One of the challenges that I keep coming across occasionally is that we get too process oriented in dealing with people
The HR curriculum too needs to undergo a change. There should be more education on the financial side of business before they join a company
Managers should go through one round of handling business issues before they move into a line role
The first step for HR professionals wanting to make a career in managing a business is to work through their competencies in finance. Though I had started off my career in HR, circumstances forced me to work with numbers when I founded my own company. Now, I have found my calling in the world of finance and general management, thanks to my transition to entrepreneurship. I liked the change from dealing with softer HR issues to the harder nuts and bolts of numbers and metrics. I seem to have found my comfort zone in that over time. If you ask me to make a choice between analysing a balance sheet and designing a performance appraisal system, I will choose the first.
I first worked as an HR trainee in Godrej & Boyce, then moved on to the Essar group from where I was the only HR manager in India among a group of 12 young managers selected to study on a Chevening scholarship at the Leeds University. I came back and joined as the head of HR in IDFC. That stint widened my interest in the areas of infrastructure lending and finance and in 2000 I founded an HR solutions company called Peopleone Consulting. JP Morgan invested an initial amount of capital in our company and I was the largest shareholder. The company became India’s largest HR services company in four to five years and then we sold it to Adecco in 2004. Since then, there has been no looking back. I finished my obligations of having to stay with them till 2007 and went on to invest in Ikya Human Capital Solutions. (Ajit Isaac took over as Managing Director and Chief Executive Officer of Ikya Human Capital Solutions in 2009). Today, IKYA employs close to 70,000 people, targeted revenues of about Rs 1,400 crore for this year and is the most profitable HR services company in India today.
The transition though exciting was not too simple. I had to constantly improve two aspects of my life. One was the ability to sell. I always thought I could sell pretty well, but I always had to keep reinventing our sales approach. I had to teach myself a few things that I did not know in the past in the area of sales. And secondly in the area of corporate structuring, for example, in terms of how much debt, how much equity, how much free cash flow you are generating, what is the debt service capability etc. It is a continuous learning process and doesn’t stop even for completely trained finance professionals.
Although the understanding of business numbers and sales skills is essential to run the business, my HR experience did come handy in running a business. My understanding of people dynamics of what works for certain people and the need as a business manager to keep people with you, because in reality they are the building blocks on which you are able to create a business structure, helped me a great deal. Today the senior management in Ikya is all internally developed and they are the ones who have been here with the company since its inception. And that I think could not have happened but for the fact that I came from a background of HR and I understood the need of hiring good people, treating them well and ensuring they become successful and therefore they stay with you.
Roadmap to being a business leader
Given the increasing complexity of dealing with the workforce issues, there is a consistent need for companies to hire, retain and manage good HR professionals so I wouldn’t advise anybody into a misadventure of becoming a general management professional overnight unless s/he is really training himself and investing in becoming a general management professional.
If someone consciously wants to become a business manager, then the first thing s/he should learn is understanding the world of finance, balance sheets, cash flows and the need to drive business at a financial level than at an operating level very early on. They should gravitate towards multi-functional roles through career rotation early. It will be beneficial for them to first understand issues such as shop floor dynamics, production, cost of capital, quality, rejection, collections, operating metrics of that type before they start moving to a business role.
The HR curriculum too needs to undergo a change. There should be more education on the financial side of business before they join a company. Most of the HR professionals start learning performance management issues, organization structure issues, employee retention and employee engagement issues without knowing the core metrics of business. Having one or two papers in every semester on finance and operations is a necessary starting point for HR professionals for the future.
If they do these things, they will become more successful human resource professionals first and perhaps in the long term a general management professional as well.
Ajit Isaac, Managing Director and CEO, Ikya Human Capital Solutions
As told to People Matters. Excerpts from this interview were published in the June 2013 issue