drafting and the implementation will almost always involve a team, except in small businesses. It is important to test both the hypothesis of the strategy and the implementation plan and this involves teams. Blanchard’s situational leadership is as true today as it was when he first published it. There are times to lead from the front and times to encourage teaming. It is the leader’s responsibility to be able to identify the right style.

Most of the times, people across the organization are not included in the planning process to any desired change or shift and they typically end up resisting it. These same people when included end up being big allies and supporters, helping to push it forward. Could you speak to that phenomenon? In another organization we worked with the CEO who took the time to involve middle managers and staff members in different stages of the strategy development. When it came to the implementation many of these people became team leaders and presenters in a corporate wide communication cas-

GLOBAL PERSPECTIVE

cade. Within two years many of the staff and middle managers who were involved with the strategy had received promotions and were being fast tracked in the company. On another occasion I worked with a CEO who was very autocratic. The crafting of the new strategy involved a global consultancy and only his top team. The implementation was generally pushed on to middle managers and staff as the CEO felt time was of the essence. In the second year the business reported 41% operational profit and the strategy has been a great success. There is no single answer to your question. Every company must find what works for its culture. It is also important to note that strategy is not defined by culture but implementation is. What this means is that when the leaders are crafting the strategy the company culture is not a contributing factor. Strategy is about defining the future and you start with a blank piece of paper and you are not limited by considering what will work in the company. Cultures does not drive the crafting of strategy but it does drive the implementation. The implementation must be defined by the rituals, beliefs and customs of the organization. Therefore whether you include middle managers or staff members is answered by understanding your company’s culture.

REVIEW IS THE POOREST PERFORMING AREA AMONG LEADERS TODAY IN IMPLEMENTATION. THE ODDS OF SUCCESSFULLY EXECUTING A STRATEGY THAT ISN’T REVIEWED FREQUENTLY ARE SLIM TO NONE

Don’t you think that we are expecting too much from leaders today? Are those expectations reasonable? Yes. It is simply not an option. Leaders must be more flexible, agile and skilled than ever before. Consider as an example that strategy life cycle is becoming shorter and shorter. It was not long ago that we were setting strategies for 10-12 years now it is 2-3 years. As a result of this, today’s leaders must abandon yesterday’s beliefs faster than ever before and must implement new strategies more frequently than ever before. Excellence in execution is a must skill set for any leader today. The Rule of Thumb is: 1XStrategy 2XImplementation, if it takes you nine months to create a new strategy then you

need to spend at least 18 months fully focused on the implementation. Organizations that require longer crafting strategy (due to size or complexity or aggressiveness of the strategy) require a longer time implementing it, for the same reasons. Leaders are responsible for the future of the company by not only crafting the new strategy but also executing it and delivering on its promises.

What are the 3 main ‘take-aways’ from “Beyond Strategy”?

1. The staggering failure of leaders to deliver on the strategy promises has led implementation to becoming an integral part of strategy discussions and thus a skill set leaders must have. Leaders can no longer delegate their implementation responsibilities. 2. Implementation never goes according to plan and leaders must oversee and direct the implementation. After all it is the implementation that delivers the revenue not the strategy. 3. Review is the poorest performing area among leaders today in implementation. The odds of successfully executing a strategy that isn’t reviewed frequently are slim to none. Leaders must be reviewing parts of the implementation every two weeks so that they know what is happening and can resolve small problems before they become big problems. By every quarter they should have reviewed the implementation in full. Reviewing strategy every two weeks is a new discipline for many leaders and has the additional powerful benefit of changing the dialogue from operation to strategy (and shifting the ratio of time spent by leaders) and also sending the right message across the organization. Robin Speculand is Chief Executive of Bridges Business Consultancy Int and a bestselling author.His latest book is Beyond S trategy – The Leader’s Role in Successful Implementation. His work begins once clients have crafted their strategy and ready to begin the implementation journey. Robin is a masterful event facilitator and an engaging keynote speaker. Visit www.strategyimplementationblog.com

People Matters • March 2010 • 47

MANAGING TALENT

Why so much

Employee Development Fails and how to make it Stick? World-over, there is possibly no other corporate activity which has lower ‘evidence of success’ as Investment on Employee Development

BY RAJ BOWEN, MD - PDI NINTH HOUSE, INDIA

hile many well-studied measures of ROI remain valid - the investment is usually upfront - the benefits accrue over a period of time. This realization itself makes it necessary that, vis-à-vis post event analysis, prior planning may have more significant payoffs. At PDI Ninth House, an organisation committed to research in the domain of talent engagement and development, this field of study is important for strategic reasons to ensure that our own corporate development solutions address the ‘means’ to ensure the ‘ends’ meet with predictable success. Decades of research and validation of the hypothesis around client engagement across the globe, across industry sectors, across company levels - continue to throw up supporting evidence that likens ‘learning and development’ as a process along a continuum as opposed to isolated ‘events’.

The Development Pipeline® In order for any real learning and related change to happen in an organizational context and most importantly sustain itself, the organisation must ask and provide answers for five essential conditions - insight, motivation, new knowledge and skills, practice at workplace and accountability for sustained growth. 1. Insight: Do people know what to develop? This critical enabler may sometimes get forgotten in many robust learning and development initiatives. Lofty team phrases and shared vision documents can very often obscure the fact that adults are ‘selfish’ in what they choose to learn and they have and they do exercise the choices. A senior executive exercises the choice by making himself unavailable for a particular initiative for which he has been nominated. A relatively junior employee, not having this vetopower, may exercise his choice by attending every stage of the process – but not learning anything. For ensuring its 48 • People Matters • March 2010

success, employee development initiatives must clarify 3 key questions beforehand to give the employee very clear, unambiguous and correct insight. What does the organisation expect from me? The employee needs to know the context in which his work relates to the larger strategy of the organisation. Most frustration of employees missing the ‘bigger picture’ stem from an oversight to clarify this component at the insight stage. How do my fellow colleagues in the organisation view me? We do not work in a vacuum. In fact, most of our lifehours as employees are spent in the company of fellow colleagues. This stands to reason that this segment can provide one with the most meaningful insights regarding both strengths and development areas. This data point adds a very meaningful start to any serious learning plan. Having incorporated the above into the ‘rationale’ for learning – no journey can start without a roadmap - and nothing beats the good old Individual Development Plan. An effective development plan makes sense to an employee only if it reduces hassle, saves time and positively impacts financial returns. At the advanced levels, the plans must address more evolved levels of needs. The fundamentals however cannot be bypassed. Too many individual development plans die premature deaths like ‘new year resolutions’ simply because they ignore basic mandatory aspects. An effective development plan makes sense to an employee only if it reduces hassle, saves time and positively impacts financial returns. 2. Motivation: Many development initiatives erroneously assume that just by making employees aware of what they need to develop is good enough for starting the process - a killer of an assumption. Unlike children who (hopefully!) learn if exams are round the corner, professional corporate adults do not learn just because someone wants them to.

MANAGING TALENT The motivation to invest time and effort, and energy on one’s development only happens when people can clearly see the connection with payoffs. They need to understand how the acquisition of new skills, knowledge, competencies, helps in better and more meaningful achievement of their self, group and organisation goals. The challenge and the opportunity is to create an environment where the employees are doing the ‘chasing’ for their learning process activation rather than any boss/ HR having to push. There are ways to make this happen! Invariably, the best method here is to link the motivation to individual insights – so if the first stage of the pipeline addresses the ‘what’, the motivation stage can address the ‘why’. Unlike children who (hopefully!) learn if the examinations are around the corner, professional corporate adults do not learn just because someone wants them to. The motivation to invest time and effort, and energy on one’s development only happens when people can clearly see the connection with payoffs.

AN EFFECTIVE DEVELOPMENT PLAN MAKES SENSE TO AN EMPLOYEE ONLY IF IT REDUCES HASSLE, SAVES TIME AND POSITIVELY IMPACTS FINANCIAL RETURNS

3. Building capabilities: Do people know how they can acquire the required new pieces of learning, how do they know if they are on the right track, are they following the right processes? The situation is akin to someone who wants to lose weight, gets very excited about the prospect and enrolling in a very modern and complete gym-with no instructor! Even organisations that boast of evolved knowledge management and access systems err by believing that employees will find their own way. Some might, but the larger purpose of such initiatives is left dangling unless there is a process that structures this stage. What needs to be kept in mind is every learner’s unique learning need and style, as well as the organisation’s larger ‘group learning’ goals. Some organisations spend money and effort at getting the insight and motivation right and just when ‘the pump is primed’, they ignore this stage. Hence they have many employees – all dressed and nowhere to go - a guaranteed recipe for frustration and cynicism - not to talk about the sheer resistance when you want to make a fresh start later. In the related context of the earlier two steps in the Development Pipeline®, this stage represents the ‘How’ of the learning model.

4. Real world practice: Workplace application of any new learning has three extremely important sub-conditions– (a) Immediacy - While the novelty of the idea remains and the initiative to ‘try’ is strong, the learner must get the opportunity to experiment at the workplace. The more this process gets delayed - and this starts spiralling once the initial momentum is lost the lesser the chances that anything serious will be attempted later. If it is not happening now, it is not going to happen later. (b) Relevance - An employee can surely benefit immensely from participating in a high -impact corporate initiative structured around collaboration and handling conflicts by getting along better with his mother-in-law - is hardly what the investment plan had as a payoff. Yes, surely this can be a very sensible benefit to the employee at a personal level - but the workplace goals need to be paramount for any meaningful change to happen in the organisation. (c) Encouragement - Like with most newly learnt skills, the first few attempts at its application are unlikely to create music - possibly more of noise. The last thing we want happening here is for someone, usually an impatient boss, playing spoilsport by failing to acknowledge and encourage the first attempts. Remember the real cheerleaders support the players right through the game from the first whistle itself. They do not wait for the team to win so they can clap and dance. Organisations that structure an employee development project without the enrolment and active involvement of the immediate boss run the risk of not being able to create this application-enabling stage of the Development Pipeline® and losing out on any meaningful change guidance opportunity. Organisations that structure an employee development project without the enrolment and active involvement of the immediate boss run the risk of losing out on any meaningful change guidance opportunity. 5. Accountability: Finally, who ‘owns the monkey’ for learning and development, behavior change, results and sustained impact? Is it the boss, or the HR, or the larger organisation, or is it the employee himself? While there is a shared responsibility here as all the various stakeholders have roles to play and also have specific gains accrued to them - the buck stops with the learner. At the end of the day, new capabilities and knowledge need to become a ‘way of life’ with the employee. This internalization accountability needs to be communicated, understood and agreed to rather ‘explicitly’- not when the learner is midstream but when the project is being conceptualized and scoped. Bestin-class organisations communicate expectations very clearly around employee development initiatives. Visualizing employee development that leads to sustainable and desirable change in behaviors can be best compared to this image of the Development Pipeline®. As would happen with any real ‘pipeline’, if development were to flow through it, any clogged artery or constriction of one stage would slow down the process and impair growth. Organizations can save millions by simply evaluating their projects on the pipeline model - and getting a sense of what stages are blocking the progress. People Matters • March 2010 • 49

MANAGING REWARDS

Changes in Personal

Taxation

What You and Your Employees Must Know BY DHRUV AGARWALA & KARTIK VARMA

ince the Annual Budget in July 2009, the rules around the taxation of benefits have changed dramatically. As a result, the economic impact on salaried employees has also changed. Here we demonstrate through a stylized example the impact of the rule changes, and offer another stylized example of how salary can be restructured to mitigate the economic impact on your employees.

