Often technology and good business processes never perform to the potential that they are meant to
HR is such a vital part of our organization. If we do not have the people with us we have no business
Hans Fuchs, Managing Director of ACC Concrete, speaks with People Matters about the future of RMX industry in India and how ACC Concrete Limited has reengineer itself to be able to adapt to the uncertain demand.
1. What do you think are the differences in people management practices in India as compared to other countries of the world? Do different cultures require different approaches to people management?
I believe that people management is the same throughout the world and that part of management is to understand who it is that you are working with and ultimately for. Yes cultures are different throughout the world but the crux of what we are trying to do is build organisational capability through the growth of our people. We have to understand who our customer is and as with our external customers, we have to ensure that our value proposition is tailored to them and obviously the company.
2. What determines the leadership style that works for an organization? Do different industries require different leadership style? Do different companies, depending on their culture, require a unique leadership style? How will you describe your leadership style?
I think that the style of leadership required in an organisation does depend on the company needs. Styles obviously differ between an innovative software company to that of a construction company. However, there are some fundamentals that do not differ no matter what the company does. These are to do with the clarity of vision for the company and the passion with which it should be communicated throughout the organisation. This belief has to run through the company and for this to happen it can only be dome by supporting actions, be through communication from the top level through to front line management or through involvement through people development and organisational performance. As the saying goes “Seeing is believing”.
I think that there are situations in which we conduct business which necessitates differing approaches but the style of leadership should not change. The requirement for step changes in company performance, reorganisation or adapting to a changing business environment mean that strategic or tactical decisions have to be made which shall effect the organisation. The way of coming to those decisions is important to ensure that there is collaboration and belief within the top team. However, execution has to be decisive, time bound and with clear focus and understanding of the need for change. The latter can again only come from communication and then active involvement within the change process.
Again when dealing with the aspect of differing cultures an empathetic view has to be taken but this should not detract from what the company culture is or the values with which the company operates. To get the best out of your organisation you have to understand it.
I am not sure if I am the best judge of my own style and I would rather that this question be posed to one of my associates. Collaborative, decisive, results driven, knowledge sharing, positive, industrious, passionate.
3. RMC industry has undergone a tremendous up gradation in technology, up gradation in order to increase capacity and reduce cost of production for RMC. In your view, what are the challenges in implementing a technology up gradation? What are the key elements for a successful transformation?
The challenge to me is always being able to make these pay! Often technology and good business processes never perform to the potential that they are meant to. They often mask what is actually happening and sometimes one can find a second processes, often the original, in place. It becomes a “tick in the box” exercise rather than understanding the impact of what we have and leveraging this. Therefore, understanding the basics of what we do and then why the changes are being made and the advantages this can bring to all those involved has to carefully be given.
Communication is vital throughout the process as is practical training, assessment, on the job training then further follow-up, further assessment and ongoing follow up through audit. It sounds a tedious task but it is essential to get the most out of the investment in the change as well as in our people. In our initial organisation we had a Business Process and Change Management team to specifically help manage the changes which were being made within the business. The last audit as previously mentioned, is part of the front line management responsibility and an on going process which also ensures that their involvement in the development of their teams. Recognition, reward and celebration of success have to be part of the process along with the chance for those involved to have their say, a feedback mechanism.
The success of the investment comes in the numbers as well as the product quality, service and employee satisfaction. This has to be continually monitored to ensure that you are on track as well as being able to adapt to changes and make improvement.
4. The demand for RMC is a derived demand (as it depends primarily on the industrial activity, real estate business, construction activity, and investment in the infrastructure sector). How do you predict demand for 2009 and 2010 with uncertainty in the economy? How does that prediction affect your manpower planning strategy?
With the onset of the financial crisis the real estate sector in India has witnessed a serious slowdown which is forecast to continue through 2009. This sector, in major metros in urban India, is showing declines in volumes of 20 to 40% which is in turn affecting the whole RMX industry which has traditionally been supplying approximately 70% to this segment. This has directly impacted the RMX market as traditionally 70% of the RMX volumes were supplied to this segment resulting in a slowdown in RMX activity in urban locations. Also as the liquidity of companies is stretched and their access to funds has diminished, extreme pressure has been placed on payments in the market. Although the government has announced plans of major infrastructure investment this shall in reality, not begin to take effect until 2010 and we shall not see an upturn in the major residential real-estate sector until the same time.
The economic downturn had a major impact on the original expansion plans of the Company and therefore a realignment of the organisation had to take place quickly to cope with the economic and market situation. “Right Sizing” of the organisation took place in last quarter of 2008.
The manpower planning is focussed on ensuring the right people are in the right places at the right time. Again this is something which people take for granted that takes place but when you objectively assess a person in their current position against the technical and leadership competencies required for that position you find sometimes that the person at worst, may be in the wrong place but you always find that development is required.
In a market which is under pressure, we have to have agility, we have to respond and adapt quickly to change. Therefore, we have to equip our people to do this. This comes from decisive leadership throughout the Company; this does not happen overnight and has to be helped along through leadership development. We also have to have a workforce which can multi-task. Therefore, our technical training has to ensure that this can take place.
5. How does a RMX company differentiate itself in order to attract and retain the best talent?
To retain talent we have to have it! Therefore at the start of the process we need to ensure that we are getting the right people into the Company as well as finding the talent within. I believe that development potential for individuals in a Company that has the plans to grow in a market that has phenomenal growth opportunity is a key attraction. Our Companies Values, our approach to organisational development and being part of a multi-national also helps in getting people with us.
Retention of talent means that we have to keep people motivated and therefore we need to know what motivates our people. Personal development and the ability to become marketable talent play a role in this. Through our development centres, competency mapping, technical and leadership development we find and develop talent. This is an essential part of building our organisational capability, having succession and a breadth of talent required to be an agile company which is in a position to expand.
A clear understanding of the where the Company is heading and involvement in the process of how we get there has proved to be an important factor of belief in the Company. This along with recognition and celebration of success promotes an environment where people want to stay.
6. Currently many companies, including ACCCL, are undergoing internal restructuring and in some cases that means letting go of some employees. How does a leader maintain employee morale during times of right sizing?
As stated earlier we have undergone a major reorganisation within the Company in order to be prepared for this current economic climate. At the outset, I have maintained absolute clarity and transparency in all of my communications in informing every employee of the situation, the potential consequences of this and finally when the reorganisation took place what it was and why it had to be carried out.
An understanding and buy-in was important within the top and senior management teams. All were involved in the design of the process, all were coached in what and how we had to do this and then we all did it together. Our strength of teamwork and our unity proved to be valuable within the process.
When we did it, we did it as quickly possible and as compassionately as you can do this sort of thing. I made a conscious decision to do this in this way. I did not want to have a Company which had an underlying uncertainty manifesting and our people wondering whether there was a future with the Company or not. I have seen and been part of, major reorganisations in the past which have taken many months and I have seen the destruction of people’s morale as well as value from the companies involved. Our Company could not afford to be in this position and it would have been irresponsible of me to let it be in that position.
It has been extremely important to visit and see all of the people in the Company and field the questions and answer the concerns which they had. I did this in every location across India. I got people together in their environment and sat with them, in some instances on the floor in the site office as there were not enough chairs for everyone. It was so important to ensure that people understood what we had to do and why? Emails and notice board communications are no where near enough. The reorganisation placed essential concentration on Customer Excellence through work generation and customer service Equipment & Support Process Optimisation /Utilisation, Cost Reduction & Cost Controlling and Human Capability & Capacity Development.
The focus throughout the process and for the future remains for performance accountability of all of our people, working together as a team, and versatile multi tasking workforce that provide our customers with the best product and services.
7. When it comes improving productivity from all levels in the organization, how can you ensure that each individual understands their contribution to the organization and is driven to contribute towards the common objective?
A clear understanding of where we are going, what we stand for and what are the key actions we need to do to get there.
The process I follow ensures a great deal of participation and collaboration. It makes sure that supporting objectives are clearly defined throughout the organisation and cascaded throughout the whole workforce through engagement. These are monitored for performance against the targets set. Vision, Mission and the overall Company strategy are first presented and understood.
In the initial part of the process the Company’s goals/objectives are then decided upon which link to the Vision, Mission and Strategic Plan by the team, presented in a focussed and prioritised manner and limited to those items (Key Success Factors) that make a significant impact on the Company's ability to achieve its longer term vision. These KSF’s or Business Objectives /Goals are defined under three distinct and clear business headings, Market, Operations and People. The financial performance of the company is an outcome of these.
Each of the KSF’s has supporting Tactical Objectives/KPI’s. These are then cascaded throughout the organisation and each area and function decides and agrees the supporting objectives / KPI’s, their targets and metrics which support these. The functional management team then decide on KPI’s and targets to be cascaded to each position. All individual KPI’s have to be something that has sole accountability of that position.
In this way supporting KPI’s are set at ground level which supports a departmental objective which in turn supports the overall business KSF which in turn supports the strategic plan and vision / mission and all of this is then wrapped up in our Comoany Values. All KPI’s set are measurable and designed so that the progress can easily be monitored and regularly reviewed. The whole process involves all Front Line Manager Level in KPI agreement and then all employees in understanding their own KPI’s and how these this fits into the overall Company Goals and Vision. Progress against the KPI’s and KSF’s are then clearly visible to all and focus is then on continual improvement. The KPI’s then form part of the rewards system.
8. What is the role of your Human Resource team in supporting the business? How does that role evolve as the economic situation changes?
HR is such a vital part of our organisation. If we do not have the people with us we have no business.
In boom times, time is money and in a downturn time is value. This is a time for us to build our solid platform in our organisation for the future development of this Company. This is the period to invest in our people processes. The pay back for us will be enormous as we come out of our current situation. We have a chance to become extremely fit and agile as an organisation and for this platform to then be sustained in the future.
Having the right people in the right place at the right time, having an organisation which develops its people, having succession planning in place, acquiring and developing, retaining talent, celebrating success, rewarding its people and associates, openly communicating to all of its people, focusing on customers and having the capability to be agile and respond to the changing environments.... which CEO does not want that? And what company can do that without people and a professional HR Team?