HR at an evolutionary threshold
We need to successfully inculcate that fundamental feeling of institutional togetherness, and the idea that an individual’s success is engrained within the success of the organization and the society.
Human Resources (HR) happens to be at an evolutionary threshold right now. Several facts and figures support the fact that the dynamics in which organizations exist, function and grow are changing. Naturally, the way these companies succeed is also changing and so is what business leaders need from their HR function. Picture this: the average life of an S&P 500 company has reduced from 60 years in 1960 to just 12 years today. Furthermore, the average life of a CEO has halved from 10 years in 2010 to 5 years in 2015. And these numbers are not a western phenomena that we need not worry about in India, for they are equally relevant to us. Just note that we have lost 12 airlines in the last 20 years, or to put it another way, one airline shut shop every 16 months. Similarly you can literally count, on your fingertips, the number of CEOs who retained the position for over 4 years.
Another factor that adds into the changing nature of the workplace is that in India the concept of social security does not really exist. As a result, people frequently shift their jobs, even if for a miniscule increment, hoping that they’d be able to build their assets with the surplus. To explain the depth of the problem in India, I would like to classify the current managerial workforce into three categories. The first category, as I would like to call them, the people on ‘Tourist Visa’, who are at entry level positions, with relatively minimal experience. This lot, vary of commitment, chooses between the best of what different organisations offer.
The Middle Level managers, extending to the same analogy, can best be described as the ‘Green Card’ holders, with decent experience, who literally ‘trade’ their skills. But they lack a sense of commitment as well. Their decision-making frame is very self-driven, and they put themselves ahead of the company. It’s a trade-off, as they bring the skills, and they expect to be rewarded accordingly. Both these categories constitute nearly constitute 60-70% of the organisation. The remaining people are the ones that can actually be called ‘Institution Builders’. They put the organisation before themselves. This sense of belongingness and ownership is virtually absent from the other two categories.
As leader of HR, this is our biggest challenge and threat. We need to successfully inculcate that fundamental feeling of institutional togetherness, and the idea that an individual’s success is engrained within the success of the organization and the society.
Middle Management Drought: A Real Threat
Quintessentially, the middle management forms a considerable part of the talent, but they lack the skills or experience expected of them. Typically, someone in the middle management has experience of anywhere between 8 to 15 years. However, because of the virtue of frequent job-shifts, this 10 years worth of experience is sometimes divided among 6 or more organisations. As a result the concept, idea and vision of actually experiencing the ups and down never sets in. They lack the ability to identify failure when it looks them in the middle of the eye, and also lack the skills to transform that failure into success. But, after 10 years of experience, when they are expected to hone and coach the entry level managers, they are colossally lost. Thankfully, during my formative years at Uniliver, some 25 years back, we got really dedicated professionals, who successfully infused us with the right energy and education, which is absent today. Consequently, a weak middle management translates to a weak execution and eventually, the senior management steps into their shoes, thus, operating a level below them. Essentially, this means that the long term vision of the organisation, the macro level policy making takes a beating, and suffers.
These factors are complimentary to each other and together, will land us into a severe crisis, if they haven’t already. Our role, as leaders, would be to identify them beforehand and make corrections.
Another thing that I want to bring to the fore is the concept of Sustainable Value in an organisation. There are two core non-negotiable constituents of sustainable value, namely, people and the competitive offering. The competitive offering is directly dependent on two factors, the product and the cost structure, but it gets complex when you’re dealing with people. People are at the heart of every grand plan and vision that the organisation formulates. But another worrisome trend is that we are not spending enough time and resources investing in building the capabilities of people. The finest example I can give right now is the BPO sector that has thrived in India. The industry did well, because they took the time and resources to build capabilities of each and every one of their employees. They simply had to invest in the way the employee dealt with the customer, partly because of the nature of the job. In another instance, Starbucks shut down one day, years back, for it felt the need to train and educate its staff about making good coffee. How many of us can imagine shutting their departments or offices for as long it takes to fix a problem that concerns the people in the organisation? My point is investment in people is essential. The attrition rate must not scare us from investing in the workforce, as our job is to invest in building capabilities of the people.
The Concept of ‘Volunteerism’
Investing in people brings me to raise another trend I have witnessed in the field. Today’s generation is largely cut-out for volunteering with an organisation for a certain period of time. They are willing to commit two years of their career to your organisation, whether are able to make them stay for the third or not, is up to you. I use the term ‘volunteer’ consciously; as it will help you understand them better. Volunteers that work in the development-sector can be explained in one word: Purpose. Go back to the purpose of your company, your department and your vision. That purpose will bring people to ‘volunteer’ with you, and once you start viewing them as volunteers, everything from the policy to the organisational level will begin to change. As leaders, change the mental mind frame in which you view the employees of today, and treat them as volunteers. Volunteers, who, if like the culture of your company, find it encouraging, transparent and fun, will most definitely come back, and even if they don’t, will become great ambassadors wherever they go. Treat them as volunteers, but with respect, and treat them like an adult, at par.
HR function needs to step up from the limitation of traditional and operation definitions, as the workforce paradigm is undergoing a shift, especially in India. I hope the role evolves into better and more efficient partner to business, helping individuals, organisations and very importantly the country grow.
D Shivakumar, Chairman and CEO, PepsiCo India is the Conference Chairman at the 19th Annual NHRDN National Conference to be held in Delhi on the 19th and 20th of November 2015