Motor car and driver

Free meals expenses

Domestic help

Holiday travel

Rent free housing

Interest free loans

Educational facilities

Club membership

Gifts

Lets Start with a Bit of History

Impact of the New Tax Rules

Fringe Benefits Tax (FBT) was introduced in the 2005 Budget. Under FBT, when a company gave certain fringe benefits to its employees, the company was liable to pay FBT on these benefits. Typically, the tax rate on most of these benefits was 6.79%. Commonly, the company would pass on the economic impact of this to the employee by recovering the same from them. Under the Annual Budget announced in July 2009, FBT was abolished. Under the new rules, reimbursable benefits offered to employees will now be taxed in the employees’ hands, at their respective marginal income tax rate. At the time of this announcement, the new valuation rules were still awaited. These were finally announced in Dec 2009, and elaborated upon the taxation of the perks offered to employees. The big impact of this announcement was that the new rules were made applicable from April 1, 2009. As a result, in the remaining months of the then current financial year (i.e., Jan-Feb-Mar of FY 200910), employers had to recover the tax due on perks offered so far to the employees during the financial year (i.e., Apr thru Dec FY 2009-10). This potentially put a cashflow burden on the employee. The following are a sample of commonly offered perks that are now taxable in the hands of the employees:

As a result of the new tax rules, the burden of taxation on the employees has gone up, and their cash in hand has reduced. Lets study this with a stylized example. Because we are focusing on the impact of the new rules of perks and benefits, we are assuming that other salary components such as HRA, LTA etc. are neutral. Exhibit A shows a simple salary structure where the Cost to Company (CTC) is Rs. 9 lakhs.

50 • People Matters • March 2010

Exhibit A: Simplified Salary Package Annual Salary Component Basic Salary & Taxable Components

Amt in Rs 4,80,000

Reimbursements & Flexi Pay: Personal Car: Fuel & Maintenance

2,40,000

Personal Travel Reimbursement

60,000

Club Membership

60,000

Gift Vouchers

60,000

Cost to Company (CTC)

9,00,000

MANAGING REWARDS Exhibit B: Taxability - FBT vs. New Rules Exhibit B looks at the taxability under the new rules versus the old rules. You will notice that under the column marked FBT, the taxable amount is Rs. 4.80 lakhs, much lower than the Rs. 8.95 lakhs amount under the column marked New Rule, because previously the benefits offered to the employee were taxed to the company, whereas now they are taxable in the hands of the employee. Exhibit C shows that for the same CTC structure under the FBT regime and the New Rule, the cash in hand, post-tax, is 92% of CTC under the FBT regime versus 84% under the New Rule. Its obvious that employees are worse off under the new rules scenario because all the reimbursements are taxable in their hands, reducing their take home pay.

Annual Salary Component Basic Salary & Taxable Components

Exhibit D shows the perks which were tax free for employees under the FBT regime, but are now taxable in their hands in the new regime.

4,80,000

FBT

New Rule

4,80,000

Reimbursements and Flexi Pay: Personal Car: Fuel & Maintenance

2,40,000

Nil

2,40,000

Personal Travel Reimbursement

60,000

Nil

60,000

Club Membership

60,000

Nil

60,000

Gift Vouchers

60,000

Nil

55,000 (Rs.5000 p.a. exempt)

Taxable Amount

4,80,000

8,95,000

Exhibit C: Taxability - FBT vs. New Rules Items (Amt in Rs.)

FBT

New Rule

CTC

9,00,000

Taxable Salary

4,80,000

8,95,000

Less: Tax Liability of Employee

30,900

1,46,775

Less: FBT Liability passed to Employee

40,788

Nil

8,28,312

7,53,225

92%

84%

Take Home Salary

AS A RESULT OF THE NEW TAX RULES, THE BURDEN OF TAXATION ON EMPLOYEES HAS GONE UP, AND THEIR CASH IN HAND HAS REDUCED

Amt in Rs

% of CTC

Income Tax Liability

FBT

New Rule

CTC

9,00,000

Taxable Salary

4,80,000

8,95,000

Less: 80C Deduction

100,000

1,00,000

Net Taxable Income

3,80,000

7,95,000

Tax on Above - According to Slab Rate

30,900

1,46,775

Exhibit D: Employee’s Tax Liability on Perks Perk

FBT

New Rule

Conveyance Reimbursement

Yes

Tour, Travel, including foreign travel

Yes

Hotel, boarding and lodging facilities

Yes

Entertainment Reimbursement

Yes

Repair, running, maintenance of car

Yes

Gifts

Yes

Books and Periodicals Reimbursement

Yes

Club/Health Club Membership

Yes

People Matters • March 2010 • 51

MANAGING REWARDS Exhibit E shows the perks where there is no change from the FBT regime to the new regime, i.e., these perks are not being treated any differently. But the rule change is not entirely bad. In some situations, employees might find that the new rule is actually beneficial. For instance, in the case of a Motor Car (and driver) offered to an employee, the New Rule might actually be more beneficial to the employee. Under the New Rule, the taxability depends upon who the owner/ hirer of the car is, for whose benefit is the car used – official or personal, whether the expenses are borne by the employer or the employee, and finally whether the size of the engine is above or below 1.6 litres. Accordingly, there might be a monthly figure that is taxable as a perk to the employee, but this amount can work out to be lower than what the taxable amount is if one does not structure one’s salary to take advantage of the new rules.

How can Restructuring the Salary Save Taxe for Employees? To mitigate the impact of the tax burden being passed on to the employees, employers can offer employees a flexible basket of tax friendly options to choose from. Some of these offerings will depend upon the grade and salary of the employee, the type of employees, as well as how aggressively or conservatively one wants to interpret the tax laws. Exhibit F shows the salary under the Current Structure, as used in the above example, and compares it to a Proposed structure. You will notice that the CTC is the same in both columns, however the components are structured differently. In the Current Structure, a Rs. 2.40 lakhs benefit was offered towards the provision of a car and fuel and maintenance. This entire amount is taxable in the hands of the employee. In the Proposed Structure, a car is structured as a tax friendly car lease, and a Rs. 1.20 lakhs reimbursement towards running and maintenance is offered. This latter amount is taxable in the hands of the employee, but is lower than the taxable Rs. 2.40 lakhs amount mentioned above. 52 • People Matters • March 2010

Exhibit E: No Change in Employee Tax Liability Perk

FBT

New Rule

Rent Free Accommodation

Yes

Sweeper, Gardener, Watchman or Personal Attendant

Yes

Supply of Gas, Electricity or Water for Household purpose

Yes

Education Facility to Employee’s Family Members

Yes

Leave Travel Concession (Subject to exemption)

Yes

Interest Free/Concessional Loan

Yes

Providing Use of Movable Assets

Yes

Transfer of Movable Asset

Yes

Telephone Reimbursement

Food Vouchers/Coupons

The taxability of the perk of the running and maintenance costs towards the car, under the Proposed Structure, is only Rs. 32,400, which is much lower than Rs. 2.40 lakhs in the Current Structure. Also in the Proposed Structure, Food Coupons are being offered to the employee. Up to Rs 50 per meal per day is tax free in the employ ee’s hand. As shown in Exhbit G, these Food Coupons are not taxable. We have minimized fully taxable components such as club membership and travel reimbursement and created a more efficient salary structure.

TO MITIGATE THE IMPACT OF THE TAX BURDEN BEING PASSED ON TO THE EMPLOYEES, EMPLOYERS CAN OFFER EMPLOYEES A FLEXIBLE BASKET OF TAX FRIENDLY OPTIONS TO CHOOSE FROM

Exhibit F: Lets Propose a New Structure Component (Amt in Rs.) Basic Salary and Taxable Components

Current

Proposed

4,80,000

Reimbursements and Flexi Pay: Personal Car: Fuel and Maintenance

2,40,000

Personal Travel Reimbursement

60,000

Club Membership

60,000

Gift Vouchers

60,000

5,000

Food Coupons

Nil

30,000

Telephone/Mobile Reimbursement

25,000

Car Lease

2,40,000

Car Running/Maintenance Reimbursement

1,20,000

9,00,000

Cost to Company (CTC)

MANAGING REWARDS Exhibit G: Lets Compare Taxability Component (Amt in Rs.)

Current

Proposed

Basic Salary and Taxable Components

4,80,000

Reimbursements and Flexi Pay: 2,40,000

Nil

Personal Travel Reimbursement

Personal Car: Fuel and Maintenance

60,000

Nil

Club Membership

60,000

Nil

Gift Vouchers – up to Rs 5,000 p.a. exempt

55,000

Nil

Food Coupons Telephone / Mobile Reimbursement

Nil

Perk: Motor Car Lease, Running, Maint.

Nil

32,400

8,95,000

5,12,400

Item (Amt in Rs.)

Current

Proposed

Annual CTC

9,00,000

Taxable Salary Less: Income Tax Payable

8,95,000 1,46,775

5,12,400 37,575

Take Home Salary

7,53,225

8,62,425

84%

96%

Total Taxable Salary

Exhibit H

% of CTC

As a result of some salary restructuring, the total taxable salary, as shown in Exhibit G above is lower in the Proposed Structure, thus giving the employee a higher percentage of CTC in hand, as shown in Exhibit H below. Not every company has a separate accounts or payroll department that is willing to be flexible and accommodating to offer tax friendly salary components to employees. However, the point is that it is worth discussing internally what is within the realm of the possible to restructure salaries in a tax friendly manner. Anything through which you can help your employees save on taxes will make your company a very popular employer! Dhruv Agarwala and Kartik Varma graduated from Harvard Business School and are Co-founders of New Delhi-based iTrust Financial Advisors

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MANAGING DIVERSITY

Managing

Diversity in the Workplace With ever-increasing complexity of business, it has become important to have employees from different backgrounds and cultures. Aparna Sharma, Director HR, UCB talks about the importance to have diversity in an organization 54 â&#x20AC;˘ People Matters â&#x20AC;˘ March 2010

ome of the studies carried out on Diversity in Fortune 500 companies have clearly shown that Diversity has a positive effect on bottomline and shareholder value. Enhanced business performance has been seen on various aspects like Higher Profitability, Return on Equity, Return on Investment etc. Thus, Diversity is linked to enhanced business performance & though various studies (like Catalyst Research report on Diversity, DiversityInc. Study by SHRM, Acad-

APARNA SHARMA

emy of Management Journal) are based mainly in the US and UK, they can still be generalized and applied across the world. When addressing Diversity, most of the organizations in India relate to it in terms of Gender Diversity. Organizations have varied reasons to take up gender diversity initiatives in India like instructions from their global counterpart, or the fact that the diversity in the marketplace should reflect among employees. Studies by Mckinsey have shown that women

MANAGING DIVERSITY bring in a different perspective and leadership style. Higher proportion of women at top management levels leads to better financial performance. Such companies also score more on various organizational dimensions such as employee motivation, brand image, innovation, capability, et al. While Diversity is perceived differently by different people; having a diverse work force includes employees with different regions (countries, states etc), gender, educational background, varied industry experience, socio-economic status, et al. Diversity at the work place not only means above-mentioned characteristics but also (and most importantly) allowing for diverse opinions as well. After all, no organization wants employees who think alike!

What is the Importance of Diversity? With ever-increasing complexity of business, it has become important to have employees from different backgrounds and cultures. It is important to have diversity in an organization for a variety of reasons like: • Global integration and interconnectedness makes diversity critical. • It allows insights into the consumer mind and appeals to a diverse market place. • Diversity supports cross fertilization of ideas and brings in different perspectives. • Women bring unique insights and impact the work place in a positive manner. • It enables best practices from different industries to be implemented. • Makes progress inclusive by carrying employees from different economic strata and religions. • Regional diversity brings different perspectives to work. • Functional diversity brings a different approach to finding solutions. While promoting diversity at workplace should be an important management endeavor, it does not imply that quality standards for recruitment should be lowered or incompetence

be accepted. For instance, a marketing team of an FMCG company could greatly benefit, if its members came from different parts of the country. Water, in some parts of the country is harder than others. This means that the same shampoo formulation might lather very well in Mumbai but not in Lucknow. A Mumbai based manager might not realize this. Having employees from different regions helps because people from every region have inherent personality traits which, when matched with their job profile can enhance performance. At the expense of sounding parochial, experience has made us think that North Indians are generally said to be aggressive and make good sales people. A noted Mumbai based head-

Organizations which are successful are those who are able to create a culture in the organization where differences of individuals are recognized and accepted. These are the organizations which bank on the different skills and abilities which a diverse workforce brings with it and where their strengths are leveraged upon. Having a large number of women at work helps as they have a sobering effect on the environment and are considered to be emotionally stronger than men. For instance, women are good at multi-tasking. They are empathetic, consensus builders, compassionate and these qualities need to be leveraged upon. Having team members from different economic backgrounds even

WHILE PROMOTING DIVERSITY AT WORKPLACE SHOULD BE AN IMPORTANT MANAGEMENT ENDEAVOR,IT DOES NOT IMPLY THAT QUALITY STANDARDS FOR RECRUITMENT SHOULD BE LOWERED OR INCOMPETENCE BE ACCEPTED hunter spoke about the non performance of a bright researcher. The employee concerned was a North Indian (Punjabi) who was assigned a desk job of doing research. By nature, most North Indians are outgoing and pushy people. Since the job went against her inherent personality, she neither performed nor was she happy. When shifted to a sales job, her performance leapfrogged. The greatest benefit of diverse workforce is the ability to tap into the many talents which employees from different backgr ounds, perspectives and abilities bring to the workplace. Today, most of the organizations have employees from all over the world. The success of the organization in such cases depends on how teams from different countries work together to make projects successful. There are people from different generations, cultures, backgrounds in today’s workplaces.

help in understanding the consumers better. A manager with a ‘middle class’ background, for example, would be able to better articulate the aspirations and consumer needs of his class. During my stint as a Management Trainee, I was part of a marketing discussion on the re-launch of a mass market hair dye. Half way during the discussions, the Head of Marketing asked his secretary to call Ravi, a Purchase Manager in his forties, who represented what we popularly call the middle class. It is widely believed that those with varied industry experience make good Consultants. That is so because such an employee is able to relate every problem to how a solution would be found in different industries, then benchmark with best industry practices and suggest an optimum solution. One of the reasons why the U.S. has excelled in innovation is because People Matters • March 2010 • 55

MANAGING DIVERSITY its Universities attract the brightest students from across the world. The country has become a melting pot for people from various cultures and backgrounds. It is this cross fertilization of ideas that has made the Silicon Valley, the centre of innovation and risk that it is. For any diversity initiative to succeed, it must have top management support followed by a buy-in from senior management. Group dynamics and leadership are critical in determining the success or failure of diversity, key tools being cohesion, conflict management and communication. It needs a foundation of a supportive and co-operative organization culture. The company’s training should focus on building skills in leading and participating in diverse groups rather than ‘simply valuing diversity’. The program should be headed by a Chief Diversity Officer who, like his functional counterparts, must have pre-agreed annual goals. The company should have a transparent system to measure progress on diversity. Employee’s performance appraisal system should provide scores for promoting diversity & it could be directly linked to incentives.

Special Initiatives to Promote Diversity Nationality – This assumes great importance for companies that serve global customers or are into exports of consumer products. An American citizen who works for an Indian IT company that serves U.S. clients would have a better understanding of local needs, unwritten nuances and work culture. Increasing percentage of women in work force - A special effort should be made to increase the percentage of women in the workplace. A big stumbling block is the mindset of male managers – “Oh! Can women do this? Will they sit late?” A well known MNC shifted its corporate accounts department from South Delhi to Gurgaon. A number of existing employees preferred to get transferred to other departments rather take a transfer to Gurgaon. The CFO had to make fresh recruitments. 56 • People Matters • March 2010

DIVERSITY INITIATIVES, IF NOT LAUNCHED PROPERLY AND WITHOUT PROPER COMMUNICATION, CAN ALSO LEAD TO NEGATIVE REPERCUSSIONS Around that time there was a diktat from HR that 50% of all new recruits had to be women. The CFO was furious! Will women sit late on an ongoing basis? During year-end closing, the accounts department worked all night – how would the women manage? Left with no option, ten girls were recruited. Here are the CFO’s observations. The presence of so many girls made the men behave themselves, there was little intra department shouting. During the year-end, the girls sat late. Since they wanted to leav e early, they managed to finish their work by 10 p.m. unlike the men who took two breaks (one at 6.30 p.m. and another for dinner at 9 p.m.). The girls worked virtually non-stop. They only asked for a car drop home since Gurgaon got quite lonely at night. The girls destroyed the myth that women do not sit late.

Today the CFO swears by his women employees! Another example of changing mindsets is allowing women to work on the shop floor. Here is another example. A senior HR professional graduated from one of India’s leading management institute. During campus recruitment, she insisted that part of her training period should be spent on the shop floor. Initially, the interviewing team was aghast and wondered why the girl wanted to work in what was then a very militant environment. The young lady persisted, got hired and eventually spent the first six months on the shop floor. As she reflects on the experience over a decade later, it was probably the best exposure that she ever got. What she learnt in six months was what others took years to learn. Most companies do believe that Diversity and Inclusiveness do form a business case. An inclusive culture is possible if there is proper sensitization training, the right climate and culture are in place. Diversity initiatives, if not launched properly and without proper communication, can also lead to negative repercussions. This can be by creation of camps in the organization where employees start believing that certain people are being benefited based on their gender or regional background. Thus, a fair and just system should be set with the goal of creating an inclusive workplace with equal opportunities based on Meritocracy. Also, there shoul d be an effort by every individual in the organization to eliminate stereotypes based on gender, economic background, educational qualifications, et al. The benefits of diversity in terms of better financial performance, improved employer branding and greater innovation and creativity will follow. Aparna Sharma is Director HR at UCB. She is a Post Graduate in Personnel Management & Industrial R elations (PM & IR) from the Tata Institute of Social Sciences ( TISS), Mumbai of the 1996 batch. She has worked with Nocil, Monsanto and Novartis. Aparna is an active member of various professional associations like, Indian Society of Training & Development (ISTD), All India Management Association (AIMA), National Institute of Personnel Management (NIPM), National HRD Network and Sumedhas. www.aparnasharma.in

PM COLUMN

Personal Assessment

...a Journey, not a Destination ‘Be what you would seem to be’—or if you’d like it put more simply— ‘Never imagine yourself not to be otherwise than what it might appear to others that what you were or might have been was not otherwise than what you had been would have appeared to them to be otherwise.’ “The Mock Turtle’s Story” from Alice in Wonderland

BY GURDEEP S. HORA

here is often a substantial difference between how we view ourselves, our work, our achievements and our shortcomings and how others see our performance and assess us. Devoid of an active integration process, both are subjective evaluations that are only marginally useful. Extensive research by Synergy consultants during the past many years has revealed that there are only two types of employees who are happy with their jobs: those who feel that their financial rewards are better than market norms and those who are satisfied with the degree of learning and growth in the organization. The industry is trying to meet employees half-way on both parameters but a general problem is the widening gap between self-assessment and peerassessment. The major cause of this widening chasm is the failure of industry to define the jobs and career paths of employees with adequate degree of clarity and commitment. Without these, an appraisal neither assists the organization in its strategic growth plan nor

58 • People Matters • March 2010

is seen by the employees as making any contribution to their career objectives. The basis of a successful appraisal system is to begin at the beginning (!), that is, first define the job. Its contents, functions, role and scope and discuss these with the employee in detail at the time of recruitment or promotion so as to arrive at a fair degree of consensus and agreement. The manager should simultaneously discuss with the employee his expectations from the job to understand and eliminate any inherent contradictions. The next step is to derive key result areas from the above in line with the organizational objectives. At this stage there is no need to establish level or amplitude of achievement. In fact no attempt should be made to add parameters of numerical measurement. Most organizations still tend to use appraisal as a ritualistic tool, essentially to assist the management in deciding annual increments and promotions. With its heavy bias towards comparative performance, measurement and financial rewards, it completely overshadows the essence of ‘personal’ growth and learning.

MOST ORGANIZATIONS STILL TEND TO USE APPRAISAL AS A RITUALISTIC TOOL, ESSENTIALLY TO ASSIST THE MANAGEMENT IN DECIDING ANNUAL INCREMENTS AND PROMOTIONS This fundamental disadvantage can only be overcome by insulating Assessment from the carrot and stick approach. Instead it should be a strategic management tool for enrichment of available talent. Thus it is suggested to have multiple appraisal meetings separated by considerable time gaps with emphasis on creating a positive non-judgmental environment. The guiding principle of the first appraisal meeting is to ‘build on strengths’. As a manager you begin

by letting your employees list out their personal strengths, special abilities, skills and interests. The employee then defines the relevance of these strengths to his job functions and the role in the organization. The next step is to analyze how the employee has employed these strengths in the actual performance of his/her job and the areas where (s)he has not been able to do so. The employee then identifies the corrective steps that he can take to utilize his capabilities more effectively and what is needed to further enhance his strengths. With this positive mental framework, the employee is taken down memory lane to reflect upon his performance in terms of his job-definition and the agreed key result areas. The employee lists out areas where he feels that his inadequacies have interfered with his job performance and the likely causes for the same. He then tries to identify, by himself, the possible corrective steps that he can take to overcome these deficiencies. In the process, the employee evaluates his own capacity for learning and identifies the skills or inputs needed for better performance. In the second appraisal, the employee ‘rates’ her performance in relation to her basic functions and deliverables, apart from appraising her own quality of work and job proficiency. The ‘rating’ however is not so much in terms of degree, numerical or amplitude targets as an indication of positive or negative growth and development. It is helpful to use standard forms for assisting the smooth introduction and administration of the appraisal process. During numerous implementation assignments, we have observed that an integral part of any successful appraisal process is a trained Manager who contributes to the maintenance of the right attitude and assists the employee in developing a workable strategy for improvement and growth. While a well crafted appraisal system incorporates assessment in terms of sustenance, maintenance, growth and development aspects, it also includes in-built mechanisms to evaluate innovation, creativity and special contributions. A number of complex psychological parameters can also be added but the primary focus should be to improve performance, enrich job content and assist in an inclusive growth of both individual and organization. Gurdeep S. Hora is the Managing Director of Synergy Consultants, a leading Executive Search and Management Consulting organization of India, established in 1989. With over 20 years experience in India and a decade abroad in many countries at the CEO level, he is recognized as an eminent Management Consultant in the areas of Talent acquisition, development and retention and Performance Enhancement. Mr. Hora had his first degree in Electronics Engineer ing from the IIT, follow ed by Post Gr aduation in Business Management, and also in Company Law, all from Delhi. He can be reached at gshora@synergyindia.com

MANAGING TALENT

Does an Organization’s Leadership Team Really Affect

Employee Satisfaction? The Kenexa® Research Institute (KRI) evaluated workers’ views of their organisation’s senior leadership team. According to the latest research, an organisation’s senior leadership team has a significant impact on its employees’ overall opinions of the company and engagement levels, which have been linked to both earnings per share and total shareholder return. The data come from an analysis of the WorkTrends™ database, an annual survey of worker opinions conducted by KRI.

he latest results indicate that the global rating of senior leadership as effectiveness is 51%. Employ ees in India (69%), Brazil (59%) and the United States (54%) report the highest ratings of leadership effectiveness followed by those in China (53%) and Canada (52%). Workers in Japan (33%) reported the lowest ratings. Employees’ evaluations of their organisation’s leadership team are driven by the extent to which senior managers gain employees’ confidence through their decisions, actions and communications, keep employees well informed regarding company direction, and are seen as having the ability to deal with the organisation’s challenges. Employees in India view their senior leadership team as effective, if it quickly responds to marketplace opportunities and competitive threats, makes decisions that demonstrate that quality and improvement are top priorities, keeps employees well-informed about organizational issues, strives to serve the interests of multiple stakeholders, and recognises employees for delivering outstanding customer services. For all workers studied, a strong organizational leadership team has a significant impact on its employees’ engagement levels. Employee engagement is the extent to which employees are motivated to contribute to organizational success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organizational goals. Engaged employees favourably rate their pride in their organization, willingness to recommend it as a place to work and their overall job satisfaction. Additionally, employees with positive opinions of their leadership team state a much higher intention to stay with the organization versus those who are dissatisfied. Those 60 • People Matters • March 2010

who favourably rate their leadership teams are also much more likely to have confidence in the organisation’s future and feel that they have a promising future with the company. “These findings reinforce the importance of senior management’s communication with employees. Those teams that demonstrate a strong emphasis on gaining employees’ confidence through their decisions and actions, keep employees well informed regarding company direction, and have the ability to deal with the organisation’s challenges are the teams that will build more highly engaged workforces and outperform their competitors,” said Jack W. Wiley, Ph.D., executive director, Kenexa Research Institute.

Database Overview

A STRONG ORGANIZATIONAL LEADERSHIP TEAM HAS A SIGNIFICANT IMPACT ON ITS EMPLOYEES’ ENGAGEMENT LEVELS

The WorkTrends database is a comprehensive normative database of employee opinions on topics including leadership, employee engagement and customer orientation. In 2009, approximately 10,000 U.S. citizens, and 1,000 individuals in each of the following countries/regions took the WorkTrends survey online: Brazil, Canada, China, France, Germany, India, Italy, Japan, Spain, and the United Kingdom, and 750 individuals in Russia. The Gulf Co-op Council (GCC) countries of the Middle East were also surveyed to a lesser extent due to surveying limitation in that region of the world. The GCC countries include the Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Oman and Kuwait. Altogether, 21,920 employees were surveyed in 2009.

Study Details The WorkTrends survey questions w ere designed specifically to evaluate how workers view their senior managers. The questions asked were: • Senior management gives employees a clear picture of the direction the company is headed. • I have confidence in my company’s senior leaders. • Senior management at my company has the ability to deal with the challenges we face. Opinion items were rated using a 5-point Likert-like scale. The percentage favourable is the percentage of employees who chose either of the two most positive answers (typically “strongly agree” or “agree”).

MANAGING TALENT Survey Results Employees’ evaluations of their organisation’s leadership team are driven by the extent to which senior managers gain employees’ confidence through their decisions, actions and communications, keep employees well informed regarding company direction, and are seen as having the ability to deal with the organisation’s challenges.

Employee Engagement Figure 1: Leadership Effectiveness Index Score in India Leadership Effectiveness

India

Senior management gives employees a clear picture of the direction the company is headed

I have confidence in my company’s senior leaders

Senior management at my company has the ability to deal with the challenges we face

Leadership Effectiveness Index Score

Employee engagement is defined as the extent to which employees are motivated to contribute to organizational success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organizational goals. An engaged employee has pride in, advocates for, is loyal to his/her employer and exerts discretionary effort toward achieving employer goals. The Employee Engagement Index is the average level of agreement for: • I am proud to tell people I work for my company. • Overall, I am extremely satisfied with my company as a place to work. • I would recommend this place to others as a good place to work. • I rarely think about looking for a new job with another company.

Figure 3: Employee Engagement in India Effective Leadership

Note: Values represent percent favourable

Ineffective Leadership

100 90 80

Figure 2: Leadership Effectiveness Index by Country Country

Leadership Effectiveness Index

70 60 50

India

Brazil

United States

China

Canada

Russia

United Arab Emirates

Kuwait

Germany

Qatar

Oman

Bahrain

United Kingdom

France

Saudi Arabia

Spain

Italy

Japan

Global

Employee Engagement Index

Pride

Overall Satisfaction

Advocacy

Retention

About Kenexa provides business solutions for human resources. We help global organisations multiply business success by identifying the best individuals for every job and fostering optimal work environments for every organization. For more than 20 years, Kenexa has studied human behaviour and team dynamics in the workplace, and has developed the software solutions, business processes and expert consulting that help organisations impact positive business outcomes through HR. Kenexa is the only company that offers a comprehensive suite of unified products and services that support the entire employee lifecycle from pre-hire to exit. Media Contact: Jennif er Meyer, Kenexa, 1.612.217.5066, jennifer.meyer@kenexa.com

Note: Values represent percent favourable People Matters • March 2010 • 61

PM COLUMN

THE CONCEPT OF

EVIL

AND THE ACCEPTANCE OF

SHODDINESS “Chalta hai” – The Average Indian BY RAJESHWAR UPADHYAYA

t was dark and the world was surrounded with nothing; there was no beginning and no end either. No sequence, no non-sequence and no fuzzy logic. Or any other for that matter. Only a pervasive, supramundane consciousness . Brahma had come into existence and had birthed Rudra – the howling, raging, impatient one who would not people the world sexually. Even after repeated requests, Rudra wanted to do nothing with creation and peopling the world. This purile but pregnant desire of Brahma left him sour. He went away to the bottom of the sea to create the world meditatively. On his return, he found Brahma is a sexual embrace with his own daughter, Satarupa. And the world was already peopled. Sexually. Angered by this permanent pollution, Rudra had cut off Brahma’s fifth head in an Oedipal variation, and left in contempt. By now the cosmos was already hierarchically arranged. At the top of the heap was Brahma and both Vishnu and Shiva, created by him formed a holy trinity. In the scheme of things the Gods like Varuna, Indra, Kumera, Agni came next, followed by semi-gods like Nagas, Apsaras, etc. Below them was arranged the rakshas (or the demons like the asuras, ganas, etc). Man came last. He was at the bottom of the cosmic pyramid. But his potential was

62 • People Matters • March 2010

great. He could become the rishi who had an access to truth, to the nature of reality as it existed in all three periods of time – as a transcendental abiding, undifferentiated. He could become powerful in his own right and manifest the divinity that he essentially was. In fact he could curse the gods and his curse would come true. Inherent in the hierarchy was a mechanism to subvert it by merely increasing your divinity. The point in this cosmic hierarchy is dual. One is hierarchy itself. India is a hierarchical society and this orientation has, apart from social reasons, a mythological mooring. Therefore it is there, in my view, to stay. The second being

MY BELIEF IS, 420 MILLION PEOPLE IN INDIA BOUGHT INTO THE GANDHIAN ARGUMENT BECAUSE AT A DEEPER LEVEL IN THE PSYCHE, IT RESONATED WITH OUR WORLDVIEW

PM COLUMN the concept of evil. In the trinity, all Good in the cosmos flows from Vishnu and all Evil from Shiva. Whenever the quantum of evil in society rises irreversibly and good subsides to abysmal levels, V ishnu will take birth as an Avatar and with his incredible power, skill and dexterity defeat evil in a very public battle and restore cosmic equilibrium until next time. Nine such interventions have happened. The tenth is due but not in a hurry. There is plenty of degeneration left. This is a pertinent narrative. It points to certain ideas of sin and evil. There are thus three principles: One, both Good and evil have a divine origin. Two, the purpose of evil is to facilitate the triumph of the Good and three, finally the Good will triumph. Upon this cosmic principle is the Indian ethos substantially based. This has made us resilient to the idea of evil and tolerant of it, almost to the point of apathy. Therefore, all evil is evil only to the extent you cannot see the good in it. Tolerance of evil is a virtue, intolerance is not. Intolerance comes from a myopic perspective. In fact all of mankind is just working out its karmic baggage, and the evil dooer too, until he realises his essential divinity and filps over to the good. One must wait until it happens. For it finally will. A historical example will bear this out. Under colonial rule, Gandhi had fought with the moral imperative on his side. No, the British were not evil. They were merely an alternative perspective to the good. By making them realise their fallacious moral ground, it was possible to neutralise them. No not hatred. Not ev en anger. Just pure tolerance. Suffering. ‘to fight against their anger not to provoke it.’ ‘I am willing to die for my cause but I am not willing to kill for it’. The idea was to fight against the unfairness and their inhumanity by appealing to their higher selves, through nonviolence, suffering, even love in response to hatred. My belief is, 420 million people in India bought into the Gandhian argument because at a deeper level in the psyche, it resonated with our worldview. While this provides a resilient philosophic substratum towards the larger issues in life, its everyday implications are not so flattering. After all, what does it mean to tolerate, to accept, to be patient with what is on grounds that it cannot but be. Our orientation towards products and services that are ok by ‘indian standards ’; that are in the scheme of things ‘chalta hai,’ is quite pathological. Any airport, railway station, road, hospital, public place holds testimony to this apathy. If it was not for private initiative driven by a ‘profit’ motive, you would see more of this. As the peak of

the Indian economic pyramid in shopping malls, or some recently constructed airports you might see a more concerned approach. Scratch the surface and you will notice it is driven by a desire for personal security. The overwhelming secondary experience of poverty, leads those outside it to try harder to stay away from it. I am saying quality is not the purpose of the efforts. It is a consequence of wanting to escape poverty on a sustained basis. Our tolerance of mediocrity also comes from the need to tolerate incompetence in others. The worldview lends the idea that karma locates people in their positions of optimality and everyone is where he or she should be. Our chance meetings are not chance. There are no accidents. So my colleagues, subordinates are all in an overarching web of karmic connections. Coupled with the social reality of collectivism and a feudal ethos (hierarchy orientation), this subliminal influence allows us to accept even tolerate mediocrity. One large Indian multi-national I worked for, applied the Bell Curve to employee performance. A GE returned enthusiastic HR Head swore to improve the world. A certain number of people were to be sacked. The promoters intervened, quoting; if your son were to do poorly would you sack him? If he deviated from the high moral path, would you abandon him? The matter was set to rest. As the boss (read feudal lord) you owe it to your subordinates to protect them, to take care of them. And you will do so in return for loyalty. A loyal under-performer is preferred to the uncommitted star performer who will move once a better opportunity presented itself. Between a star performer and a mediocre loyal performer, really, there is no dilemma. Thus y ou will end up hiding under-productivity in the system, at the collective level. One final, but generic comment: This virtue of the vast latitudes of tolerance, has come under tremendous pressure in the context of national terrorism. The world watched with astonishment at the sheer incapacity of the police force to deal with an eventuality. Under-prepared, poorly trained, ill-equipped, leaderless, indecisive, and hesitant there was an inability to perform right. For a thousand years drones of invaders from the west had ravaged the landscapes of Northern India. It ought not to have been a surprise. But our muted response, bordering on apathy has a deeper reason. Our ‘weltanschuuang’.

