By Rajeshwari Sharma
It was during one of those post interview conversations with a chief executive officer (CEO) of a technology start-up, a provider of technology solutions for micro finance companies, that the importance of preparedness got revalidated yet again. The CEO in question was narrating his experience when he and one of his classmates had scored poorly in mathematics in their senior secondary examinations. Both of them could not get admissions in any of the prestigious colleges because of their low scores. While the CEO got depressed by the fact that he had to study in a middling college and loathed being a part of it, the friend used the time to prepare for engineering entrance examinations. Next year, he got admitted to one of the IITs while the CEO could not. He had to finish another year of Bachelor of Science course half heartedly before he found a seat in a second-rung engineering college. The CEO said his friend had taught him the invaluable lesson of accepting reality, adapting to changes and being prepared for the next opportunity.
Opportunities in adversities: Like people, organizations that are well prepared are better served than those which are not. There are opportunities in adversities and each crisis may have many prospects hidden in them. “Although a slowing global economy is posing organizations with the challenge of surviving and driving tough market environment, it also presents a unique opportunity to turn crisis into a strategy to sustain and drive medium and long-term growth, improve efficiencies and competitiveness,” says Dhananjay Datar, chief executive officer, Impact Systems.
But why is it important to shape the upturn? Simply because organizations have never seen such a fall, says Ganesh Shermon, partner & head of people & change advisory services, KPMG India. “Simply being caught unaware has awakened many to plan factors that have acted as a noose such as infrastructure costs, high cost employees, stock market dependence, valuation driven strategies and supply chain inefficiencies,” says Shermon. “All this now need to be restrategized.”
As we are already seeing early signs of recovery with positive sentiment following the victory of Congress-led UPA electoral win and an economic outlook of 5-6% growth, which puts India in a much better position than any other market, the need of the hour is preparing for the upturn, say HR managers. For India, it continues to be an opportunity, says Joji S. Gil, HR director, Microsoft India. “The question, however, is where will this growth come from,” says Gill. “It’s very important for organizations to understand that the world has changed after the collapse of the world economy and the areas where opportunities existed earlier are not exactly where opportunities will necessarily exist now,” she says.
The world has changed and the way money was managed across the world has undergone a transformation. Businesses will have to now look for new markets and business segments and plan accordingly.
Shaping the upturn: HR leaders say this is the time to improve processes and practices because companies undertook reactionary measures in a high-growth market. Poor planning and strategy have thus led to ad hoc practices and a excesses in the system. “Now is the time to institutionalize many of those ad hoc practices and strengthen good processes,” says Anand Nayak, head of human resource development for ITC Ltd, a multi-business conglomerate with diversified businesses in cigarettes, hotels, specialty papers, packaging, paperboards, agricultural business. “This is the time to evaluate the way we have done things till now… basically question everything we do, look at our fundamentals and see if they are appropriate for the future,” says Nayak. “The key is to see if we can manage business more effectively."
SS Raman
President & CEO, TVS Electronics Ltd
"The good news is that the current business environment is spread across the world and not limited to certain pockets. As such the competitive landscape does not change since it is impacting every one. In a way this is also a window of opportunity to revive and evolve certain strategic actions, which can surprise your competitors. We believe that this is a time for introspecting the way we manage business and make some significant changes which are essential for the current macro-economic situation.
There are a few critical elements which define the essence of our business today.
First and foremost, focussing on “cash” is an essential starting point. Liquidity is by far the most valuable element in the business today. Besides the transactional aspect of managing cash, business leaders have to look for structural correction at this crucial juncture. From a softer aspect this would mean short but effective steps rather than long term thinking.
In the current context, competitiveness assumes more significant view. Besides the value proposition for the customer, it has now more added significance on what additionally we can offer as a bouquet of solutions. From an organizational perspective, this would mean understanding the customer needs and a sense of urgency in addressing the needs. Driving “customer centricity” as an imperative is most appropriate today. The challenge is to retain the customer and at the same time drive growth through mining their requirements.
Shrink the horizon of planning cycle from long term to short and medium term. The year is now quarter and the quarter is the month and we need to build in skill sets and mindset to live and drive business improvement every day.
The focus on cost and quality is virtually an imperative. Again the definition moves from project-oriented engagement to day-to-day essentials. The strides have to be longer and firmer. This means the check points become more stringent.
Management focus requires mentoring and coaching as an essential and urgent attribute in these crucial times. It is no longer about command and control style leadership but about leveraging resources from teams across locations and geographies and getting work done the “right way”.
The organizational value system needs more focus than ever before under the current macroeconomic situations. Well defined and understood value fundamentals will come as a very handy platform for driving change, which is incidentally the need of the hour. Change management can be chaotic since the time horizon and expectations are short.
