APRIL 2017 VO L U M E 5 6 I S S U E 4 PAG E S 9 2 r60

CORPORATE RISKS:
BUILDING RESILIENCE

CYBERSPACE:
DEVELOPING THREAT
INTELLIGENCE

QUALITY:
DETECTING
UNCONTROLLABLE
VARIABLES

REPUTATION:
SHORING UP
BRAND IMAGE

RISK MANAGEMENT
LOOK BEYOND
THE OBVIOUS
 THE JOURNAL OF THE
ALL INDIA MANAGEMENT ASSOCIATION

VOLUME 56 ISSUE 4 APRIL 2017

THIS ISSUE

14
COVER STORY

BUILDING RESILIENCE 16 C OR P OR AT E C U LT U R E
Lateral thinking and working with a variety of stakeholders is FOR BETTER HARMONY 44
essential for robust risk management. Organisations must be sensitive to cultural
- K SH ANKAR diversities.
- BRIG. B M KAPOOR AND A R U N JI NDA L
THE BEST DEFENCE 22
To get ahead of cybercrime, companies must share STRATEGY
information. TUNE INTO THE RISK RADAR 48
- RAJESH MA URYA Demystifying opaque macroeconomic tools for
non-economists.
REPUTATION ON THE LINE? 28 - SH LOMO MAITAL, AND DV R SE SHA DR I
Reputation management demands collective responsibility.
- MUKUND MENON MARKETING

STRETCH YOUR GOALS 32 MASS PERSONALISATION 62

Factor in the possibility of multiple uncontrollable variables. 1:1 personalisation will be the norm for future
- SURESH LULLA marketers.
- V EERC H A ND B OT HR A
CASE STUDY
STRATEGY
RIGHT FIT? 38
An HR tech startup debates the effectiveness of psychometric KNOW YOUR YS 66
tests. Dealing with millennials, as a workforce, calls for
- DR MADH AV I LOKH ANDE a different approach.
- DR DEBASH ISH SENGUPTA AND ALESSANDR O NI COT R A
OUR MAJOR RECRUITERS

* Our Institute uses CAT Score for short. listing/selecting the candidates for our Post Graduate Programme
in Management IIMs have no role either in the selection process or in the conduct of the Programme.
 BETWEEN
THE
COVERS

SUMMARY
G LAKSHMANAN ON
SPRINT

EXTRACT
MEGATECH:
TECHNOLOGY IN 2050

BOOKSHELF

HR BANKING
SAY IT WITH NUMBERS 74 A FAIR SHARE 86
HR managers should demonstrate tangible RoI in Providing stock options could boost the morale of
people investments. employees in public sector banks.
- RAM ESH S O UN D ARARAJ AN AN D D R KULDEEP SINGH - MOH INI VARSH NEYA AND KIRAN SANDHU
EMPLOYEE ENGAGEMENT
NURTURING CONNECT 78
Engagement is no longer just a workplace approach,
but a living element extending to the psyche of
employees.
- SW ETA MISH RA
HR
PURSUIT OF HAPPINESS 82
Employee happiness quotient could just be the key
to increasing productivity.
- ASIF UPADH YE
 PRESIDENTS
MESSAGE
Risk management, a strategic imperative
SUNIL KANT MUNJAL is President, AIMA and Chairman, Hero Corporate Service.
R
isk management is becoming a
key issue for CEOs and boards.
Globally, companies are becoming
familiar with the position of the
Chief Risk Officer. CROs have direct access
to the CEO and boards, and their influence is
growing across the hierarchy and processes of
the organisation.
As companies become more globally
connected and data dependent, risks have
percolated across every aspect of businesses.
Growing volatility in politics, policies, input
availability and prices, demand, competition,
supply chain, technology, finance, and other
areas has exposed the limitations of leaving risk
management in the hands of only a few.
Global volatility is rising, as governments
and nations desperately seek ways to revive
their economies. Nationalism, as against
globalisation, is back in fashion. Electorates are
voting in leaders who are promising to reverse
the loss of jobs and competitiveness.
Nations that were torchbearers of globalisation
till a few years ago, are withdrawing from
existing and the proposed regional trade
treaties; this has cast a shadow over global
investments and projects, and enhancing risk for
countries in emerging economies.
8 INDIAN MANAGEMENT APRIL 2017
For emerging nations, another growing anxiety
is the possibility of a reversal of easy monetary
policies in developed countries. Abundant
liquidity created by such policies has inflated
asset prices around the world and provided
considerable startup funding. Any dramatic hike
in interest rate in the US could trigger the flight
of the dollar back to the US and rattle the global
financial and currency markets. Even though the
Indian rupee has gained considerable strength
recently, Indian companies must, in the coming
months, prepare for heightened volatility in
currency, overseas finance, and trade.
Energy risk is making a comeback as oil-
producing nations rethink their production
strategy. OPEC has tried to compete with shale
oil and renewable energy by keeping prices low
but as the signs of economic recovery emerge
in some key economies, they appear willing
to let the prices rise. However, the situation
remains sticky as the US is removing restrictions
on domestic production and consumption of
oil. This has exacerbated the complexity of the
energy market.
Yet, the most substantial risk is emerging
in the form of disruptive technologies and
innovations. A continuous flow of technological
innovations is disrupting business models,
 organisational structures, and business
processes. Older technologies and companies
are becoming irrelevant very quickly. Even
comparatively nimble companies are facing
obsolescence as even newer technologies and
innovations come into fray.
The banking and finance,
retail, media, entertainment,
Though cybersecurity
transportation, and hotel
awareness is growing,
businesses have been turned
it is not uncommon for
upside down by asset-light
CEOs and boards to pinch
and globally online platforms.
pennies when it comes
Such platforms have taken
to digital infrastructure,
away the market power from
equipment, and software.
the producers by taking control
of consumer behaviour and
allowing consumers to bring underused personal
assets into the market. Traditional companies
have responded by digitising themselves and
integrating with the platform markets too. This
has made data a prized and vital asset.
As the economy is moving to the digital
realm, so is crime. Attacks on digital assets are
becoming routine and companies are exposed
to a variety of cyber risks. Some attacks disrupt
the infrastructure and the operations, others
steal money and business data.
Even if a company is able to secure its own
systems, it remains exposed to financial and
reputational damage on account of errors or
misdemeanours by third parties. Therefore,
cyber risks have to be managed through the
ecosystem. Though cybersecurity awareness
is growing, it is not uncommon for CEOs and
boards to pinch pennies when it comes to
digital infrastructure, equipment, software, and
processes. All it takes is a major cyber attack to
change a companys behaviour!
The more technology savvy companies are
beginning to use new approaches to manage
data risk. Many test their cyber security regularly
by using attack simulations and even invite
hackers to break into their systems.
Some are beginning to use blockchainsa
data distribution structure where data is hosted
by everybody involved in a business. This
sharing of data ensures that the data cannot
be altered without permission from all hosts. In
comparison, centralised data repositories can
be wiped out if an attack succeeds.
So in sum, risk management is becoming
increasingly more diverse and sophisticated. It
is becoming critical for business success and
survival. Any CEO not giving these aspects due
attention is a risk to the company.
The opinion expressed is personal.
INDIAN MANAGEMENT APRIL 2017 9
 QUIZ
NO.50
The Government of India
has launched a desktop and
mobile security solution in
order to provide a secure
cyberspace in the country.
What is it called?
What is the name of
Indias longest road tunnel
linking Kashmir Valley with
Jammu, which was recently
inaugurated by the Prime
Minister?
Global giants such as
Facebook, Mozilla, etc,
have started an initiative to
promote news literacy and
increase trust in journalism.
What is it called?
Which Finnish company
is launching smartphones
under the official Nokia
brand?
5.Team Indus 6.News Integrity Initiative 7.Bob Dylan 8.HMD Global 9.Bharat Stage (BS) III 10.Souq.com
Answers: 1.Cyber Swachhta Kendra 2.Paytm 3.100 GW 4.ChenaniNashri Tunnel
10 INDIAN MANAGEMENT APRIL 2017
Which Indian digital
India has targeted to reach
payments company's
production capacity of
ecommerce unit has
175 GW in renewable
recently become a unicorn?
energy by 2022. What
will be solar energys
contribution in this?
Name the Bengaluru-based
Shutterstock.com
aerospace research firm
which is in a race to put a
privately funded spacecraft
on the Moon.
Which American artist
received the Nobel Prize in
Shutterstock.com
Literature in 2016?
The Supreme Court of India Which Middle Eastern online
has banned the sale of retailer is in the process of
cars compliant with certain being acquired by Amazon?
emission norms. What is
it called?
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 EDITOR S
NOTE A SPENTA MULTIMEDIA PVT LTD PUBLICATION
A P R I L 2 0 1 7 VO L U M E 5 6 I S S U E 4

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T
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his time of the year is busy and momentous for all
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That businesses will continue to operate in a state of flux is a given; ART DIRECTOR I Parvez Shaikh
also the reason they need to attract and retain the best of talent. The role GRAPHIC DESIGNERS I Nikunj Parikh, Payal Sumaya
HR plays in an organisations success cannot be overstated. But have HR ILLUSTRATORS I Swapnil Redkar, Darshan Sompura
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Companies would do well to know and
protect their weakest links.
BUILDING RESILIENCE
K SHANKAR
THE BEST DEFENCE
RAJESH MAURYA
REPUTATION ON THE LINE?
MUKUND MENON
STRETCH YOUR GOALS
SURESH LULLA
Building
resilience
A structured approach that merely complies with regulations is not enough to manage risks.
Unconventional thinking is the need of the hour.