THIS VIRTUE OF THE VAST LATITUDES OF TOLERANCE, HAS COME UNDER TREMENDOUS PRESSURE IN THE CONTEXT OF NATIONAL TERRORISM. THE WORLD WATCHEDWITH ASTONISHMENT AT THE SHEER INCAPACITY OF THE POLICE FORCE TO DEAL WITH AN EVENTUALITY

Rajeshwar Upadhyaya is a Leadership and CEO Coach with Par Excellence, visiting faculty in Indian School of Business. He can be contacted at rajeshwar@parexcellence.org

People Matters • March 2010 • 63

KNOWLEDGE & NETWORKING P

reparing For a Career in HRM was a program organized by EFI (Employer’s Federation on India) for young human r esource managers in Mumbai on 8th January 2010. The program was designed for the young HR professionals who are just about to enter this field or have been there for 1 to 5 years. The seminar addressed the knowledge areas that are very important for a good entry and sustained success in this field. The speakers were HR and management professionals with a rich experience and expertise in the field, they shared their experiences and endow participants with experience based knowledge.

ith the objective of preparing Managers to deal with com pensation challenges in 2010, People Matters organized a special Total Rewar ds Concla ve on 21st January 2010 and 17th February 2010 in Gurgaon and Mumbai respectively. There were more than 220 delegates and 30 speakers and moderators from all walks of life, providing a forum of exchange of ideas for HR practioners and business leaders across industries. The event had a series of panel discussions, technical sessions and case studies. The aim of the event was to prepare HR managers to deal with compensation challenges in 2010, to get Insights into trends in Total Rewards across industries ,to get in-depth understanding on the various elements of Total Rewards: Compensation structuring, Taxation, Benefits, C areer development, Work-life balance practice etc and to learn how to maximize the impact of such programs in your organization.

he Indian HR Conv ention 2009 by Tack yon, was on “Determining Solutions For Challenging Times & Changing Expec tations ”. The event talked about re-aligning strategic and operational HRM to meet higher targets and drive business success. The event had round table discussions and addressed the key learnings from the current economic downturn, new mantras of talent management, business strategy and its impact to HRM function.

ompensation & Rewards Summit, organized by AIMA on 8th and 9th January 2010 talked about the crucial role played by compensation and rewards in ever changing global business landscape. Among the summit directors were Mr V C Agrawal, Director-HR, Indian Oil Corporation Ltd and Mr Sudhir V Sohoni, Executive Vice President (HR, IR & Admn & Member - Executive Council), Thermax Ltd. The discussions during the event revolved around getting and retaining the right talent in the cutthroat competitive world of business as this is the only solution to the multifaceted challenges.

th Annual Convention was organized by ERA (Employer’s Feder a tion Association) on 15th and 16th January in Mumbai. The theme of the annual conven tion was “Magnetic India : En terprising Indian Talent”. T he event talked ab out recruitment str ategies, measur ing employee performance & productivity or building high performance leadership teams, HR challenges / opportunities in sunrise industries and changing role of HR in today’s context.

nical competence module was to equip HR Practitioners and students with the knowledge and skills in effectively implementing performance management systems. The program also discussed various methods of performance appraisal, process and documentation of performance appraisal, performance counselling, mentoring and executive coaching and many more aspects of PMS.

chool of Inspired L eadership (SOIL) hosted the ‘Inspir ed Leader ship’ Conference 2010 from January 29 to 30, 2010 at their campus in Gurgaon. The theme for the conference was to bring together a microcosm of c ountr y’s leaders from various areas including Business, Government and Education. The event attracted more than 100 participants from all walks of life: leading corporate firms, NGOs, students, academicians. The core objective of the conference and the workshop focused on key themes such as a) What are the new conversations that we need to build in ourselves: Charac ter, competence and the enthusiasm of inspired leadership? b) How can we channel our own gifts to build organizations of consequence? c) What can be done to take responsibility now?

orld HRD Congress 2010 held at Mumbai on 11th to 13th Febru ary 2010, aimed at The New HR Challenge : Innovative Talent Stra tegies for Tough Times . The event focused on e xecutiv e level retreat in which participants reviewed Evolving Trends in HRM that could change their paradigm on leading people at work. It provided an opportunity to acquire skills to maximize competencies and become a more knowledgeable contributor in the organization. Besides networking opportunities, the conference offered unique in-depth approaches to understanding important workplace issues that affect an organization’s viability in today’s fast-paced business environment. Some of the sub themes of the two day event were innovation, strategic HRM, coaching and mentoring, talent management and employer branding.

he Kenexa Bangalore HR Exchange Forum conducted on 22nd January unveiled the latest trends in the Indian HR space, and provide a platform for mutual learning and knowledge sharing. Some of the key issues discussed during the event were Challenges of the New HR, Driving Success through Performance Excellence and Employee Engagement and Holistic HR for Strategic Business Partnering. The presentations focused on world-class practices and examples of the important role HR plays in any organization.

ational HRD Network and NHRDN Chennai Chapter conducted the workshop on Linking Employee Performance to Business Growth on 13th February 2020. The objective of this functional tech-

68 • People Matters • March 2010

onfederation of Indian Industry organized a one day interactive workshop on “IR I ssues for HR Managers” on 24 February 2010, Bangalore. The event threw some light on the series of Industrial Relations (IR) concerns that the Industry and Government have been facing over the past few months. The sessions at workshop addressed issues such as, Legal Aspects of IR, Is HR ready to handle IR with changing scenario, Emerging differences in IR, How to resolve differences / conflicts effectively, S implifying IR Documentation and some c ase discussions.

People Matters will keep coming up with such conclaves and training programs, to have more details on events and trainings please visit www.peoplematters.in or please emailRekha Choudhary at rekha.c@peoplematters.in

UPCOMING EVENTS Events

Dates

Location

Offered By

Igniting the Spirit of Entrepreneurship

4 March 10

New Delhi

AIMA (All India Management Association)

Third Global Emotional Intelligence And Leadership Forum

5 March 10

Mumbai

FEIL (Forum for Emotional Intelligence) and TISS (Tata Institute of Social Sciences)

People Funda

9 March 10

Hyderabad

ERA (Executive Recruiters Association)

National Campus Recruiters Conclave

11 March 10

Mumbai

HR Nexus

An Appreciation of Culture Based HR Strategy

13 March 10

Pune

National HRD

Recruitment Summit

15 April 10

New Delhi

People Matters

Note: Please note that this list is not exhaustive. We update this information on a regular basis. Please visit our website www.peoplematters.in/ events for more information on events. If you wish to share information about upcoming events, please email Rekha Choudhary at rekha.c@peoplematters.in

TRAINING PROGRAMS People Matters aim to bring updated information about training programme available in the areas of Leadership and People Management. This is not an exhaustive list and we are always on the look out for outstanding programs, please mail us at editorial@peoplematters.in to share more learning opportunities with the rest of the readers. Training Program

Dates

Location

Offered By

Intensive Coach Training

4-6 March 10

Bangalore

Public Program Training

Project Management Classes

4-7 March 10

New Delhi

AstroWix India Project Solutions Pvt. Ltd.

Quantitative Methods for HR

19-21 March 10

Gurgaon

People Matters

Benchmark Six Sigma Green Belt Training

24-27 March 10

Hyderabad

Benchmark Six Sigma

Communication Skills

25-26 March 10

Delhi

DOOR Training

Train the Trainer

25-27 March 10

New Delhi

Dale Carnegie Training

Quantitative Methods for HR

26-28 March 10

Mumbai

People Matters

Situational Leadership II Train The Trainers

12-16 April 10

Delhi

Blanchard International India

Crucial Conversations

22-23 April 10

Mumbai

Blanchard International India

Companies who wish to enlist their training programs or advertise with us may contact Rahul Singh at

rahul.singh@peoplematters.in or call +91 (0) 124 4304133 People Matters â&#x20AC;˘ March 2010 â&#x20AC;˘ 69

Bet on L&D to

Save the Day Organizations in India are yet to recognize that L&D can emerge as a true strategic partner and can be designed as a function that can contribute to the sustainability of the organization BY SUDAKSHINA BASAK

&D is an integral part of the employee’s growth process within any organization, which in medium and long term contributes immensely to the evolution of the organization itself. In India though L&D is considered as an essential element of employeegrooming, it has been observed empirically that among all other HR processes, this particular segment does not always get its required share of attention.

Key Challenges in India In India, L&D teams are faced with the up heal task of demonstrating direct value to the business. Here training has been considered as a mechanism that imparts limited efficacy, whereas development processes by nature are time-consuming and are difficult to evaluate. Organizations are often cynical about the L&D function as it does not readily generate tangible value and people tend to miss out how the function can actually create sustainable and long term growth for the organization. We have identified a few challenges for the L&D function in India. They are: Recognition as Strategic Partner: The training function in India faces the biggest challenge of acceptance as a facilitator for growth of an organization. It has to be recognized as a strategic partner and a function that can contribute to the sustainability of the organization, says Cavita Mehra, Founder and Managing Directors, Mindskillz. Lack of funds: The budget constraint is so severe that there is enough ground to doubt the basic intention of providing requisite training to the employees. Says Anila Rattan, Managing Director, IKH, “everyone claims an understanding of the importance of training. However only a few are willing to put money behind that belief ”. The fact is that the companies are always looking at aspect of economic viability while deciding on L&D activities. According to Lovely Kumar, Vice President, IKH, “L&D is typically not high priority. All organizations claim that their employees need L&D. But the question they are actually grap72 • People Matters • March 2010

pling with is if it makes economic sense to invest in employees especially with the level of job mobility.” The traditional mindset of organizations still does not allow them to visualize training as a facilitator of organization’s own growth process. Intangible results involving long gestation lag: As compared to other HR activities, training is a continuous process and involves substantial gestation lag where result are not immediately comprehended. “Training and Development teams are struggling to demonstrate direct value to the business. Besides recruitment and rewards, it suffers the same fate as the other HR processes in showing tangible value to the business,” says Mohinish Sinha, President, iDiscoveri. According to Consultree “While most other HR processes are more focused on the here and now, L&D has the unique mission of creating leaders for tomorrow, with the existing resources today. Howev er, talent development has to work closely with talent acquisition and talent management to make a difference. Unless competencies are accurately identified for each critical role, it becomes difficult to recruit right, leading to challenges later on. This is where L&D could work closely with other HR processes.” Companies also need to consider that training could not be a panacea expected to resolve all pro-

WHILE MOST OTHER HR PROCESSES ARE MORE FOCUSED ON THE HERE AND NOW, L&D HAS THE UNIQUE MISSION OF CREATING LEADERS FOR TOMORROW,WITH THE EXISTING RESOURCES TODAY

ductivity issues. Some challenges are best handled by reviewing processes and policies of the organization as well, Consultree points out.

Relevance in Post-crisis Scenario L&D has been one of the worst affected components of shrinking corporate budget during the recent economic downturn. It is very difficult to quantify the percentage of the impact as in India L&D data is not tracked accurately and from the budgeting perspective, the training budget is a subset of the HR Budget and hence difficult to track in companies’ financial statements. According to Pallavi Jha, the Executive Chairman of Walchand TalentFirst, “The downturn resulted in slowing of recruitment, rationalization of workforces and a stronger focus on revenue growth.” Around 90% of companies have reduced L&D budgets, according to Consultree. Chandresh Dhebar, Founder and CEO, HR Advisory Services opines “The downturn has really impacted the L&D budgets of most organization. In my personal view, the L&D domain is in “LIFO” category of the budget – i.e. Last In First Out.” The silver lining was that some of the companies understood the fact that amidst the severe economic crisis, their employees will not be able to perform with their usual flair unless some additional skill set is offered to them in the form of L&D. Companies began investing more on building the leadership pipeline, retaining critical skills workforce while driving measures to reduce operational costs. There was more interest in focused content, crisper design and methodologies that focused on direct business relevance and measurable ROI. According to the 2009 Corporate Issues Survey, published in the United States by Ken Blanchard Companies, only 17% of the respondents stated that they planned to spend significantly less money on L&D in 2009 compared to 2008, and almost half (49%) of respondents stated that they planned to spend the same or more on training in 2009 in comparison to 2008. This data may indicate that organizations recognize the strategic value and competitive advantage in connection to training and developing people. It is imperative to keep in mind that there are certain training interventions which are needed to be carried regardless of the status of economic condition. According to Chandresh Dhebar, HR Advisory Services, some initiatives should always be priority for the organizations, which include, client retention, hunting & mining skills, new and innovative offerings, etc; employee efficiency and effectiveness; organizational environment

management in terms of stress management, aspirations management, best talent retention, aligning, conflict management, bad news delivery management etc; stake holders relationship management; innovative thinking and execution frameworks and trust building (with self, team, organization) and side stepping the negative dynamics. According to Consultree, besides the Regulatory and statutory workshops e.g. AML and KYC, IRDA / AMFI licensing training, training stipulated by regulators like RBI, TRAI, SEBI, companies should also maintain training in Sales, Team Building and Change Management. Experts believe that 2010 will be a better year for training and allied activities and the focus will be on training initiatives with measurable business impact. This is where the training teams would have to justify investment in these activities under such trying times. Pallavi Jha, Walchand TalentFirst, believes that “In 2010, we see improvement in hiring and with opportunities opening, companies are focused on retaining their best talent. Employee engagement interventions are increasing. Effective communication training ranging from business communication to media training is a critical growth area. Leadership training will continue to be a big demand area as this has now percolated down from top to middle managers in organizations. Further people are now looking for the certainty of proven approaches which will ensure measurable results.”

EXPERTS BELIEVE THAT 2010 WILL BE A BETTER YEAR FOR TRAINING AND ALLIED ACTIVITIES ANDTHE FOCUS WILL BE ON TRAINING INITIATIVES WITH MEASURABLE BUSINESS IMPACT

Calculating ROI of Training

There is no denying the fact that organizations would like to be able to measure the costs invested in training initiatives against anticipated results. One of the most elusive but sought-after objectives of organizations is to determine return on investment that unveils how much impact a training program has on an organization. Given the continuously changing business environment, the technology, the competition and the expectations of clients are even more challenging. There are several methodologies available to quantify results and measure ROI of training. According to Cavita Mehra, Mindskillz maintains that “measuring the effectiveness of training programs consumes valuable time and resources...companies will have to gather data pertaining to the training need pre and post training and then a detailed analysis needs to be done. This will result in a quantifiable result to display the ROI.” According to Anila Rattan, IKH “Trainers who appreciate business can create a ROI on even behaviorial topics. Eg. Time management as a topic can be theoretical if we do not underPeople Matters • March 2010 • 73

in terms of employee skill enhancement and business stand and are unable to state that the cost of a delay by 2 growth. In a way, companies need to look at a wide gamut hrs means loss of revenue of Rs 1 Lakh.” of specifications before collaborating with training providThere can be a four-step process for measuring the ers. We believe that one of the most important prerequisavings that training provides and comparing it to the costs. site for selecting a training provider is that he/she must First calculate the cost of training including facilitator understand the outcome expected by the organization and fees, training design, course materials, videos and workwhat is its basic intention behind offering training to a parbooks, facilities rental, equipment rentals, production downticular subset of employees. “Right selection of training time (including employee time off the job), providers is a function of credentials, capability and acvideoconferencing facilities, specialized computer equipcountability,” says Pallavi Jha, Walchand TalentFirst. ment and administration (such as registration procedures To make matter simplified, we can identify certain core or confirmation notices). All the relevant costs, divided by pointers which much be checked and verified before sethe anticipated number of participants, gives the cost per lecting the training providers for your organization. Firstly, participant. the training provider assigned for the task must fully unSecondly, the potential savings accruing from the L&D derstand the training objectives. As Cavita Mehra, programme need to be determined, that includes, fewer Mindskillz prefers to put it, “A training provider has to be errors, reduced customer turnover, less equipment downlooked as an organization’s partner to success. Hence, time, increased revenue collection, faster equipment startup there has to be an alignment to company’s goals. There time, reduced employee turnover, when turnover is attribshould be an understanding of the busiutable to poor supervision, proper impleness processes and the challenges faced mentation of new customer strategies, by the organization to be able to relate higher workplace morale through more to the participants and their issues.” Seceffective management practices, less ondly, the L&D team must decide whether time lost to grievance hearings and work the training is set at the right level for stoppages because of ineffective superthose in the business. Thirdly, the relvision, reduced recruitment costs (beevant persons in the organization must cause training can create more job-ready also check whether the training lead to candidates for promotions) and maxian accreditation or qualificat ion. mized productivity of new employees Fourthly, one needs to verify whether through efficient orientation training. the provider has prior experience in Thirdly, to calculate potential savings, dealing with the sector and businesses goals are set for post-training achievein which the company is involved. As ments by identifying and quantifying the training is a crucial means to empower changes a training initiative will produce - PALLAVI JHA, the employees and meet the medium if all other factors are constant. The facWALCHAND TALENTFIRST and long term business needs of orgators include, current level of perfornization, budget for the same must be mance, identifying the change that trainexhausted in the most optimized way. ing can produce, calculating the savings According to Chandresh Dhebar, HR Advisory Services, that the target criteria will generate, identifying a meaning“many organizations are following the “Train The Trainful time line for realizing savings, based on best business ers” route to achieve the L&D by developing internal repredictions about factors contributing to errors remaining sources. This is a good strategy so long as the internal unchanged. trainers are matured, experienced and committed to the Finally, one should compare the cost to savings. For desired objectives of the teaching”. For Mohinish Sinha, this, one must multiply the cost per participant by the total iDiscoveri, what counts is the ability demonstrate that number of participants; multiply the savings per particithe training investment counts. We showcase our tools pant by the total number of participants; compare the figthat bring repeatable results, showcase the understandures to establish business case (economic viability) for ing of the conditions needed to make the training investtraining. ments count and finally demonstrate our facilitators who The above exercise not only identifies actual costs and bring a background of managing business in global envirealistic savings but also ensures that training expectaronments. tions of an organization are reasonable and targeted to Above all, select those training providers who work measurable business outcomes. together as partners for achieving the desired outcomes, rather than just deliver training. In other words, “best trainHold the Right Hand! ing providers are those that offer ROI – based training While choosing a training provider, any organization solutions”, says Pallavi Jha, Walchand TalentFirst. first must look for a trainer/s who fully meets the needs of the business. Hence the logical way is to first remind what Sudakshina Basak is Senior Editor in People Matters the organization wants to achieve through the training both

“RIGHT SELECTION OF TRAINING PROVIDERS IS A FUNCTION OF CREDENTIALS, CAPABILITY AND ACCOUNTABILITY”

74 • People Matters • March 2010

Successful Training Initiatives Require

A Thinking CEO People Matters in conversation with Yogesh Sood, Managing Director, Blanchard International India about the challenges of L&D function in India and the ways to overcome them

hat are the challenges faced by the training and development teams in Indian companies? How are they different from other HR processes?

The main challenge for the L&D function, faced in India, is the integration of learning interventions with the business objectives and putting that into strategic focus along with the organization goals. For some industries, like BPO and insurance, training is an integral part of the job per se; in those industries you can see a clear linkage between manpower planning and training & development. However, for majority of industries training happens either as a result of a performance appraisal process that opens up some gap areas for the individual to develop or as a result of an initiative of a particular leader who feels that a specific person in the team needs to be groomed in a particular area. Furthermore, most of the training focuses on functional competencies; not many see the importance of focusing on behavioural competencies in the lower lev els. On the contrary, they focus on developing those competencies in the higher levels, a strategy which is a bit too late to implement by that time. Finally, in Asia, we have seen there is also a cultural aspect involved, where team members generally do not challenge the leader. In the process, what transpires is that even if the leader is making a mistake nobody challenges, generating behavioural in competencies. Even though, companies are increasingly looking at competencybased training programmes to suit their business objectives, focusing to create reward programs around it and planning learning and coaching interventions, the main challenge is still the execution. Companies are initiating training that are more need based. And this is where the L&D function differs from the rest of HR functions which 76 â&#x20AC;˘ People Matters â&#x20AC;˘ March 2010

YOGESH SOOD

are more integrated in nature, more documented and often more than just the learning processes.

What has been your experience of the impact of downsizing the training and development budgets in Indian companies? How do you expect the year 2010 to unfold in terms of bringing in focus and investment on training and development? We have observ ed many companies drastically cutting their training and development budgets in India, say, by more than 60%. We hav e also experienced a shift in what those budgets were used for, as well as in the amount of proportional investment available for training, coaching and other interventions. Clients are also increasingly

requesting for interventions that will help them in growing the business. Here companies like ours’ had an advantage as our products are all research driven and their results have been proven over the years. Interestingly, our global study shows an increase of 30% of training budgets when we look at the global figures, and that positive surge went into developing skills like crisis management, and combating uncertainty and change.

Can you please identify those training initiatives that should be maintained regardless of the economic condition? During these uncertain times, training in areas of change & adversity management and emotional intelligence are absolutely essential and should be maintained regardless of the existing economic condition. These characteristics are key to maintain the level of engagement, commitment and team work which would motivate the employees to cumulatively work towards the goals of the organization.

Most organizations would like to be able to measure the costs invested in training initiatives against anticipated results. How can companies quantify results and measure Return of Investment (ROI) of training?

you can monitor those behaviours with internal surveys and assessments, you will be able to witness the direct results. I will give you one classical example. Dain M. Hancock, President, Lockheed Martin Aeronautics once said that “crucial conversations” training program from VitalSmarts helped them win the largest contract in the history of aviation. The reason was that they were able to change their behaviours and work together to achieve their results. They were not trained to get the contract, but as a part of the training they were endowed with skills and techniques aimed at creating the right behaviour, thus helping them in getting those contracts. So the core point is to be able to identify organizational goals, pin point the behaviours that will help in attaining these goals and monitor whether your organization is motivating and rewarding those behaviours.

DURINGTHE UNCERTAIN TIMES, TRAINING IN AREAS OF CHANGE & ADVERSITY MANAGEMENT AND EMOTIONAL INTELLIGENCE ARE ABSOLUTELY ESSENTIAL AND SHOULD BE MAINTAINED REGARDLESS OF THE EXISTING ECONOMIC CONDITION

ROI on training is a vague area. You can measure it into different ways; one is in the form of tangible outcomes like sales that gives you short term results, whereas second part looks at the behavioural changes that will give you mid and long terms results. We believe that any result you are looking at is a direct outcome of the behaviour that you are displaying. For example, if you do a cultural survey and you find that people are not working together etc. these are behavioural dimensions. If you change the behaviours, the output will also change. Problem is how do you measure it? Behavioural modification is difficult to measure but also training is only an intervention and if the culture in the organization is not supporting that change of behaviour then it is even more difficult to measure. I use the analogy of the school, where not only the teachers but also the families at home are responsible for the child’s overall development. The way to measure the impact of training initiatives is to identify which kind of results you are looking at and which kind of behaviours will give you those results. If you can identify and establish that linkage clearly and if

What should companies look for while assessing training providers?

There are a few steps involved in the process, first is the training need analysis; second is selecting the training partner; third is conducting the training itself and finally evaluating the training process. This should be the ideal process. What transpires in reality is a bit different though. What companies tend to do is to derive the output from the performance management process and they tend to cluster people and that is the way that training need analysis is done. Ideally, training should be de-linked to some extent from the performance management process and it has to be an independent process that is aligned to what are the goals of the organization and what competencies will take the organization there. This process requires a thinking CEO, not a thinking HR, as HR alone will never get there. There is clearly a shift to focus on training and development and enhancing internal capabilities. Companies have realized that it should be integral part of the business, initially focusing on functional skills development but increasingly understanding that if there is an issue it may not necessarily be a functional issue but well be a behavioural or cultural issue. Mr. Yogesh Sood is Managing Director, Blanchard Interna tional India. With more than 29 years of corporate experience, out of which 16 years have been invested in “people development” across various le vels and cross-section of industries. He can be reached at yogesh@blanchardinternational.co.in

People Matters • March 2010 • 77

Learn-ability Matters

Effectiveness of

Learning Initiatives BY LINNET FURTADO & JITHESH ANAND

Learning is a treasure that will follow its owner everywhere. - Chinese Proverb If you travel forward in time and peer at an organization 10 years hence (something we like to call ‘Organization version 2.0’) and you look at how workplace learning is being supported by that organization, what will you see? … • Firstly, in organization 2.0, a large proportion of employees work from home, thanks to technologies such as Cisco TelePresence. • Secondly, most learning is pull-based; employees are ‘responsible’ for their own work and requisite learning, even though push-learning still exists. • Finally, learning departments are small and are known as performance support units, whereby they ensure performance by providing frameworks, systems and content through pod casts, videos, etc. Every user of the system is a content generator and consumer; the system and its interface only act as an intermediary. Let us now take off these futuristic glasses and add some caution: Even in future, only a few organizations would be a true and complete embodiment of ‘Organization 2.0’. So we will continue to see Instructor Led Training, e-Learning courses, whereas organizations would still have large L&D departments that create and deliver push-learning. As often said, in predicting the future you could be “directionally right but specifically wrong”. We hope this one is at least directionally correct. Globalization of trade and liberalization of business is racing ahead at a scorching pace. All organizations need to reduce production costs and improve operational efficiency. Organizations need to develop their human capital by identifying their insufficiency and lack of knowledge, and thereby providing sufficient learning and development programs to fill the gaps. An effective learning program is emerging as one of the most vibrant and exhilarating drivers for firms to solve their managerial and human resource issues, and thereby gain competitive advantage in the market. But companies don’t always evaluate the business impact of a learning program. 78 • People Matters • March 2010

LEARNING IS FUN. EFFECTIVE LEARNING PROGRAMS HAVE EMERGED AS ONE OF THE MOST VIBRANT AND VIABLE DRIVERS FOR FIRMS TO SOLVE THEIR MANAGERIAL AND HUMAN RESOURCE ISSUES Why Learning Initiatives Fail? The great training robbery Around 72% of delegates at a British Learning Association’s conference in 2006 agreed that learning initiatives tend not to lead to any significant change. Only 51% of delegates said they evaluate for results several months post-learning intervention. David Wolfson, Chairman of the British Training Association commented, “We have to do more - much more - to ensure that learning interventions really make a difference.”

The robbers of learning effectiveness Ambiguity: Concepts are built using shorthand labels rather than the full use of language. Trainees leave with multiple interpretations of concepts, instead of just one. Ignorance of business impact: Learning needs are assumed and not analyzed. Instructional designers do not focus on business outcomes. Personal Influence of Trainers: Trainers train in their own preferred style, ignoring ithe desired style of the trainees, thus creating a hindrance. Superficiality: Learning is aimed at the first level of Kirkpatrick’s Four Levels of Evaluation only. Complexity: Learning is not delivered in chunks that can be internalized by average trainees who fail to remember what they are taught.

Remoteness: Trainers remain aloof from their audience. Dissonance: Theory clashes with practice during the Learning. Trainees do not learn as they feel the concepts are irrelevant for their daily working life.

Can Learning be More Effective? Yes it can be. Explore this….

Learning designs that typically start with, “What are the expected learning outcomes?” tend to miss the point. The first question must be, “What are the expected business outcomes?” followed by, “What change in behaviors must be impacted to arrive at the desired business outcomes?” This is followed by crafting the appropriate nature and timing of reinforcement techniques as well that improve knowledge retention and build skills. The design method can be woven around the following questions: ”What measures do we need to change and reinforce the desired behavior and discourage the undesirable behaviors?” “What processes and policies do we follow that make it impossible for our people to exhibit the desired behavior?” ...and finally “What are the requisite knowledge and skills that will enable our people to exhibit the desired behaviors?”

Improving learning effectiveness improves the bottom line through the following steps: • • • • • • •

Focus on Business Goals Accurate learning needs analysis Appropriate instructional design Relevance and application of learning Timely evaluation of learning Make “investments” in learning and look for measurable returns. Guarantee learning stickiness

How can Learning Effectiveness be Evaluated? The problem for many organizations is not so much why learning should be evaluated but how. Most of the organizations overlook evaluation because financial benefits are difficult to describe in concrete terms. The Kirkpatrick Model The most well-known and used model for measuring the effectiveness, post the learning program, was developed by Donald Kirkpatrick in the late 1950s. In a 2000 study, the American Society for Training and Development (ASTD) reported that only 3% of learning reached Kirkpatrick’s “level 4” of learning ev aluation “re-

sults” where there is an impact on the organization. In contrast, 95% of learning reached “level 1” where the participants liked the learning. The model is still effective in its original form. But Jim Kirkpatrick suggests that it would be useful to consider the following to really reflect Donald Kirkpatrick’s true intent. • The end is the beginning • Return on Expectations (ROE) is the ultimate indicator of value • Business partnership is necessary to bring out positive change • Value must be created before it can be demonstrated • A compelling chain of evidence demonstrates your bottom-line value

How to Make Learning More Effective? Fortunately, there has been more brain research in the last 25 years than in all of human history combined. The triune brain theory has gained a lot of popularity which asserts that we have three separate but interconnected areas of specialization: the neo-cortex, the limbic system and the reptilian brain. To optimize the process of learning, the focus should be to involve the whole mind and the body while engaging our emotions, senses and receptors to integrate and develop new knowledge and skill. The neo-cortex can be engaged through abstract thought, problem solving, forward planning and creativity. The limbic system is involved in bonding and emotions and contains our long-term memory. The reptilian brain governs our automatic functions such as heartbeat and our circulatory systems. By incorporating spaced repetition into learning, we allow for engagement of the reptilian brain. Incorporating these insights into a learning program produces dramatic results. Practice by doing has a retention rate of 75%. If organizations introduced something like a revision test, the potential for a return on learning investment increases by a factor of four. In addition, the learning design must also be able to reinforce positive behaviour and needs to include negative reinforcements to eliminate the undesired behaviour. as much as it includes positive reinforcement for desired behaviour. Recently, InspireOne conducted an interv ention for a manufacturing organization, where another critical element of learning design was used: transference. Participants must be able to transfer what they have learnt from the classroom to the workplace.

Learning is more effective when it is an active rather than a passive process - Kurt Lewin Linnet Furtado is Client Partner-Consulting and Solutions Team Jithesh Anandis Branch Head – Mumbai at InspireOne

People Matters • March 2010 • 79

Think Big... Think Different Budget Constraint – not to hinder L&D initiatives Through MDP, HR has kept in touch with employees more closely, says Praveen Sinha, Chief General Manager - HR, Escorts Ltd

he trigger…it all started in December 2008, when the Indian economy was already facing an un precedented change and uncertainty during the deep downturn and in industries everyone was looking at HR for innovative approach to combat with severe cash and credit crunches, shrinking HR budgets and sinking workforce morale. That is when we in Escorts came out with “no cost / low cost” plan for employee training & development through Management Development Program (MDP) initiative which we implemented successfully. An extract of an internal communication conveyed to all the employees in the company in February 2010 mentioned that: “Management Development Programme is set to get BIGGER in ESCORTS as we cross the 1000 mark in January 2010. More than 1000 participants from executives to DGMs across different functions in all businesses attended MDP since its launch in December 2008. This mark of 1000 resonate interesting statistics of over 50 training programs and 8000 man-hours of trainings.” The challenges facing HR in December 2008 were quite a few including HR participation to ensure more efficient use of cash (identifying different sources of credit, including, outsourcing, in contractual terms, and by combining functions), make the best use of available resources and rethink the HR training budget without compromising on the objectives of training & development. The MDP was launched for 2000 employees with the training budget of approx INR 50,000. Initially we set two objectives for MDP: Spotting Talent to create “Pool of Internal Faculty” and Nurturing Employee Development to boost “Learning Culture” in the organization. Both these initiatives focused on developing in-house capabilities to cascade and sustain training programmes and ignite intellectual and managerial aptitude within the organization. The employee morale, motivation and linking employ80 • People Matters • March 2010

ees to senior management were other challenges which HR had to address. In response to these challenges, we built-in sessions on “Know Your Company” and “Open sessions” in training programs to share with our employees in-depth know-how on organizational growth, restructuring, future business plan and execution. Ideas on efficient operations and allied information were shared by senior level executives including top management team. As part of MDP, several programs on building managerial effectiveness, finance for non-finance (focusing on building business/financial acumen), sales & marketing management (also attended by non-marketing professionals), innovation, lessons in excellence, unleashing learning potential were conducted by our in-house team. In the process, we have created a pool of internal resources comprising of more than ten internal faculty representing different functional areas – line functions/support functions. Through our internal communication to all employees, we acknowledged the immense contributions made by our internal faculty in success of MDP during its journey of one year. We have planned to post communication on our intranet for search of talent for “Internal faculty” for conducting programs where employees with work experience of 3 years & above may apply. We hope to receive a good response! There was also a greater need to bring in some external perspective to the employees and to address this we also hired some external trainers to conduct programs on team building, effective communication, drive & initiatives but this came at a little later stage – only after MDP showed positive movement within the organization. In order to make MDP a transparent initiative, we always shared participants’ feedback on programs and their learning with the top management team. This approach has generated good support of line managers and receiving nominations for MDP programs has never been an

issue. The feedback/overall score of various programs conducted during the last one year, as per the rating of the participants, was above 80. When the business pressure is high (in particular months) or when target meeting is key driver, large MDP programs is held back, however, to remain anchored with employee development activities, Small Group Meeting (SGMs) are conducted in areas like – Lessons in excellence, Innovation and some OD interventions for team building and communication, if required.

Cementing the Bond As HR, we cut costs wisely without compromising on objectives, participated closely with the business in protecting cash during difficult times and combined other functions like production, operations, finance, sales & marketing effectively and meaningfully with HR initiatives.

THE MANTRA IS THINK BIG…THINK DFFERENTLY Since we conduct programs where employees from across all businesses/functions come together to a common learning platform where we encourage lots of interactions and learning through experience sharing, MDP also contributed in making business unit/departmental boundaries more porous to enhance synergy. In addition, through MDP, HR has kept in touch with employees more closely which helps in understanding their overall engagement level necessary to address their needs. Although, we have no statistics available to share as to how much our MDP helped in enhancing employee engagement level during the downturn time, but certainly linking employees to senior management executives helped them remain connected to their commitments to company’s growth plan, execution and implementation challenges, cost compression measures, sales & service priorities, customers demand etc. Taking this further, the MDP agenda for next 6-7 months includes programmes aiming at building managerial effectiveness and would cover a large number of employees. Programs on “Coaching skills”, “Mentoring”, “Managing for Results”, “Art of conversations”, “HR for Line Managers” and Small-Group Meetings (SGMs) on Lessons in Excellence series at the business unit level are some of the highlights. The mantra is Think BIG…Think DFFERENTLY. If we continuously make new rules for getting the right things done and never hide behind BUDGET constraint, we remain in BUSINESS OF HR and effectively play a business partnering role in good times…in difficult time which may call for ‘no cost/low cost’ initiatives with results. Praveen Sinha, Chief General Manager - HR, Escorts Ltd

People Matters • March 2010 • 81

BUYER’S DIRECTORY

Dale Carnegie Training India Founded in 1912, Dale Carnegie Training is a performance-based soft skills training company with offices worldwide. Dale Carnegie Training focuses on giving people in business the opportunity to sharpen their skills and improve their performance in order to build positive, steady, and profitable results. More than 2700 instructors present training programs in more than 25 languages. Approximately 9 million people have completed the training programs worldwide. Dale Carnegie India has offices in Mumbai, Delhi, Pune and Bangalore Buyer’s Profile

Dale Carnegie Training India helps organizations cater to their people development initiatives across functions and levels. Clients of Dale Carnegie come from various industries. Dale Carnegie works with many private sector organizations, Government organizations, PSUs, educational institutes and provides Learning & Development solutions by customising the training delivery to suit the client’s specific needs

Delivery Capabilities

Worldwide more than 2700 trainers conduct workshops in more than 25 languages. In India, Dale Carnegie also delivers training programs in Hindi and other regional languages

Training Specialization

Training areas cover Leadership Development, Interpersonal & Communication skill, Sales Effectiveness, Presentations skill, Customer Service, Executive Coaching, Media Training, Competency Based Development Solutions and E-Learning systems

Other Services

Assessments and Consulting services, Finishing School, Speakerships, Employee Engagement Surveys

Key Differentiators

Dale Carnegie has proven training methodologies and global presence in over 90 countries. Dale Carnegie has trained top 400 of Fortune 500 companies and courses can be made available in local languages as well.

Pricing

Available on request, pricing depends on the client’s requirements

Testimonial

"That's the most important degree that I have" - Warren Buffet

Contact Details

Sanjay Jha, Executive Director, corporate@dalecarnegieindia.com, +91-22-67818113 | www.dalecarnegieindia.com

Ninedots, www.ninedots.in We are a single-source training provider of performance improvement services since 2000, ninedots supports you in gaining a competitive edge. The diverse nature of our offerings reflects the growing needs of our customers and our success in meeting those needs. We help you align your training needs with your business goals and objectives as well as the company’s values and culture. Let us tailor a training program to match your organization’s needs either by adapting an existing program or developing a new one. We can assist with one or more of the steps involved in the development process: consulting, training audit/needs assessment, design & development, implementation and evaluation Our Approach

We are always anticipating the skills leaders will need in the new environment, helping them prepare, not only for their role today, but for the challenges they will face tomorrow

Our Niche Programmes

Debono institute US certificate programmes Six thinking hats & Lateral Thinking, Appreciative Inquiry, Emotional Intelligence, Leadership development series and key note speaking engagements

Competency programmes

Delivered by dynamic facilitators, our professional skills training encompasses an interactive environment focusing on communication through writing, presenting, facilitating, negotiating & influencing. Learn more about our career development training programs on www.ninedots.in

Our Clientele

We maintain an impressive list of clients across most industries. Whether your business sector is Automotive, financial services, retail, software technology, hardware technology, medical services, pharmaceuticals or in another sector.

Contact Details

Jyothi Complex C 3 2nd Floor, 134/1 Infantry road Bangalore 560001 Ph No: +91 080 4205 9999/2286 0346 Mobile: +91 9845546376/+91 9448478147 Email: anand@ninedots.in, shankar@ninedots.in

82 • People Matters • March 2010

VitalSmarts India Based on more than 30 years of international research by our parent company, VitalSmarts’ training solutions teach strategies and skills for driving rapid, sustainable and measurable behaviour change that leads to improvements in engagement, quality, productivity, safety and other key performance indicators Buyer’s Profile

Various Industries including BPO, Construction, Consumer Durables, Entertainment, FMCG, Hospitality, Infrastructure, IT, Manufacturing, Office Automation, Pharmaceutical and Bio Sciences, Telecom. Among several clients: Airtel, Bank of America, Canon, Cargill, Cisco, DSP Merrill Lynch, Dr. Reddy’s, Hotel Leela Palace, L & T, Synopsys, Tata Sky, XL Group

Delivery capabilities

Certified Trainer based in all major metros in India

Training Specialization

Crucial Conversations Training: teaches skills for creating alignment and agreement by fostering open dialogue around high-stakes topics Crucial Confrontation Training: offers a step-by-step process to enhance accountability, improve performance and ensure execution Influencer Training: teaches proven strategies to uproot entrenched habits and drive rapid and sustainable behavior change in individuals, teams and entire organizations

Other Services

VitalSmarts Speakers Bureau, VitalSmarts Consulting Services

Key Differentiators

- VitalSmarts training solutions are based on 30 years of global research and 25000+ hours of observation - Crucial Conversations and Influencer training recognized by Human Resource Executive Magazine for Training Product of the Year 04 & 09 respectively - Produced three immediate New York Times bestsellers, Influencer, Crucial Conversations and Crucial Confrontations, which are available in more 18+ languages - Ranked twice by Inc. magazine as one of the fastest-growing companies in America - Taught more 2+ million people worldwide

Pricing

In House Programs: Will cost in a range of INR 3,00,000 to INR 5,00,000 per program for a batch 20 to 25 people. Public Workshops: costs in a range of INR 20,000 to INR 30,000 per participant

Contact Details

Leadership Consulting Pvt. Ltd. | Tel: +91 124 4040573/74 | www.vitalsmartsindia.com

iDiscoveri iDiscoveri has touched close to 100,000 (15000+ executives) people through its various learning initiatives in education and in corporate. Has worked with 500+ organizations in the last decade. Headquartered at Gurgaon, the organization has a national footprint with offices in Mumbai, Bangalore, Chennai, and Hyderabad. Its management team has international experience with leading global organizations Buyer’s Profile

The organization has worked with teams in large Corporations as well as midsize and small size companies and across nationalities. Our facilitators have worked across diverse sectors- FMCG, ITeS, IT, Manufacturing

Delivery capabilities

Team of 180 people (facilitators/trainers/ curriculum leads and Executive Coaches). The iDiscoveri team includes a family of scholars and practitioners who are drawn from disciplines of cognitive & social psychology, education, and management sciences

Training Specialization

Leadership Skill Development, Team Building Skills, Team Coaching, Change Management & Communication, Executive Coaching

Other Services

- Developing Leadership Curriculum and delivering short leadership program for Corporate Universities - Impacting effectiveness of meetings through live interventions. E.g. Top Management review meeting, Business Review Meeting or any cross functional group meeting - Consulting & Assessment

Key Differentiators

- iDiscoveri programs are designed and delivered by experts who have led business and managed teams at top management levels. - Customized solutions to individual companies/teams - Hands on experience and exposure to International Corporations & global managers/culture/themes

Pricing

Facilitation Fee varies depending on the duration of the intervention, the depth of engagement and outcomes desired by the organization as well as the profile of the team to whom the program is directed. As applicable, we levy per day tuition fee or fee for content. Where ever applicable, there is an intervention fee that is customized for delivering results of the intervention

Referral

Referrals provided on request

Contact Details

Mohinish Sinha, mohinish.sinha@idiscoveri.com, +919811590121 People Matters • March 2010 • 83

Mindskillz – Training Solutions Mindskillz offers a partnership in providing end-to-end training and development solutions through interactive and experiential workshops, tailor made and tested to suit our client’s needs. Since our inception in 2009, we have grown to be a trusted partner par excellence for our clients in developing the most valuable asset of their organization; the human capital. Our trainers come with profound experiences with a distinct flavour of experiential and creative learning methodologies that make our services ideal for the right learning intervention Buyer’s Profile

Mindskillz partners with an active client base across industry verticals: Healthcare, IT/ITES, Manufacturing, Financial services, Government services, Retail and Education

Delivery capabilities

The core training team of Mindskillz comprises of 30 trainers with an average experience of about 10-15 years in the field of learning and development. The presence of trainers in metro cities has enabled cost effective training delivery in about 20 cities nationwide

Training Specialization

Communication skills, team building, leadership, creativity & innovation, sales & negotiation skills, time & stress management, customer service and presentation skills

Other Services

We conduct intensive Workshops and seminars, On-the-job training, Education and Counselling services

Key Differentiators

Apart from service quality and customized program delivery, we conduct pre-training assessments to perfectly match the expectations and skill gaps. We also measure post-training effectiveness through mystery audits to identify and quantify learning implementation

Pricing

Pricing is structured based on the nature of requirements

Contact Details

Cavita Mehra, Managing Director,+91-80-41256949, +91-80-41150189 | cavita@mindskillz.in | For more details visit us at www.mindskillz.in

Consultree Consultree offers comprehensive solutions, to enable clients to achieve their immediate & long term objectives. Strong foundation, seamless process, distinct business resources, that in turn leads to the delivery of products & services Buyer’s Profile

Large and medium corporate clients of all major domains and across industries ( AMCs, Banks, Retail, Life) Insurance students from B schools aspiring for a corporate career

Delivery capabilities

30 trainers across India all with rich exposure to different domains Deliver capabilities across India with trainers in all 7 major locations in India Training centers in Kolkata with plans to expand to 6 other major locations

Training Specialization

Corporate workshops on soft skills, leadership, personal effectiveness, team effectiveness, coaching Helping college students prepare for the corporate world Knowledge Hub – open workshops on soft skills and technical topics

Other Services

Assessing ROI on training initiatives is the biggest concern across the L & D industry globally. Consultree is the first corporate organization in Eastern India to enrol for certification under the ROI Institute of USA. This would help corporate organizations to assess their L & D strategy better and to decide on budgets for L & D more strategically

Key Differentiators

Over two decades of exposure to client servicing in financial domain; Reputed professionals each with over two decades of work experience with reputed MNCs and Indian outfits; Assessing, addressing and reviewing each L & D initiative using data

Pricing

Customized rates depending on nature and extent of the intervention

Contact Details

Shibaji Bose, shibaji@consultree.in, 98300 58814 | Ayan Banerji, ayan@consultree.in, 98743 11126 | www.consultree.in

84 • People Matters • March 2010

Images Knowledge House Pvt. Ltd. People Development for Performance and Profits IKH was founded in April 2008 and is based out of New Delhi. It is a part of the Images group which consists of Images Multimedia-publishers of B2B magazines such as Images Retail, Business of Fashion etc and organizers of forums such as Indian Retail Forum, Indian Fashion Forum etc and IRIS – a research and consultancy company Buyer's Profile

A client base across various sectors such as: - Retail: Swarovski, Mango, Aldo, La Senza, Charles & Keith, Nine West, Pramod, Aldo Accessories, Foresight Optical, Okaidi - Research & Consulting: Wipro Consulting, IRIS, RAMMS India Pvt. Ltd., Intertek, Prometric - Real Estate: Advance India Projects Limited, K Raheja Constructions, Ambuja realty, Brigade group, Mantri group, Prestige group - Durables and Automobiles: Phillips, Whirlpool, Hewlett Packard, Tata Motors - Telecom and investment banking etc

Delivery Capabilities

A core team of 6 with a cumulative experience of 94 years. IKH can execute pan-India assignments

Training Specialization

Instructor led training, Experiential learning & Out bound training. IKH specializes in behavioural skills such as Sales, Customer Service, Leadership, Personality Flexing, Team Building, Time Management, Goal Setting, Stress Management, Communication, Presentation Skills, Change Management, Creativity & Innovation, Young Leaders Development

Other Services

• Customized content development and Train the Trainers • Assessments - Development centres, Psychometric testing through DISC profiling • Coaching • Consulting in the space of people development • Recruitment • Evaluation of training effectiveness through ROI methodology

Key Differentiators

Intellectual capital. Ability to provide synergies in learning and development & research and consultancy. Customized service with quick turnaround time

Pricing

Pricing is dependent on nature of requirements

Contact Details

Anila Rattan, anila@ikh.co.in, 9958445526 | Lovely Kumar, lovely@ikh.co.in, 9958445527 | Website - www.ikh.co.in

HR Advisory Services Pvt. Ltd. HR Advisory Services, Strategic HR Consulting, Executive Coaching and Training. Established in 1995, HR Advisory has created a strong niche in addressing people, performance and productivity areas. The focus is on creating an organization environment where people enjoy, deliver and grow. HR Advisory has a partnership with Table Group Inc, a US based high end consulting company, founded by P atrick Lencioni (author of Five Dysfunctions of a Team among other bestsellers) Buyer’s Profile

Clients across Industries and sizes

Delivery capabilities

We provide our services in India and abroad. With qualified professionals from prestigious schools like IIM, Ahmedabad

Training Specialization

- Top: Trust Building, Minimizing negative dynamics, Coaching, Execution Efficiency, Essentially, we focus on “Top Team Effectiveness” - Middle : Trust Building, Leadership, Stake Holders management, Conflict management. Essentially, we focus on middle manager’s growth - Junior: Followership, Discovering self worth and potential, Aligning, Disagreeing-yet-committing, Essentially, we focus on effective and rewarding beginning of the corporate journey - Across Levels: Potential, Preaching, Practicing and Performing

Other Services

We mix Consulting, Training and Coaching methodologies to add REAL value to the organization. We do not get “detached”. Our proven consulting domains are Performance Management, Trust surveys, Values matching, Discovering individual styles of self and other stake holders and building sustainable relationships through powerful approaches

Key Differentiators

- We believe in “Lose-Win” first. We do not push for our win first. If the client wins in terms of value provided, we would automatically win in long run. Therefore, it will be “Win-W in” in the long run - We easily shift the “depth gears” for different hierarchies

Pricing

Flexible pricing, dependent on nature of requirements

Testimonial

Delighted to provide references on request

Contact Details

Chandresh Dhebar, +91 9810313914, chandresh@hradvisory.net Mitakshi Dhebar, +91 9818620896, mitakshi@hradvisory.net | Website: www.hradvisory.net People Matters • March 2010 • 85