To sum it up we do believe that this is a challenging time. There are signs of recovery. However, this will certainly change the customer expectations as well as business delivery architecture across industries. The good news is that it is for good and by far more efficient than before. The choice is simple, do the right way or opt out!
Dhananjay Datar
Chief executive officer, Impact Systems Pvt Ltd.
Everyone is concerned about the slowdown. It’s important to ask … Does your organization consider this slowdown as a problem or a strategic business opportunity?
The basic fundamentals of the slowdown in terms of the western world and its effects observed by the global economy have to be addressed by exploring various ways and means to set things in the right perspective. No one would like to lose their business and just wait and watch the revival of economy.
The most challenging task for all businesses is to realize that their role and the implication in order to survive in turbulent times. The bottomline is how do we differentiate and find ways and means to survive and maintain the business. The smart thing would be to rather accept this as an opportunity to shape up for the upturn. India with its enormous human assets has an advantage over others in terms of young demographics, which should be capitalized with a planned objective.
Identifying the critical needs for success by realizing strengths and weaknesses, important action-oriented areas along with futuristic approach towards emerging challenges is the need of the hour. The role of human resources is very critical in terms of any business success by way of developing a work culture, positive attitude along with pushing for better quality to develop India as a brand is highly essential in this slowdown. Managements must insist on establishing good business processes and standards, which will help in having a competitive edge over others when the growth opportunity comes.
The major aspects of our business approach are:
Talent management
Improved performance
To focus on long-term sustainability rather than just short-term profits
To develop a comprehensive and robust business process
Make employees aware that unless we offer a unique proposition, progress will be difficult to come by
Nihar Ranjan Ghosh
Senior vice-president, human resources, retail, RPG Group
The slowdown is actually a blessing in disguise, especially for the retail industry. It has given us time to sit back and take notice of the loopholes in our strategy. The retail industry has been growing at a break neck pace in the last three to four years backed by strong GDP growth and strong economic indicators. And retailers were looking at growing at any cost, almost throwing caution to the wind. So much so that many retailers completely ignored consumer psyche and buying patterns, focused too much in certain pockets and undertook unplanned expansion. Also there were no readily available retail models in India to learn from. The evolution of retail spans some 50 years in the West and in India, we have developed our retail format in less than 5 years.
The market slowdown has allowed us to take a pause, sit back and reassess our strategies. This period is a turning point in retail industry in India as firms redefine their growth plans, focus on geographies and new market segments. How one responds to changes will determine the success of an organization as the economy gets back on the growth track. There are few changes that we are bringing in to prepare for the good times.
Talent evaluation: This is the time to make sure that there are systems and processes in place to make sure that we get the best performance out of our workforce. We have cut headcount to 7,000 from 10,000 after we closed operations in many markets and shut down non-performing stores in active geographies in the last 18-20 months. People are being prepared to strengthen the fundamentals
Cost optimization: Watching costs have never been this critical and like many others, we are looking at driving maximum returns on the investments we are making. In this regard, we also encourage employees for their suggestions on areas where we can reduce costs and maximize returns.
Improving business processes: We are also in talks with one of the big four consulting firms to help us improve all aspects of our business. The objective is to see if our current strategy and positioning is aligned with our business goals; evaluate processes and structures and see if they are geared to support our business needs; where are how can we leverage further growth; assess if we have the right amount of experience and prudence in every area of management; institutionalize our strength areas and learn from the mistakes committed in the past.
Communication strategy: If you implement change without effective communication, you may create an atmosphere of uncertainty and lose some of your best talent. Therefore, it is important that we keep communicating to our employees about changes in the market environment and new expectations at both ends. Also, we believe in having a two-way communication with our internal customers (read employees) so that we don’t remain deprived of their insights.
Rethinking retention: Now is the time to keep the best talent who are aligned with your business goals and replace those you don't. For RPG’s retail business, around 80% of people hired were from other sectors such as fast moving consumer goods, telecommunications and financial services among others. With the downturn, many people started having a lot of doubts on the career growth prospects in the retail industry, especially those who joined from telecommunications and FMCG sectors. There are a lot of employees sitting on the fence. So, we decided to have a transparent, objective and multi-layered evaluation of people by several committees on people to be retained. For the ones we had to let go of, we tried to help by referring them for jobs elsewhere.
Learning and people development: People are being prepared to strengthen the fundamentals of the organization because business objectives can be achieved only through people. RPG has created task forces on training and development. Last fiscal, despite a very tough economic situation, there was zero budget cut. This year, our learning and development budget has been increased by 50% over the last fiscal. We are using this downturn as an opportunity to learn and invest.
HR TOOL BOX
Some of the aspects that need restrategising and attention include:
