Why this Kolaveri Di?

THE COLD-BLOODED KILLING OF AN HR MANAGER MAYBE THE MOST EXTREME EXAMPLE OF HOW EMPLOYERS ARE STRUGGLING TO MANAGE THEIR WORKFORCE DURING A TIME OF ECONOMIC UNCERTAINTY; BUT IN ITS WAKE, IT ALSO DRIVES HOME IMPORTANT LESSONS IN REDUNDANCY MANAGEMENT

I WOKE UP in the morning last Thursday to read about the horrifying death of Awanish Kumar Dev, the General Manager (hr) of Maruti Suzuki. This was not one of those deaths that happened as a collateral damage during a violent turn of events, not one that could not be predicted and therefore prevented.

It was not that Awanish came accidentally in the line of fire becoming an unfortunate victim of a violent incident. No such luck. No easy explanation that would help us justify the violence as a one off incident, and hope that it does not occur again. This was a brutal, cold-blooded murder, where the mob of workers came into the office, hunted out executives and assaulted them. They then trashed the premises, and set it on fire, expecting and targeting to kill quite a few people. One person getting killed may, ironically, have been the best-case scenario that unfolded on that tragic day. Things could well have been a lot worse.

Awanish’s murder is not an isolated incident. A similar event happened in Greater Noida, at the Graziono factory, when the country manager was lynched by a mob of workers in September 2008 and another that took place in Yannam (Puducherry) in January, this year, where workers killed the ceo of Regent Ceramics, the biggest employer in that city.

The factory was burnt down and Regent has still not been able to commence production from there. There was yet another incident at Orient Crafts (a garment exporter) in March, where a 1000-strong mob vandalised the plant, as a consequence of which ten workers and two policemen ending up in hospital. In September 2009, Roy George, the Vice President (hr) at Pricol’s, an auto component manufacturer with a plant at Coimbatore was similarly hacked to death by an irate section of workers.

Extreme kinds of industrial violence, like what happened at the Maruti plant, are not isolated incidents. They are neither location-specific, nor industry, company specific. Media and intelligentsia that is projecting that the solution may lie in moving the plant to a Gujarat are ignoring the recent trail of events across north and south India, and across industries as varied as tiles and garments, to the more sophisticated manufacturing plants like automobiles. It is very probable that the next incident might happen in Gujarat or Tamil
Nadu, as easily as it happened in Haryana this time.

If we dig deeper, the issues are there for all to see, right under our noses. It is well-documented and reported that most manufacturing units in India today, including Maruti, are run with contract labour. Contract workers form a very large portion of the workforce today — 40 percent in Maruti’s case, but even larger in several other companies. They do not enjoy the rights and privileges of permanent workers. Their compensation for doing similar level of work is much lower, and the management can get rid of them at-will.

To complicate matters, a bulk of these workers also come from Geny; are in their 20s; and have grown up exposed to the world of plenty, thanks to television, the internet, and economic liberalisation. Cut to the broader environment in the country. Inflation in India is back to double digits. Public institutions, such as government schools, hospitals and public transport, have virtually broken down.

While in the India of the 70’s and 80’s, families did avail of such social services virtually free or at subsidised costs, today, these options are just not there for these youngsters. Today, the cost of basic living, implying two square meals, sending kids to a school and ensuring healthcare for the family, requires a base level of earning that is non trivial, to say the least.

Here, we are not even talking of housing, which in a place like Haryana has completely gone out of reach of even the middle class folks. The same Haryana has Gurgaon, which is touted as the first Indian Millennium city, with 50 malls (yes, 50!), three golf courses, countless gated communities, and nine international schools at the last count.

Most senior executives/owner ceos live in gated communities, send their kids to exclusive schools, and live a fairly insulated life from the surrounding issues that disproportionately affect the workers who are building and maintaining these facilities every minute of the day. The disparity is growing, and increasingly in-your-face now.

What does this reflect? The educated middle class, to which the Awanish, Roy, and others of his ilk including many of us, belong, have been extraordinarily self-absorbed in taking care of themselves and their families. They form the backbone for the mncs, the family-run enterprises, and the home grown public companies.

They use their knowledge and brainpower to formulate rules to help these businesses manage the workers, create wealth, pay minimal taxes, keep the wage bill in check, and maintain a slick public image. They are at the forefront managing environmental concerns, keeping ngos at bay, and making the right noises about “Corporate Social Responsibility”.

Willy-nilly, they turn a blind eye to many questionable practices within these organisations. Finance executives quietly sign the books, even though they are smart enough to know of the glaring irregularities in so many of them; a few are later ‘discovered’, and muck hits the roof. Sales professionals and senior executives participate actively in bidding for and sourcing deals with kickbacks and pay-offs, justifying that they are just doing their jobs.

HR managers, many of whom go out of their way to prove they are ‘effective managers’, do little to ensure equity and wealth distribution, down the organisation hierarchy. In fact, in this specific case, Awanish had put in his papers, and subsequently withdrew them, about six months ago. If that’s true, it goes to prove that he was uncomfortable with what was happening in the company under his supervision.

Do you know that the same Maruti plant had had another showdown about nine months ago, after which, it is rumored, they ‘paid off’ the union leader Sonu Gujjar to buy peace? A very questionable practice, indeed, and one that would definitely not be what they teach you at the xlris and xisss that most of the hr managers come from these days!

However, events in the recent past are making it obvious that this approach is backfiring, and hitting the middle-class where it hurts badly. The telecom scandal landed Reliance executives Gautam Doshi, Hari Nair and Surrendra Paparia in the jail. Vikash Shroff, the M&A Head of Essar and an iim Cal/srcc alumnus has been charge-sheetedfor cheating and is out on bail. While hr folks get killed, finance folks go to jail!

But, in the end, everybody stands exposed and proves to be more vulnerable than they had ever imagined. I will not be surprised if we are seeing the beginning of the after-effects of what we all know has been happening for a while — the destruction of institutions and the moral fabric of the Indian society. Infrastructure, law and order, administration, day-to-day governance, why even our defense sector has been compromised thanks to the all-pervasive corruption that has been institutionalised and is being defended by the top 1 percent.

The white-collar professionals have been silent accomplices who have contributed their bit by not raising questions at the right time, and by not fighting what they know is wrong, with serious repercussions. We have been actively executing on behalf of the perpetrators. Can we absolve ourselves of all the blame? While we blame politicians and bureaucrats for all the ills in our society, it is becoming very clear that our complicity has contributed at least in part to where we are today. Perhaps, we did not foresee that one day we would ourselves become the victims?

Think about it…any one of us could have been in Awanish’s coffin, or in Hari Nair’s place cooling our heels in a jail. If we do not wake up from our slumber even now after watching such ghastly events unfold in front of us, we will have nobody to blame but ourselves. It is time we cleaned up our act, by collectively voicing our concerns and refusing to be silent accomplices in corporate crimes.

I would love to see the entire hr team in Maruti coming together to tell the management what they ought to be doing to win the worker’s trust and confidence for the long term. There is a silver lining in every cloud. Let Awanish’s sacrifice not be in vain. I have no doubt that he would have wanted it that way, for the only two entries in his blog are a call to understand and appreciate true ‘Gandhism’(check out http://awanishdev.blogspot.in/). Oh! What an irony that such an individual should fall prey to such violence!

GROWING UP PANGS

INDIAN START-UPS SHOULD TAKE A FEW GREY HEADS ON BOARD, WHO CAN HELP THEM BREAK OUT OF THE PACK OF THE PACK

STARTUPS ARE in vogue, again. If Bay Area had its Facebook and Zynga, Benguluru has its Flipkart and InMobi. Not a day passes by without some new funding being announced and the promise of yet another hot start-up that is going to transform the landscape. Exciting times definitely for the new graduates coming into the job market! They have better, and more interesting, options where they can get to work on cool technology and game-changing ideas. They can even start off on their own from Day 1 with support from the in-campus incubators, if they are in the iits, bits or the iims. For other colleges there is nen (National Entrepreneurship Network) whose only goal is to foster entrepreneurship among students.

But at some point of time, the start-ups need to grow up. As they succeed, they will reach a stage where their key challenge will become one of execution. They will need to execute well on a variety of fronts, so they can leverage the lead they have established in the market, scale quickly, and put enough distance between them and their competition. To do this, they will need to bring on board experienced, and therefore older, folk who can help them scale; who can speed up execution because they have done it before; and who can mentor, train and build a larger team of youngsters. Google had its Eric Schmidt in 2001 when it had no revenue, just an interesting service that had growing number of users. Facebook brought in Sheryl Sandberg as its coo in its fourth year of operations. And these are not the only senior hires. There is the cfo, the vp (hr), the Sales Head and other functional experts who came on board these companies around the same time.

Most of them have a stellar bio-data and have done much bigger things than where these companies were when they joined in. In fact, Sheryl Sandberg talks about this eloquently in her recent Harvard Commencement speech. She says, when she got the Google offer in 2001 (Yes, she joined Google right around the time Eric Schmidt came on board), she looked at it and realised that a) she had no team to manage, and b) she would be ‘General Manager’ of a non-existent, zero-revenue business! But she still took the job, because she believed that she was getting a seat on board a rocket ship!

Now cut to India. A couple of years back, one of my vc friends put me on to the founder of his portfolio company which, he told me, was growing really fast and therefore needed a strong operations head…and this was a business where operations were a critical part of the company. I went to meet the two founders to figure out what they wanted to do. No surprise — they felt they needed to hire a senior manager — an engineer with 8-10 years experience, they said. A little digging, and I found out that they were getting excellent traction with customers, and had an opportunity to scale and grab a leadership position in the market, if only they are able to execute well. The people they had now, was a young team of 15 agents managing end-to-end transactions. All the more reason, I felt, to bring in an experienced leader who can think long term, and will hire a second level of management to be able to scale quickly. But their fear of hiring a senior person for the role was so high, that the conversation didn’t go anywhere. The company has grown since, but nowhere near the exponential growth that successful start-ups need, to have to break out of the pack. I knew what the deal breaking concerns were here, for I had seen it repeating ‘n’ number of times, with companies at a similar stage of growth here in India. The first and foremost concern is culture-fit — here is a company full of 20-year-olds, and anybody at coo level would be in the late 30’s to early 40’s, a generation apart. How would he fit? Will he think like them? Or would he push them to think like him and thereby kill the start up culture?

Then there is the fear of hiring wrong — if they did hire, then he would be coming in at three or four times the average compensation levels in the company. What if he does not perform? The founders will lose credibility in the eyes of their young team, and it would be a great setback for the ‘employee morale’. Then, there is the money itself — why should we spend so much, when today we can manage with half the budget and half the person — can’t the coo-hiring wait for a year or two? Working with many start-ups closely, I have also uncovered another unsaid fear. Why would a high-flying executive, with great credentials and a secure job, join them for a riskier and less-paying role? It may happen in the Bay Area, but here in Bangalore?

On the flip side, there are people like my friends Sunil and Ravi. Sunil has spent over 20 years running the supply chain operations of a large retail chain. He has just quit the job, and is now at a crossroads. Should he go back to a similar role with yet another large retailer? He feels e-commerce looks exciting, and would be the way retail would go in the future. So, his gut tells him that it is the right time to jump into it, even if it means a smaller role or lesser money. But then, how does he make the shift? His network and his friends are all in the old world. Even if he writes directly, what should he ask for? The companies look so small that he would perhaps only fit the ceo role!

Ravi, on the other hand, has been among the lucky few who did get the opportunity to run a start-up, hired by the founders through the friends and family route. His experience, however, has been mixed. While he enjoyed the challenges of building and scaling the company through really tough times, he was bitter about the unwillingness of the founder to let go. As he put it, the accountability was all his while the strategic calls were the founder’s prerogative. Did he want to take yet another chance? Yes, he was clear that he wanted to do it again, but with a few caveats. And,no prizes for guessing what those were! But again, he was not sure how to find the right venture this time around, in the noise and din that is surrounding start-ups today. There are so many such ‘high flying executives’ I meet, who would give an arm and leg to work for an exciting start up but are totally clueless about what to expect and how to go about finding the right one! Should they demand the ceo’s role? Or, at least, a coo designation? Should they insist on a 25 percent hike in compensation, a risk premium for joining in at early stage? Why should they report to founders who are half their age?? What was the team size going to be? And should they insist on a severance package?
And we have the quintessential logjam, with a wide gulf separating both parties. The result is that, while start-ups need the best talent, our brightest are cooling their heels in large established mncs. The right model that would, perhaps, work for both sides would be a hybrid model where the senior executive comes on-board first on a 6-12 months contract gets comfortable with the team and, then takes a call on committing to a long-term role.

This might also allay the concerns and fears of the entrepreneurs, as they would start appreciating the tremendous value and the multiplier effect that such folks bring to the company. Yes, this would require senior professionals to take a big risk. But then they can always go back to where they came from, if things don’t work out. Isn’t it worth it if there is even a small chance that you can be in Sheryl Sandberg’s shoes??