K SHANKAR, FEEDBACK BUSINESS CONSULTING

16 INDIAN MANAGEMENT APRIL 2017


I
am a preferred flyer with Emirates and
choose the airline for all my flights to the
US and select parts of Europe. March
22, 2017, the UK and US governments
imposed a ban on passengers carrying
laptops in the cabin from six airports
around the world. Dubai is one of them.
This is an external risk. I will now fly through a
US and UK friendly airport. However, Emirates
will be directly impacted. They have deployed
their best assets on those sectors. If Emirates has
not factored this risk, given its business model
COVER
STORY
they will find it difficult to mitigate it. The impact
will touch every bit of Emiratesfinancials,
brand image, fleet management, customer
loyalty programmes, employees, investors,
and many more. This development is a clear
indicator of how risk has changed in the last two
decades and the speed of its change in the last
five years.
The risk mix is changing at a pace of knots.
Risk mutation like virus mutation is the
new phenomenon that is developing. Most
conventional risks have now become hygiene
checks for businesses. Companies are redrawing
their risk management plans and reviewing it
at a higher frequency. It is not being managed
in operational silos anymore. Risk management
is a high weightage item on the boards agenda.
It sometimes matters a lot more than growth
plans. This is primarily because the danger may
be in the blind spots caused by the lack of an
integrated view of operational activities or in
areas not considered to be at risk. The Emirates
example is a case in point.
A comprehensive, dynamic, and integrated
approach to addressing corporate risk is
essential in identifying critical strategic and
operational risks that affect enterprise value.
This will involve a holistic view of strategic,
financial, operational, and external risks. These
are the conventional parameters. Additionally,
the new and the more compelling pointers of
risks that have found their way into the new
framework are the tirade against globalisation
popularly known as the anti-globalisation
movement, changing international trade
dynamicsfuture of select trade agreements
around the world, data piracy, financial crises,
environmental disasters, regulatory changes,
and obsolescence in product or service caused
due to disruption or innovation in conventional
businesses. Risks have an upside and a downside.
Both extremes cannot be ignored as they have a
direct bearing on the future value as well as net
present value of a corporation.
INDIAN MANAGEMENT APRIL 2017 17
 When global economic buoyance dampens
and countries begin to look inwards for more
predictable markets, the regulatory bodies and
investors begin to exercise their responsibilities
more seriously and start scrutinising companies
for their risk-management policies and the
exposures they have in the business ecosystem.
The procedures are measured and a certainty
is established. This can be substantiated by
the continuous increase in responsibilities of
independent directors on the board. Till a
year ago, in India, independent directors were
responsible for small investors interest and the
overall compliance of the company on statutory
they administer. It was always important and it
now is a massive strategic imperative.
Conventional risk management is dealt with
in a simple templated framework. Risk issues
are divided into three clusters:
Known risks: These are risks that are
predictable, and a policy can be architected
to manage each of these. These are primarily
internal issues (employee, safety, quality
process, compliance, etc.) and a few external
issues (monetary, fiscal, customer, etc.). These
risks can be closely measured, controlled, or
in some cases eliminated.
Strategy risks: Strategy risks are quite

A strategy is generally
designed to push hard a
desired outcome and with
high expected returns.
Shutterstock.com
issues. The responsibilities
have moved beyond that and
accountability has gone up.
This is primarily because
board of directors are required
to review and report on the
adequacy of risk-management
processes in the organisations
different from known risks because they are
not inherently undesirable and they emerge
as a result of the gamble or market-driven
endeavour a company exposes itself to. A
strategy is generally designed to push hard
a desired outcome and with high expected
returns. This generally requires the company
to take on significant risks, and managing

18 INDIAN MANAGEMENT APRIL 2017


Risk teams should those risks is a key driver in
look at both the upside capturing the potential gains.
The most highlighted example
and downside of a quoted around the world
particular risk. on strategy risk is British
Petroleum. The high-risk
strategy of drilling several
miles below the surface of the Gulf of Mexico
resulted in 11 deaths and a loss of many
million barrels of crude. BP settled with the
US authorities by agreeing to pay close to
$18 billion in penalties! A lot of small and
medium companies fall victim to this category
of risk primarily when they raise finances for
business expansion, product introduction,
etc., without proper assessment of
downside risk.
Ecosystem risks: These are usually
referred to as external risks or outside
risks. In a globalised world, there are a lot
of risks that arise from events outside the
corporation and are beyond its influence,
control, or predictable canvas. Sources of
these risks include natural disasters (depleting
ozone, shrinking glaciers, etc.), political
developments (Brexit, Trump election, etc.)
and major macroeconomic shifts (impact
of Chinese economy). Ecosystem risk
management requires a different approach
to deal with. This is primarily because
companies cannot prevent such events
from occurring, their management must
focus on hypothesising about potential risk,
identification of these risks, and picking up
early signals. This usually becomes a corner-
room activity or a board- sponsored activity
that runs independent of the corporations
daily management rigmarole.
Corporations that tailor their risk-
management processes as per the above
ABOUT THE AUTHOR mentioned categories and manage them are
K Shankar is CEO, found to be less impacted than the others. While
Feedback Business a compliance-based or a rule-based approach
Consulting.
is effective for managing known risks, it will
CORPORATE
RISKS
not be effective to manage strategy risks or
external risks. These require a fundamentally
different drive based on open, fungible, explicit,
and unstructured approach. It will involve
lateral thinking and working with a variety of
stakeholders. Here are some suggestions:
Risk management needs recognition and
investment
Investment-led approach: Organisations
need to look at risk management as an
investment and not expenditure. This requires
a mindset change. Boards should drive this
change through the CEO. This would also
mean the CEO having a risk mentor in the
board or an external risk mentor. This will be
a clean indication to investors and employees
that risk has received recognition as an area of
importance. Companies that are dependent on
data have to invest in securing it from theft,
loss, and neglect by eliminating all insecure
practices and investing in layers of security with
predefined access rights. Data should be made
available on a need basis. This infrastructure will
call for investments.
Independent teams: Risk management
will need separate attention. This team should
be independent of the strategy team and report
directly to the CEO. Issues such as data piracy
risk, regulatory, and policy risks can be best
handled through this operating model. Large
companies with complex operating structures
and geographies should appoint risk advisors
on compliance, monetary issues, etc. External
advisors will also report directly to the CEO.
This will mean the CEO will have three
independent views from teams on strategy,
routine risks, and business and external risks.
This simplifies mitigation mechanisms. The
review frequency has to be high.
Bulls and bears debate: Risk teams
should look at both the upside and downside
of a particular risk. The approach to mitigation
is best decided if the risk team can assume
INDIAN MANAGEMENT APRIL 2017 19
 CORPORATE
RISKS
roles of debaters for and against a particular
action. US corporations are very adept at this.
This is similar to a bulls and bear approach
when acquisition strategy is debated by
management teams.
Risk scorecard is mandatory
Measuring risks and linking it to
performance: Companies that have multi-
country, multi-product, multi-market footprints
should invest in a cost centre that not only
measures risks but also articulates it ahead of
time. Metrics can be put in place to measure
risks in a way that performance assessments
is possible. Risk management deliverance
should be made a performance measurement
parameter.
Setting thresholds: Risk is like friction.
It can be minimised but not eliminated. In
view of this, it has to be part of the core
operating principle and a threshold for risk
needs to be indicated. It becomes a brief to
the risk management team. Provisioning in the
budget plan has to be made to deal with the
threshold levels.
Involve insurance:
Insurance will have a big play in
Risk is like friction. It risk mitigation going forward.
can be minimised but Companies need to insure
not eliminated. themselves adequately to deal
with eventualities of litigation or
otherwise.
Embedded thinking on risk
Derisking at the core of strategyevery
strategy should have a derisking plan
mandatorily conceived. This will take care of
all the known risks and strategy-related risks
that will affect customers, market, and finance.
It will also roll in policy change issues and
regulation.
Derisking should be addressed through a
scenario building approach so that the path
to a derisking strategy is well laid out and
20 INDIAN MANAGEMENT APRIL 2017
all variables are adequately identified. These
scenario building approach methodologies
will include all the possible natural disasters,
international developments, politics, and war.
The most successful companies that handled the
Brexit situation were those who embedded it
into their plans.
Planning contingencies and making
appropriations: Like any good planning
annexure, risk planning should have alternate
plans that can address various combinations of
risks. Contingency plans work best in case of
unstructured scenarios.
Insulate core assets, capital and
people: While these come under the known
risk categories, they can behave differently
in response to external risks. They have to be
protected and taken care of on a continuous
basis. Multinational corporations can operate
through a limited liability approach when they
expand globally. It will also help them deal with
the anti-globalisation narrative.
The quantum of risks is increasing by the day.
Risk audits alone will not be the way forward.
A lot of unconventional thinking is required
to deal with risks. New-age businesses tend to
become obsolete in terms of their core offerings
in a time period of 5-7 years with the way
technology is invading businesses. Good risk
management practices will help corporations
tide over these cycles consistently.
The best defence
Cyber security manpower development along with actionable threat intelligence is half the battle won
against organised cybercrime.

RAJESH MAURYA, FORTINET

22 INDIAN MANAGEMENT APRIL 2017


T
he cyber world never stands
still. Emerging threats and
new zero days makes it even
more volatile and active.
Adding to this volcano are
over a million new IoT
devices that are getting
connected to the internet daily. Experts predict
that as many as 25 to 50 billion IoT devices and
sensors will be deployed by 2020, for an average
of 4.3 internet-connected devices for every man,
woman, and child on this planet. Adding more
COVER
STORY
fire to this volcano, organisations have evolved
from person-to-person transactions to a fully
digital business modelthe networks have
evolved as well, become increasingly complex,
and more difficult to defend.
To keep the volcano from erupting,
organisations have purchased a host of different
security products, often from different vendors,
as part of their overall security infrastructure.
What organisations are finding is that many of
these products are duplicative, adding complexity
without adding any security. Hackers are smart
people and they know exactly what organisations
are going through. There is only one way to
get the better of thembe quicker and more
knowledgeable.
To get ahead of cybercrime, we must share
information. A collection of companies working
together to collect and share intelligence will
always provide better visibility of the threat
landscape than one organisation on its own.
Seeing new threats as soon as they emerge
increases our ability to respond and protect
valuable resources.
There is a lot of raw data available to
organisations, from both global sources and
within their own networks. But that is just
half the battle. Unfortunately, most security
infrastructure was not designed to effectively
consume, correlate, and distribute the increasing
volume of information available.
For threat intelligence to have a real impact on
cybercrime, you need to consider three things:
Start with good threat intelligence
There are a lot of threat feeds available to
organisations. But much of the data they provide
is redundant, has little to no context, and often
requires a significant amount of processing. This
is one of the reasons Fortinet began the Cyber
Threat Alliance (CTA). We recognised that
growing cyber threats place the entire global
digital economy at risk. Our mission is to share
reliable and usable threat information between
INDIAN MANAGEMENT APRIL 2017 23
For many organisations, member organisations and their
the addition of cloud customers.
Using the newly announced
networks, IoT devices, Cyber Threat Alliance platform,
and additional threat CTA members are already
feeds simply create more sharing tens of thousands of
complexity. active threat intelligence threads
each week. And in addition to
raw data, CTA members also
contribute unique threat insights and context
to increase the usefulness and value of this
information. This enhanced intelligence allows
us to create a more comprehensive picture of
threats that can be converted into consumable and
actionable updates.
Intelligence is only as good as your ability to
use it
Threat intelligence also needs to be integrated
with the data collected and correlated inside
your own organisation. Effective security tools
need to work together to gather, correlate,
and provide visibility of your local threat
environment.
This actionable information then needs to be
converted into actionable policies and distributed
across your ecosystem of traditional networks
including public and private cloud environments,
and your growing number of endpoint and
IoT devices.
Unfortunately, many IT teams already have to
monitor and manage a wide range of separate
security consoles tied to dozens of isolated
security devices. These tools were never designed
to share information, which means that while
the speed at which the network needs to operate
continues to increase, your security team is still
manually correlating an increasing volume of
threat information. And for many organisations,
the addition of cloud networks, IoT devices,
and additional threat feeds simply create
more complexity.

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24 INDIAN MANAGEMENT APRIL 2017


Security needs to operate at the speed of
your network
Todays digital businesses need security tools
designed to operate at the speed of business.
They cannot afford to trade protection for
performance in any segment of the network.
But as the volume of devices and data continues
to grow, it becomes more and more difficult to
inspect and process the traffic flowing into and
through your network. About 75% of all traffic
moves laterally, or east/west, between physical
and virtual devices, at speeds far beyond the
capabilities of most security devices. The speed
required for critical business
decisions means that many
You need a security legacy security tools have
become roadblocks.
strategy that unifies your
Organisations need security
security tools into a single tools designed for todays
integrated system. network demands.You should
never have to choose between
performance and protection.
Need for a new strategy
Security needs to span your entire environment,
providing unified visibility of IoT and endpoint
devices, access points, network core, data center,
cloud, and even applications and data. It needs to
be powerful enough to meet the demands of the
digital businesses. And given the speeds at which
todays attacks happen, security devices also need
to work together to automatically respond to
threats without waiting for human intervention.
This cannot happen with the traditional model
of simply deploying additional isolated security
devices and platforms every time your network
changes.What is needed is an integrated,
architecture-based approach that matches the
changes you are making to your network.You
ABOUT THE AUTHOR
need a security strategy that unifies your security
tools into a single integrated system. It should
Rajesh Maurya
is Regional Vice be able to see every device connected to your
President, India & network, dynamically assign them to appropriate
SAARC, Fortinet.
network segments, synchronise threat intelligence
CYBERRISK
between different security technologies, and
automatically adapt to network changes.
Great cybersecurity technologies need
great people
We have reached a stage where cybersecurity
manpower development cannot be put off
any longer. One may assume that with greater
automation and the advancement of technology
in general, the dependency of cybersecurity on
human beings has fallen. The truth is quite the
opposite. According to Frost & Sullivan, more
manpower is needed for the following reasons:
More sophisticated and persistent
cyberthreats:The rising sophistication
of cyberthreats is not just to accomplish a
singular goal, for example, stealing sensitive
information, but to be persistent and
effective over an extended period of time. To
achieve these goals, evading detection and, if
detected, silently adapting to either continue
or reappear later are part of the hackers
operating principles. Consequently, identifying
compromises and qualifying their severity
requires constant diligence and deep pockets of
expertise. A high degree of talent, knowledge,
and time is also needed to thoroughly root out
discovered compromises.
Larger IT footprints: The growing ubiquity
of mobile devices used for business, both
corporate-issued and personally owned, and
the increasing adoption of cloud services
contribute to a larger IT footprint to be
protected. The raft of mobile devices
manufacturers, operating systems, and
modelsand cloud environmentsservice
models and providersadd to the challenge.
More security technologies: Evasiveness
of threats and a growing IT footprint require
next generation security technologies to
replace and supplement the technologies in
place. With this, the security operations team
has more dashboards to view, dials to turn, and
alerts and reports to examine.
INDIAN MANAGEMENT APRIL 2017 25
 CYBERRISK
Self-inflicted wounds: No one is perfect
and perfection cannot be expected in an IT
world of perpetual change. Configuration
errors and oversights have and will continue
to occur. Similarly, end users will have lapses
in judgement, for example, clicking on an
untrusted link. This means re-do and recovery
will continue to be a routine part of security
professionals activities.
In the face of the cybersecurity manpower
shortage, the industry has made some stop-
gap efforts to deal with the issue. Various
organisations are developing machine learning
and automation technologies that try to
substitute humans in analytical work. Attempts
are also made to create artificial intelligence to
discover and respond to security threats.
In addition, the industry will continue to focus
on development efforts on technologies that
can let businesses deploy security with minimal
manpower. Such technologies include cloud-
based security platforms that can help resource-
lean SMBs manage or increase visibility, as well as
security solutions that can be managed remotely
by mobile devices.
26 INDIAN MANAGEMENT APRIL 2017
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Commendable as these efforts are, they are
no replacement for IT personnel. Intelligent
cybersecurity technologies can only take the
place of human decision-making as an initial
filtertake a look at what trading algorithms
have done to the modern stock market. At the
end of the day, both artificial intelligence and
human operators need to work together. Without
the human element, larger and larger swathes of
the world will suffer from poorly implemented
cybersecuritysecurity tasks will be sub-
optimally done, leading to greater vulnerabilities
in cyber defences and inefficiently run security
departments.
To successfully groom cybersecurity talent,
all stakeholders in the industry must come
togethernot just technology providers, but also
governments, regulators, educational institutions,
services providers, and end-users. There must be
more concerted setting of the security education
agenda, curriculum development and knowledge
transfer, funding, and internship programmes.
For young aspiring cybersecurity professionals, it
will be immensely helpful if they could reach out
to the industry to signal their interest.
 Global ideas and insights. Latest trends, opinion, and practices. Innovative thinking from
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Reputation
on the line?
How best can you shore up the image of your organisation when it hits a rough patch.

MUKUND MENON, INTERNATIONAL PAPER INDIA

28 INDIAN MANAGEMENT APRIL 2017


I
like what Jeff Bezos said, Your brand is
what other people say about you when
you are not in the room.
It takes a long time for an organisation
to build a reputation and brand to
become what they are known for and
what they stand for in the eyes of the
world. It takes time and effort for a company
to sustain its reputation by engaging individuals
through their diverse culture which is reflected
in their day to day performance. While it takes a
long time to build a reputation and brand image,
COVER
STORY
it does not take too much time to destroy one.
The fall is too steep and it takes a miracle or
an extremely painful journey to rebuild lost
reputation. And mostly, it will not be the same.
Ethics and governance
We have seen classic examples of how once great
organisations with good reputation and brand
image have gone down in a short period of time.
Satyam is a classic examplethe incident gave a
jolt not only to people within the company, but
also to the entire IT industry, Indian corporates,
and the country itself. It was considered a
great risk for the future of global companies in
the country, and for the livelihood of several
talented individuals and customers who had
faith in the industry. The government stepped in
immediately and did a wonderful job in restoring
normalcy and did everything possible to ensure
that the image of the country and the industry
is protected with the future in mind. Today,
the company has rebranded itself and regained
confidence in the marketplace, and among people
and shareholders. It was a herculean task, indeed.
We need to remember that when a reputed
company goes down the drain, the media
and the marketplace are active with whatever
information they have on hand, and managing
those with the right information is important
from a futuristic perspective. It was a wake-up
call for all corporates to tighten their belt with
respect to corporate governance.
We are still not clear on the situation of
Kingfisher Airlines. It was once the poster child
of the airline industry with a lot of exuberant
choices of customer service. It did not take too
much time before it was shut down which made
other airlines in the country go through a period
of instability. The company has not yet recovered
and I do not think it will. During this period,
SpiceJet acquired the reputation of an airline
that cancelled or extremely delayed flights. It
took a long time and investment and change of
leadership to get their act together and reduce
INDIAN MANAGEMENT APRIL 2017 29

Most of the time, a delays and cancellations. They
brands image, reputation, had to make a lot of effort in
branding and communicating
and perception are what with their customers as to
the world frames based how they have improved with
on what the company has compelling data to regain
demonstrated. customer confidence and
change public perception. In
the past, we have seen several
scenes at airports where the
SpiceJet staff were yelled at by travellers, for no
fault of those manning those counters.
Control and image
In the recent TATA Sons story, the issues were
all around reputation and philosophy of what the
founders of TATAs want to protect and preserve.
The issues that manifested were in different
ways and areas of conflict, but at the end, it was
[about] control, what they stand for, and how
they want to be perceived at the core. The issue
was managed in a fashion which did not damage
the brand as a whole, but could have ruffled a few
30 INDIAN MANAGEMENT APRIL 2017
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feathers in the bargain. It may be a big price to
pay, from a change management perspective.
The news we heard from the media and
internal sources recently on Infosys is that
there are differences brewing at a principle and
philosophical level between the founders and the
new leadership. It could be a classic situation of
changing the way Infosys works. We have known
Infosys as a company Narayana Murthy built on
the principles of transparency, ethics, and quality
of consulting, which Thomas Friedman alluded
to in his book World is Flat. After they rejigged the
board, along with a new leadership team at the
helm, there were differences in the way decisions
were taken on a few fundamental issues. It is all
about what they stand for as an organisation and
the founders felt that it is getting compromised.
Hope to see it smoothens over a period of time.
What do you do with it?
It is often true that reputation is what comes into
your door and the magic is what you do with it.
Most of the time, a brands image, reputation,
 REPUTATIONAL
RISK

and perception are what the world frames based
on what the company has demonstrated. People
experience the company in different ways and
stages, and form an opinion. It is kind of an
overall perception of the world out there. It is
a pressure on the company to hold it that way
for long.You can see what Coke and PepsiCo is
going through now. They were the darlings of
soft drinks consumers in every household across
the globe and it was a cool thing to have a Pepsi
or a Coke.
With growing health consciousness in the
world, where sugar or sugar contents are
taboo, both these companies are trying to
reinvent and looking to reposition themselves
in their products, and ad campaigns to position
themselves as a responsible corporate. If they
do not do that pretty early, their products
will lose their share and be dropped for
health reasons which they will not have any
control over. PepsiCo CEO Indra Nooyi, and
chief scientist Mehmood Khan say they are
committed to making their products healthier,
empowering their employees, and encouraging
environmental responsibility. It is a strategic
move to sustain their reputation and market
share.
One industry which spends a lot of its time,
money, and effort in upholding a good social
image is pharmaceuticals. They have to be seen
as creating value, trustworthy, and safe to use
their products. One wrong move can destroy
their reputation and the perception of the
society about the company.
Mature organisations have managed to
proliferate it to their grass root levels and made
sure that everyone assumes this as part of their
responsibility at an emotional level and do it with
pride. As a development process, to ensure the
reputation of the company is maintained, few
measures are taken in the organization. A policy
in place will ensure action is taken against those
who tarnish the image of the company.
Conclusion
How much of this reflects in the philosophy
and fundamentals of an organisation? Are the
leaders and senior management talking enough
about it and are able to walk the talk? Is the
organisation willing to uphold the reputation
even at the cost of their earnings? Does the senior
leadership enjoy immunity in case of any act or
governance that reflects poorly on the company?
What action would the company take under
the circumstances? How much of this is non-
negotiable? Answers to these tough questions
define and help build and nurture the reputation
of an organisation.

Who is responsible?
Interestingly, there is no one function or
group responsible for managing a companys
reputation full time. At times, it is parked
ABOUT THE AUTHOR
with the corporate strategy or corporate
Shutterstock.com

Mukund Menon communications group since they deal a lot with

is Director- HR and
Communications, external groups. The CEO, MD, or chairman
International Paper assume that they are responsible for upholding
India.
the reputation of the company.

INDIAN MANAGEMENT APRIL 2017 31

Stretch
your goals
Risk management ought to be a strategic exercise rather than a reactive measure.

SURESH LULLA, QIMPRO CONSULTANTS PRIVATE LIMITED

32 INDIAN MANAGEMENT APRIL 2017


T
he early Greeks, Romans,
and Indians did not worry
about uncertaintythe
very idea would have been
foreign. They believed that
everything was predestined.
In India, we called it, and still
do, karma. Since then, the pendulum has swung
so far that we now believe that every system,
process, and product/service should be micro
analysed in terms of probability with respect
to uncontrollable variablespolitical, social,
COVER
STORY
economic, and environmental [developments], as
well as the market, technology, war, terror, and
so on; more specifically, in terms of probability of
failure in multiple alternative scenarios.
As a result, we have started worrying about
uncertainty and begun applying our skills to
estimate the odds. We call it risk management.
Risk management is an integral part of quality
management.
No surprises for customers
According to Dr J M Juran, the quality guru,
to manage finance, we use three managerial
processesfinancial planning, financial control,
and financial improvement. The focus is on the
shareholder.
Similarly, he articulated, to manage quality,
we use three managerial processesquality
planning, quality control, and quality
improvement. The focus is on the ultimate user
of the product/service. In quality planning, we
set the standard; in quality control, we maintain
the standard; and in quality improvement, we
challenge the standard.
Of the three quality management processes,
risk management plays a critical role in quality
planning. It is here that we build reliability into
our products/services as well as processes.
The mantra is zero surprises for the operators,
customers, and users.
Holistic view of risks
There is a tendency to want to compartmentalise
risks and sort them into distinct, mutually
exclusive categories. The underlying assumption
is that the consequences of the unforeseen event
will more or less be confined to a given area, for
example, financial or operational or safety.
In actuality, the fallout from unforeseen events
tends to affect multiple business areas. Therefore,
INDIAN MANAGEMENT APRIL 2017 33
 it may make more sense to take a holistic view
of risks, factoring in interdependencies. Think
Enron. Think Satyam.
Failures and disasters
Fear of major disasters and near-disasters has
resulted in product quality concerns being raised
to a position of prominence in the public mind.
In the early morning hours of December 3,
1984, forty tons of methyl isocyanate, hydrogen
cyanide, mono-methylamine, and other lethal
gases began spewing from Union Carbides
pesticide factory in Bhopal. Nobody outside the
factory was warned because the safety siren was
turned off. Not until the gas was upon them in
their beds, searing their eyes, filling their mouths
and lungs, did the communities of Bhopal realise
that their lives were in danger. Over half a million
people were exposed to the deadly cocktail.The
gases burned the tissues of the eyes and lungs,
entered the bloodstream, and damaged almost
every system in the body. Nobody knows how
many died, but over the next few days, more than
seven thousand death shrouds were sold in Bhopal.
On the night of the disaster, water (that was
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34 INDIAN MANAGEMENT APRIL 2017
used for washing the lines) entered the tank
containing methyl isocyanate through leaking
valves. The refrigeration unit, which should have
kept the methyl isocyanate close to zero degrees
centigrade, had been shut off by the company
officials to save on electricity bills. The entrance
of water into the tank, full of methyl isocyanate
at ambient temperature, triggered off an
exothermic runaway reaction and, consequently,
released the lethal gas mixture.
This is but one example. Remember the
explosion of space shuttle Challenger, which lost
all its crew on January 28, 1986? Or the crash
of Singapore Airlines flight SQ 006 at Taipeis
Chiang Kai Shek Airport on October 31, 2000?
Pilot C K Foong, a Malaysian, had 11,235 flying
hours. The passengers were from 18 different
countries.
All this is the tip of the iceberg of safety-related
failures and disasters. The lessons learned are:
Failure of product
Failure of process
Failure of system
Failure of management
Failure of individual

God lost his reputation
At the turn of the century, a nationally reputed
cardiac surgeon was appointed to conduct a
complex surgery, on a young girl, at a well-
established hospital in western India. The
surgeon was revered as God to humanity.
The best support team from a chain of
hospitals had been selected owing to the risk
factors that were inherent in this particular
case. Each team member brought unblemished
experience to the surgery. They had, in the past,
worked together in various combinations.
The patient was dressed for the surgery in her
room and transported to the operation theatre
at 7 am. Outside the theatre, at a distance,
basic seating had been provided for two family
members per patient being operated. Three
surgeries were in progress. Family members,
with stress lines crafted on their faces, silently
read from small religious
books. The silence was
Negative perceptions can deafening.
be born with just one The theatre doors had been
episode. shut for 70 minutes. Suddenly,
there was a power outage. The
stand-by generators failed to
trigger in the seven seconds norm. The patient
died. God lost his reputation. The lessons
learned are:
Support services should also be included in
risk assessments
Effectiveness is a function of interdependent
variables
Efficiency of equipment should be measured
regularly
When human life is at stake, reliability
engineering should be mandated
Possibility of sudden death of an established
reputation, even though the root cause lies
ABOUT THE AUTHOR elsewhere
Negative perceptions can be born with just
Suresh Lulla is
founder and mentor, one episode
Qimpro Consultants Negative perceptions can erode even a robust
Private Limited.
reputation
QUALITY
RISK
How Hong Kong Airport improved ERP in India
A young and progressive managing director of
a family-owned medium scale pump business
in western India had awarded an assignment
to a reputed international consulting firm to
implement ERP at his single location factory.
The assignment was now 18 months old.
Qimpro had also been awarded an assignment
to build a quality improvement culture at
the 700 employee-strong factory. Tangible
results had surfaced in terms of cost of poor
quality (COPQ) reduction within six months.
Consequently, Qimpro had earned the respect
of not only the managing director, but also the
senior management team.
The new Hong Kong airport had been
inaugurated and offered full service from the
very first day. There were very minor glitches,
only in luggage handling. The managing director
was at this new airport on the first day. He was
most impressed by the efficiency of the airport
processes, as well as proficiency of the staff
and workers.
Next day, back in India, the international
consulting firm informed him that ERP
implementation at his factory was now
complete. That was the good news. However,
they added, it was advisable to run the legacy
systems in parallel for the next three months.
There was a deafening silence before a
verbal explosion. The advice was simply not
acceptable. In terms of complexity, his factory
was a fraction of one percent of the new Hong
Kong airport. On an impulse, the managing
director called me to his room and lamented
about the ERP tragedy. He needed help. He
wished, at best, to run the legacy system for a
week, and then switch it off.
The following rapid fire conversation
followed:
What can you do for me?
I do not have any experience with ERP.
Think. Arent there any quality tools?
??????
INDIAN MANAGEMENT APRIL 2017 35
 QUALITY
RISK
Think. There must be.
Well. If you are open for an experiment.? the process or product/service. Failures also
Tell me!
I can try using Failure Mode & Effect
Analysis. Its called FMEA.
How many days do you need?
How many experienced minds can you give
me?
We formed ten teams. FMEA was applied by
each team to one of the ten critical processes
over the next 24 hours. The risks were
identified, and innovative
solutions were implemented to
Risk analysis is contain the multiple risks.
incomplete without In three days, the managing
director switched off all the
addressing the factor of related legacy processes. In
detection and multiple two weeks, the ERP system
uncontrollable variables. functioned as smooth as silk.
Reducing the legacy time,
reduced enormous COPQ.
The lessons learned are:
Leaders, who are driven by perfection, push
for out-of-the-box solutions
Leaders must be learners, particularly from
cross-industry perfection
Leaders who set stretched goals, apart from
results, enjoy the by-product of employee
motivation
Risk management is a top-down responsibility
Right-brain creative thinking is one of the
most underemployed assets of an organisation
Reducing the legacy time reduces COPQ
FMEA is a quality planning tool
The FMEA process
The objective of the failure mode and effect
analysis (FMEA) is to look for all the ways a
process or product/service can fail. Such a
failure occurs when the process or product/
service does not function as it should, or when
it malfunctions in some way.
36 INDIAN MANAGEMENT APRIL 2017
Failures are not limited to problems with
occur when the user makes a mistake. All
such failures should be included in FMEA.
Anything that can be done to assure the
product works correctly, regardless of how the
user operates it, will move it closer to 100%
customer satisfaction.
The ways in which a process or product/
service can fail are called failure modes. Each
failure mode has a potential effect, and some
effects are more likely to occur than others. In
addition, each potential effect has a relative risk
associated with it. The FMEA process is a way to
identify the failures, effects, and risks within a
process or product/service, and then eliminate
or reduce them.
The relative risk of a failure and its effects is
determined by three factors:
Severity: Consequence of the failure should it
occur
Occurrence: Probability or frequency of the
failure occurring
Detection: Probability of the failure being
detected before the impact of the effect is
realised.
Each potential failure mode and effect is rated
for each of these three factors on a scale ranging
from 1 to 10, low to high.
By multiplying the ratings of the three factors,
a risk priority number or RPN is determined
for each failure mode and effect. The maximum
RPN is 1000.
Final comment
Most organisations that do risk analysis and
management are content with addressing only
two factorsseverity and occurrence. They also
tend to address only market uncertainties. The
exercise is incomplete without addressing the
factor of detection and multiple uncontrollable
variables.
38 INDIAN MANAGEMENT APRIL 2017
 CASE
STUDY

Right fit?
Partners in life SuruchiWagh and Mohit Gundecha quit their lucrative jobs with the hope that
their idea would find acceptance in the corporate world.There was enough information and data to
establish that a confluence of behavioural sciences and technology would revolutionise HR.They held
a strong belief that the HR tech company they conceived would be able to scale up in a short period.
How did Jombay fare? Did they find acceptance among organisations following age-old HR processes?

W
agh, founder and
COO of Jombay,
used to work at
RMS, a leading
catastrophe
modelling
company, after
having studied at University of Southern
California. Jombay (which came from the
Bengali word jomay which literally means
solidifying or fit hai or jamtahai) was formed
in January 2010, with the strong belief that
every individual has a certain skill set which fits
a particular position and sectorfinding the
right fit is the key. Gundecha graduated from
Stanford University and later worked as head
of India operations with mig33, a mobile-first
community with more than 50 million users
before joining as CEO in August 2010. We saw
a number of our friends and acquaintances take
up jobs based on their gut feeling or anecdotal
information. We thought we could enable
people take an informed decision by using
psychometrics, explains Wagh. Jombay planned
to use psychometrics to analyse potential
candidates personality, motivation level, and
help them decide what kind of career they
should opt for.
The business idea took shape further after
they both identified the need of companies
to reimagine their HR and people processes
and take data-driven (and not biased or gut-
based) decisions around hiring, promoting,
and developing the right people. Jombay saw a
huge opportunity there, especially in the Indian
market as they figured that corporate India
wanted tools which are simple to use and offer
integrated analytics which could be customised
to their competency framework.
They had several ideas that were discussed,
including having a major thrust on product
innovation and experience, use of social media
and the internet for validation studies, and
intuitive reports. They could also work towards
building a highly validated, reliable, customisable,
and user-friendly psychometric assessment
product. This would help them carve a niche
for themselves as a unique, innovative and
insightful product that HR, line managers, and
business managers could use without hiring
psychologists and certified professionals for
report interpretation. They finalised on a B2C

INDIAN MANAGEMENT APRIL 2017 39


product that would help career decision-making.
With technology at the helm to solve people
problems, Jombay set out to become a tech-
enabled platform for HR managers to solve
efficiency problems.
Developments in HR in India
Technology ushered Since the 1980s, HR recruitment
processes have revolved around
in new ways of talent the application mode. Individuals
attraction, selection, applied for jobs based on
and acquisition. advertisements, or through the
referral mode. A majority of job
positions or vacancies were need
based, and the print media played a vital role
in the recruitment process. The application
tracking system, therefore, enjoyed a
tremendous staying power since the 1980s,
even while customer requirements and system
capabilities continuously evolved. Corporate
India, through the 1980s and 90s, underwent a
revolution of sorts by beginning to adapt to IT.
Meeting the basic purpose of the recruitment
process, the applicant tracking system would
help in tracking applicants from the point of
40 INDIAN MANAGEMENT APRIL 2017
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application to the point of hire. The problem
was that as technological interventions in
business increased and contemporary hiring
processes evolved, this system became a
limiting tool that could not accurately meet the
requirements of recruiters in the late 90s.
For most recruiters, the urgency of having a
basic system which was beyond an application
tracking system was evident. This urgency
increased over the 2000s, as the internet
made it easy for candidates to apply for jobs.
Technology ushered in new ways of talent
attraction, selection, and acquisition. Job
applications could be processed more efficiently
and with greater care, and more importantly in
a more accurate manner. The dynamic changes
that IT brought about led to new businesses
and companies being established. The huge
manpower requirement this created led to
tremendous business opportunity for startups
that could handle HR processes in sync with the
requirements of these new-age companies.
It was this opportunity that Wagh and
Gundecha wanted to cash in on, and their strong
academic credentials and business acumen

The use of the internet ensured that they got the basics
right in creating space for
for recruitment purposes
Jombay among other companies
is undoubtedly the most that were also looking to ride
striking development this wave.
for HR, but its practical They were quick to
understand that if there was
significance remains a
no automated way to capture
question of debate. candidate information that goes
beyond rsum, then recruiters
would end up doing a lot of guesswork. They
would potentially interview wrong people,
which would consume a significant portion
of their valuable time that could be spent on
higher-level activities. As they analysed the
models in operation of companies like SHL and
Thomas Assessments, they discovered that these
players had their own tools, which were not
necessarily developed for the Indian market.
Technology and HR
In the past few years, venture capitalists have
poured R1,000 crore into the HR startup
industry, and according to People Matters
estimates, the HR industry is now valued at
R30,000 crore. Globally, this influx is at an even
larger scale. According to a research study by
CB Insights, investments in HR technology were
recorded over $560 million in the first two
quarters of last year, while the total valuation
of funding in the space of HR technology since
2009 has been over $2.3 billion. Traditional
solutions to some routine tasks were getting
outdated, creating opportunities for startups to
establish themselves.
Startups were also looking to explore
and tap the markets by merely converting
opportunities into a simple Facebook
experience. Use of Facebook and other social
media helped in focusing on creating a product
for real humans, as well as seeking human
understanding of this model.
Growth of the internet meant that a
significant amount of recruitment would
CASE
STUDY
be done online. The use of the internet for
recruitment purposes is undoubtedly the most
striking development for HR, but its practical
significance remains a question of debate1. The
method of matching job seekers to employers
that emerged over the last few years was indeed
a good business opportunity to be tapped. But
could there be some scientific methods to do
the matching which would make this system
more accurate and useful? This aspect kept
coming up in every meeting that Wagh and
Gundecha had, to chart the future of Jombay.
HR challengesbetter, faster, cheaper,...
and more strategicinfluence the development
of what is now a broad marketplace of tools
to support the automation of the recruiting
process2. The internet had enabled the
companies to put job information in the hands
of job seekers quickly than ever before. Job
seekers too, could act on this information
instantly. The companys website holds the
ability to attract people3, however, what would
be the mechanism to ensure that those who
apply are the right people? Could Jombay
address and meet this requirement? Would they
be able to help people apply for the right job
that matched their skill set?
Websites are quick and a cheap recruitment
source4, and can be very efficient in retaining
employees for the long term in organisations5.
It was also widely believed that if the candidates
submitted their rsum online on their own,
they were tempted to remain much longer as
employees than through other recruitment
channels. Organisations have long been
concerned with attracting and retaining highly
talented employees. The primary reason
for this is that they depend on the skills and
talents of their workforce to compete in
an everchanging global environment6. In
order to facilitate the recruitment process,
organisations were increasingly using electronic
HR systems, including webbased job sites,
portals, and kiosks to attract job applicants.
INDIAN MANAGEMENT APRIL 2017 41
The opportunity definitely Wagh and Gundecha could see
existed in the fact that that there was more to this
challengeit was not merely
there was a high risk of quick communication, easy
low return on investment access, and easy application to
if the effort was not jobs. The advantage would be to
directed at the right provide the right talent in the
shortest possible time. With the
people.
risk of high misjudged hiring,
pressure of volume hiring, and
the challenge to acquire talent for high-impact
jobs, recruiters and HR executives are faced
with a daunting task to ensure quality of hire
at no increased cost and time. Riding on the
wave of productising such HR problems, the
opportunity lay in being able to offer companies
a tech-enabled system which would save on
their time, efforts, and other resources. Could
there be a bouquet of online products Jombay
could put together for companies, with a high
degree of customisation and enhanced user
experience? Not just for recruitment, but also
for promotions and development efforts?
Wagh and Gundecha listed on their drawing
board the broad areas a company like theirs
could possibly address:
Recruitment and selectioncampus, laterals,
frontline, value-based, etc.
Competency assessments and development
High-potential (HiPo) identification
Promotion
Performance review and appraisal
Training needs identification
Leadership development
First-time manager evaluation
Succession planning
Individual development plan tracking
Career planning and coaching
Organisations had started adopting innovative
tools, systems, and processes along these phases
to ensure that demand for the right talent
was met across recruitment, promotion, and
development processes and that these were
standardised and free of bias. The evolving
42 INDIAN MANAGEMENT APRIL 2017
discipline of talent analytics combined employee
data with business data to help companies make
better business decisions about people. Critical
questions, such as whom to hire and promote,
how to manage people and their training needs,
and what drives performance, engagement,
retention, and customers, could be understood
statistically and answered with data.
The opportunity definitely existed in the fact
that organisations ended up investing significant
time and money to hire, promote, and develop
talent, and there was a high risk of low return
on investment if the effort was not directed at
the right people.
In the first three years of their operation,
they profiled a million customers using
social and digital media and in 2013, Jombay
decided to change gears and move towards
helping companies reduce their errors of
wrong hiring through a data-driven approach.
It decided to be the company that would not
only solve the efficiency problem but also
achieve standardisation and scale in conducting
assessments and development across the
organisation.
Moving gears
Psychometrics is the field of study which dealt
with measuring knowledge, abilities, attitudes,
and personality traits. It is primarily concerned
with the study of measurement instruments
such as questionnaires and tests. Much of the
early theoretical and applied work in this field
was undertaken in an attempt to measure
intelligence. Originally built during the World
War era, psychometric algorithms had been
mimicked as a tool and model across the
globe. This led HR professionals to question
the validity and credibility of psychometric
assessments or discount the use of such tools.
Extensive research by Wagh and Gundecha
led them to the fact that psychometric testing
was being used by over 80% of Fortune 500
companies in the US and by over 75% of the

Social Profile
Shutterstock.com
Their research led to the Times Top 100 companies in
introduction of a new the UK. IT companies, financial
institutions, management
test for self-evaluation, consultancies, local authorities,
psychometric selfie.
civil services, police forces,
fire services, and the armed
forces were some of the
other organisations that made extensive use
of psychometric testing. As an indicator of
ones personality, preferences and abilities,
these tests could help prospective employers
find the best match for a particular occupation
and working environment. As a recruitment
and selection tool, these tests could be applied
in a straightforward way at the early stages of
selection to screen out those who would be
unsuitable for the job.
Its a very old science which evolved during
World War II military recruitments, Gundecha
opined, adding that human behaviour could
be broadly classified into five categories
personality, motivation, emotional intelligence,
ABOUT THE AUTHOR
organisation skills, and attitude. More often
than not, people get hired for their skills
Dr Madhavi
Lokhande is and fired for their behaviour, said Wagh.
Dean, WeSchool, The scientific way of selection would have to
Bengaluru campus.
have questionswhich could be centered on
CASE
STUDY
peoples understanding, risk-taking, or other
behavioural patterns that could gauge the
person behind the rsum. There are a number
of things you get to know about the person
who you would, otherwise, not be able to learn
with just the rsum, said Gundecha. Could
they ensure that organisations would benefit
from such an analysis? They were aware that the
results need not be 100% accurate. No tool can
completely measure human behaviour but we
can get 80% close to what the person is really
like, added Wagh. They set out to understand
the state of psychometric assessments used
by organisations in India and listed out the
tests that were employed to assess individuals.
They also studied the industry approach to
identify the gaps in the available psychometric
assessment tools and the need for improvement.
Their research led to the introduction of a new
test for self-evaluation, psychometric selfie.
Individual can take the test to assess their areas
of strength and weakness. The tool has already
become one of their most popular products,
claims Gundecha.
Jombay continually strives to create an easy-to-
use self-serve platform with intuitive reporting
capabilities. It democratises the use of people
science across SMEs, offering them the accuracy
of a psychologist or HR consultant through the
platform. The core team includes behavioural
scientists and data analysts from Stanford
University and University of Southern California.
Jombay believes that a combination of
humanities and technology can shape the future
of HR. The company was selected among Indias
most promising HR companies by People Matters
and National HRD Network for 2014, and they
received funding from Nirvana Venture Advisors.
References
1. Torrington D., Hall L. and Taylor S., 2005
2. Reynolds D.H. and Weiner J.A., 2009
3. Cohen D., 2001
4. Price A., 2000
5. Bach S., 2005
6. Guental H.G. and Stone D.L., 2005
INDIAN MANAGEMENT APRIL 2017 43
44 INDIAN MANAGEMENT APRIL 2017
Balancing cultural diversities is key to improving organisational effectiveness.
BRIG. B M KAPOOR, CLASSIQUE MANAGEMENT SYSTEMS, AND
CORPORATE
ARUN JINDAL CULTURE

For better
harmony

T
he world is flat, in the words of
Thomas Friedman. This provides equal
opportunity to everybody to market
their goods and services anywhere
and everywhere. The resulting severe
competition has forced business
entities to find new ways for survival
and growth. Concepts of organisational effectiveness and
culture have, therefore, assumed greater importance.
Organisational effectiveness can be defined as the
extent to which a company has succeeded in correlating
and integrating its primary sub-systems and optimising
the overall achievement of goals, within the constraints
of scant resources and environmental reality. The
external environment needs to be managed. The internal
environment requires cohesion, commitment, and
efficient resource utilisation, as also the satisfaction of
members needs.
Culture is the set of shared values and understanding
handed down by generations or imposed by society. It
has many sub-systems that influence people and their
behaviourfor example, religion, education, values
and beliefs, kinship, and so on. Peters and Waterman
(1988), in In Search of Excellence, focussed on the value of

INDIAN MANAGEMENT APRIL 2017 45

FIGURE 1 McKINSEY 7S FRAMEWORK
STRATEGY
STRUCTURE SYSTEMS
SHARED
VALUES
STAFFING SKILLS SKILLS
STYLE
Source: Peters & Waterman, 1988
an identifiable culture in excellent companies,
and felt that a strong culture obviates the
need for formal systems. They emphasised the
importance of culturethey called it shared
valuesamong excellent companies and
said that it needs to be directed towards the
marketplace. Their 7S Framework with shared
values at the core is shown in Figure 1.
Reliable Auto
Reliable Auto was one of the largest car
dealership-cum-workshop of a reputed auto
brand in the outlying areas of Delhi NCR. It was
set up nine years ago. The layout and facilities
were decided by the manufacturer. Many trials
of new processes were done there. It was
treated as a model dealership and was usually
the first port of call for foreign visitors of the
manufacturer.
ABOUT THE AUTHOR
Any large car dealership has four distinct
Brig B M Kapoor is
sectionssales, service, body shop, and back
Director, Classique office. It is a manpower-intensive business.
Management Reliable Auto had over 400 employees from
Systems.
diverse backgrounds. The biggest challenge
46 INDIAN MANAGEMENT APRIL 2017
was managing their different cultures and
inculcating shared values.
The body shop workmen were mostly eighth
grade passedalmost 50% of them belonged
to a minority community. They were from large
families and lived mostly in tenements in the
urban villages nearby, and their literacy, health,
and hygiene were poor. Use of gutka and pan
masala was common. Discipline was inadequate
too.
The service shop workmen were mostly ITI
trained. They could read manuals in Hindi and
read and make notes in rudimentary English.
They lived in high-density population sectors
usually in two-room sets along with their
parents. Their health and hygiene as well as
discipline were distinctly better.
The sales and back office staff were mostly
graduates, some being MBAs from private
colleges. Their proficiency in English and Hindi
was average, most being computer-literate.
Many were married. They came from middle
class backgrounds and stayed with parents. A
large number were from the hills and lived in
shared apartments with friends and colleagues.
According to Deresky (2011), organisational
culture exists within a societal culture. It
varies from one organisation to another, and
represents the expectations of the members
of a group. Culture is a variable but a key
function for managers. Peoples beliefs,
attitudes, and behaviour can be changed through
organisational interventions. One of the roles
of managers is to develop organisational culture
for sustained commitment. There are many
influences on any organisational culture
values, organisational climate, and management
style. Of these, values have an important role in
shaping culture.
Representatives of the manufacturer often
visited Reliable Auto to test new processes.
One frequent grievance was regarding the
condition of workmens changing rooms and
toilets. Another was poor recording of customer

feedback. Varying value sets of the employees
were posing as a challenge in attaining optimal
effectiveness.
A study showed that western-style toilets
were a problem; toilet seats were often getting
damaged because workmen were mostly
squatting on them, and there was water spillage
on the floor. The seats were hence replaced
with Indian-style floor pans, and this solved
the problem. Additional space was created for
changing rooms and new lockers were placed.
Each worker was allotted a locker. This took
care of the changing room issue.
Many workmen, especially in the body shop,
ate their meals sitting on the shop floor. Seating
capacity in the dining room was increased and
chairs were replaced with benches. It was then
found that though workmen in the service
section started using the dining
room, those in the body shop
Managing differences still preferred to eat on the
under one roof is a major shop floor. On inquiry, it was
challenge but essential realised that they ate a meagre
fare of chapatis with aloo sabzi,
for organisational
onions, and green chillies, and
effectiveness. did not want others to see
their food. This problem was
overcome by placing tables and benches on the
shop floor itself.
Women handling feedback from customers
had difficulties in documenting it. Since most
customers communicated in Hindi, they had
to translate it into English. However, their
vocabulary was limited and as a result, the
records were incomprehensible. So it was
decided to train them to record conversations
in Hindi, in Roman script. There was initial
resistance from the manufacturer who wanted
the records in English itself, but they later
ABOUT THE AUTHOR accepted the suggestion as they were convinced
Arun Jindal has that the records would be more accurate. This
worked for SIEL and then became the standard practice.
other organisations
for five decades.
Many customers of Reliable Auto wanted
their cars to be picked up from their residence/
CORPORATE
CULTURE
office for servicing and then returned. Over a
dozen drivers were employed for this. The cars
often met with accidents on their way to and
from the workshop, resulting in loss of revenue
and reputation. It was then decided to employ
drivers who had at least five years experience
on NCR roads. They were provided training,
both theoretical and practical, and give special
uniforms. It was explained to them that they
were the interface between the customer and
the dealership and hence played a major role in
ensuring customer satisfaction. This changed the
situation dramatically and there was not a single
accident in the next two years.
It is clear that India lives in two centuries
at the same timethere are huge differences
in education levels, social mores, food habits,
etc. Managing these differences under one
roof is a major challenge but essential for
organisational effectiveness.
References
Deresky, H., 2011. International management: Managing across
borders and cultures. 7thed. New York: Pearson education,
Prentice Hall.
Graham, R., 1995. A literature review: The management of
organizational culture is central to recent HRM ideas and
practices. Stirling, UK: University of Stirling.
Hofstede, G., 1991 Culture and organizations. London: Harper
Collins.
Legge, K., 1994. Managing culture: fact or fiction? Personnel
Management, 2nd Ed. Oxford: Blackwell.
Ogbonna, E., 1992. Organization culture and human resource
management: dilemmas and contradictions. Reassessing
Human Resource Management. London: Sage.
Peters, D. J. & Waterman, R. H., 1988. In search of excellence:
lessons from Americas best run companies. New York: Grand
Central Publishing.
Vise, D. A., 2005.The Google story. London: Pan Macmillan.
shutterstock.com
INDIAN MANAGEMENT APRIL 2017 47
48 INDIAN MANAGEMENT APRIL 2017
By factoring in aspects outside the realm of rational economics, managers can turn
every risk into an opportunity.
SHLOMO MAITAL, SAMUEL NEAMAN INSTITUTE FOR ADVANCED
STUDIES IN SCIENCE AND TECHNOLOGY;
DVR SESHADRI, INDIAN SCHOOL OF BUSINESS
Tune into the
risk radar
I
t is high time that I, an economist and
educator for the past 50 years, made
a full confession. I confess that we
economists have committed four serious
crimes against humanity.
First, we are guilty of corner-office
myopia. We sit in our offices, pore over
numbers and believe this, and our theories equip
us to make unerring predictions. We ignore
the wisdom of crowds, the marketplace, the
shops, the factories, and the vital necessity of
being there, in the real world, daily, to truly
sense what is happening now and what may
happen tomorrow.
Second, our unerring predictions,
sometimes sold for high prices, are usually
erroneous. As economist John Kay has found,
economic forecasters all say more or less the
same thing at the same time. And what it is that
they say is almost always wrong. This is in large
part due to corner-office myopia*.
STRATEGY
Third, opaque jargon. We say such things
asthe micro-political foundation of my well-
identified structural model, built on rational
expectations, predicts dynamic instability in
financial options decisions at the intensive
margin. There is more than enough fog in
the outlook for the global economy, without
opaque jargon.
Fourth, hubris. We foisted the ideology of
unfettered free markets on the world and, in
2008, nearly destroyed it as a result. The world is
still struggling to recover.
A Russian joke tells of Premier Khrushchev
reviewing a May Day parade on Red Square. The
massive crowd views tanks, missiles, and modern
weaponry roll byin utter silence. Then an
old Zil truck chugs by with four old men in the
back, waving. The crowd goes wild with applause
and cheering. What is going on? journalists
ask Khrushchev. Oh, he says, those four are
my economists. They are capable of unlimited
INDIAN MANAGEMENT APRIL 2017 49
 destruction. After the global financial crisis of
2008, originating in the US, the joke may not be
entirely funny.
Penitence
So, before it is too late, I wish to make penitence.
To do so, I have enlisted a wise and experienced
colleague Professor DVR Seshadri, Clinical
Full Professor of Business at Indian School of
Business. He and I have written a book designed
to bring the powerful tools of
macroeconomics to the daily
For students of analytical routine of managers,
management, economics without the obfuscation of
fails to convey its economists.
powerful relevance, by Here, we say, are eight simple
concepts of macroeconomics,
cloaking it in a blur of
without jargon, explained in
mathematics, data, words you can understand, then
and jargon. practise and use.
Global managers! Think for
yourself! You cannot do any
worse than economists, and almost certainly, a
great deal better.
We have titled our book Smartonomics,
the insightful use of simple, powerful
macroeconomic tools to identify and capture
global business opportunities for creating value in
a chaotic uncertain world.
Shortly after we corrected the proofs, a big
dollop of added uncertainty was tossed into
the pot, with the election of Donald Trump as
President of the United States. In the wake of
the November 8 election, the dollar rose, as did
US stocks.
What will happen to interest rates (Trump
wants them to rise)? To trade (Trump wants a
ABOUT THE AUTHOR better deal for the US), international relations,
Shlomo Maital is the world economy, NATO, globalisation, and
Senior Research basically, everything? Global managersand
Fellow, Samuel
Neaman Institute
today every manager is global, or should be, in
for Advanced thinking and philosophyneed to think through
Studies in Science these issues by themselves (and not rely on
and Technology.
economists). Our macroeconomic tools can help.
50 INDIAN MANAGEMENT APRIL 2017
I have taught economics to MBA students for
several decades. In my experience, and surveys
confirm it, they generally are reluctant to learn
about economics. They prefer more amenable
subjects such as marketing, innovation, and
strategy. I do not blame them. Publishers tell me
that the word economics in a book title cuts
sale by at least half. For students of management,
economics fails to convey its powerful relevance,
by cloaking it in a blur of mathematics, data,
and jargon.
Here are a few examples of issues that global
managers have to pay attention to regularly, else
risk being fossilised. Global managers have no
choice but to think for themselves, and think
differently from the crowd.
Inflation: Many countries (like Japan, EU
countries, and to a degree, the US) now suffer
from deflation (falling prices).Yet the world is
awash in money, as Central Banks battle the 2008
global slowdown by loosening credit.
When will the huge increase in money supply,
in the US, EU, and elsewhere, begin to cause
goods prices to rise? And how will this create
opportunities for global managers? Inflation,
like cholesterol, has good and bad types, like
HDL and LDL; demand-side inflation is good
for financial markets and employment, while
supply-side inflation is bad. We show how to do
the diagnosis.
How is the money supply expanded? How are
interest rates increased or decreased? Why is a
little-used piece of data (velocity of money
the rate at which money changes hands) a vital
variable, worth tracking very closely? Velocity
can yield strong insights, for instance, into the
impact of demonetisation on Indias economic
momentum.
Booms and Busts: Global growth in Gross
Domestic Product (GDP) was 3.1% in 2015,
3.4% in 2016, and will rise slightly to 3.6% in
2017. What is GDP anyway? And what drives its
growth? How can smart managers build their
own simple forecasting method?
 STRATEGY

economy. [As Treasury Secretary John Connolly

said in 1973, the dollar is our (Americas)
currency, and your (the worlds) problem. It is
indeed!]. This dual role of the dollar is generating
uncertainty and instability, and will continue to
do so until the issue is resolved.
And a third, and most serious, internal
contradictionpolitics worldwide is becoming
more and more local and fragmented, while
economics, money, and trade are all global and
globalised (for now). Can globalisation survive
and thrive in such a world?
Managers who grasp these global

Shutterstock.com
contradictions will be better equipped to
prepare for the fallout resulting from them. And
there may even be ways to profit from them;
forewarned is forearmed.
Prussian military analyst Carl von Clausewitz
wrote in 1832, 184 years ago, that three
If managers can A country is a business in quarters of the factors on which action in war is
enlist economists that GDP accounts for a nation based are wrapped in a fog of greater or lesser
are similar to a businesss profit- uncertainty. A sensitive and discriminating
macroeconomic tools, and-loss statement. Managers judgment is called for; a skilled intelligence to
understand and apply accustomed to analysing P&L scent out the truth.
them wisely, tempering statements can apply their skill He might well have said this regarding the
them with keen listening, to national P&L statements, and fog of peace as well. More than three quarters
gain many insights. of global managers decisions regarding future
they can spot opportunities
The world economy is strategy are wrapped in fog. And as a result, as
others cannot. struggling with three serious von Clausewitz said, skilled intelligence to scent
internal contradictions, whose out the truth is crucial.
resolution will drive events both in the short and If managers can enlist economists
long terms. macroeconomic tools, understand and apply
One is the desperate under-saving of Western them wisely, tempering them with keen listening
economies, causing huge imbalance in budgets and observation of what people are thinking
and trade accounts, and building economies and doing, they can spot opportunities others
resting on debt, borrowing, and personal cannot. This skill is no longer a luxury for
spending, when the opposite is needed. (The global managers. It is a necessary skill for global
West is mainly grasshoppers, who in the Fable managers to survive and thrive in todays VUCA
fiddle instead of gathering food; the East, ants world. Each global manager has to figure out all
ABOUT THE AUTHOR
who gather food for the coming winter.) these and much more by themselves.
DVR Seshadri
is Clinical Full
A second is the fact that while the dollar is
Professor of presently the worlds key currency, it is also *https://www.johnkay.com/1995/09/25/the-failures-of-economic-
Business, Indian forecasting/
Americas currency, and has been overprinted (The article is based on the book Smartonomics: Simple, Powerful
School of Business.
and over-expanded to spur the weak US Macroeconomic Tools for Success in an Uncertain World.)

INDIAN MANAGEMENT APRIL 2017 51

 BETWEEN
THE
COVERS

SUMMARY
G LAKSHMANAN ON
SPRINT

EXTRACT
MEGA TECH

BOOKSHELF

52 INDIAN MANAGEMENT JANUARY 2017

 Shutterstock.com

INDIAN MANAGEMENT JANUARY 2017 53

 A unique five-day process for solving tough problems.
G LAKSHMANAN, INFOSYS
BOOK
SUMMARY

Accelerate
discovering a
winning idea

Y
ou are a leader or a manager behave around humans). The concept has moved
in a startup or a large to large corporates tooPrudential Insurance
corporateyou have a (financial wellness project), and KLM Airlines
big problem, challenge, (enhancing airport experience).
opportunity, or idea. These Most products or services fail at the human
difficult problems require level. The idea is to fast-forward a project, so
focused attention to solve, you can see what the end result might look
but you do not know where to begin. Big like and how the market will react. Sprint was
ABOUT THE AUTHOR challenges get stuck in debates, theories, and initially applied to software and hardware user
G Lakshmanan is hunches are plentiful, but progress is rare. With interface design. However, now the process has
Senior Principal,
Infosys Limited.
all the noise, distractions, and demands for your been adopted in branding, business ventures
attention at the office, it is almost impossible to in the field of oncology, robotics, coffee, and
SPRINT: HOW see which issues are really the most critical in a dozens more.
TO SOLVE BIG big challenge.You are not alone!
PROBLEMS AND Sprint: How to Solve Big Problems and Test New Sprint in short
TEST NEW IDEAS Ideas in Just Five Days, a new book by Jake What are those just five days?
IN JUST FIVE DAYS
Knapp with John Zeratsky and Braden Kowitz, Monday: crystallise one ambitious problem to
Author:
Jake Knapp, John partners at Google Ventures, offers a process solve
Zeratsky, and Braden for identifying the best solution to a problem, Tuesday: work independently to sketch potential
Kowitz developing a prototype, and testing it with solutions
Publisher: customers. Jake and team have conducted Wednesday: decide on one solution to prototype
Bantam Press Thursday: build a realistic prototype
more than 100 sprints across Google Ventures
Pages: Friday: try the prototype with five potential
288 (Paperback) portfolio companies such as Blue Bottle Coffee
(online store software project), and Savioke customers
Price:
R699 (how should their hotel room service robot If you learn fast and fail cheap, you can

54 INDIAN MANAGEMENT APRIL 2017


accelerate discovering a winning idea. Steve
Jobs said that a lot
of times, people do not know what they want
until you show it
to them.
The sprint process can help. Let us look at a
few of the tools and techniques used by Jake and
team:
Start at the end
Starting at the end is like being handed the keys
to the time machine. Why are we doing this
project? Where do we want to be in six months,
a year, or even five years from now? While
writing long-term goals, be optimistic; imagine
a perfect future.
While identifying risks, be pessimistic.
Imagine you are going forward in time one year,
and your project was a disaster. How did your
goal go wrong?
Facade, not product
Facadea prototype which appears real. The
ideal prototype should be Goldilocks quality.
If the quality is too low, people will not believe
the prototype is a real product or service. If it is
too high, you will be working
all night and you still will not finish. Goldilocks
quality is not too high, not too low, but just right.
Small data big insights
Five is the magic numbertry the prototype
with five potential customers. Research shows
85% of the problems were observed after just
five people testing it.
Testing with more people did not lead to
many more insightsjust a lot more work. The
number of findings quickly reaches the point of
diminishing returns.
The book offers many more tools and
techniques such as solve the surface first,
oceans seven, how might we, lightning demos,
crazy 8s, and many more.
INDIAN MANAGEMENT APRIL 2017 55
 The threat of AI and future technologies being misused against humanity is
getting real by the day.
BOOK
EXTRACT

AI: a
dystopian
future?
S
uppose you enter a dark room in an unknown
building.You may panic about some potential
monsters lurking in the dark. Or just turn on the
light, to avoid painfully bumping into the furniture.
The dark room is the future of artificial intelligence
(AI). Unfortunately, there are people who believe
that, as we step into the room, we may run into
some evil, ultra-intelligent machines. Fear of some kind of
ogre, such as a Golem or a Frankensteins monster, is as old as
human memory. The computerised version of such fear dates
to the 1960s, when Irving John Good, a British mathematician
who worked as a cryptologist at Bletchley Park with Alan
Turing, made the following observation:
Let an ultra-intelligent machine be defined as a machine that can
far surpass all the intellectual activities of any man however clever.
MEGA TECH Since the design of machines is one of these intellectual activities, an
TECHNOLOGY IN
2050 ultra-intelligent machine could design even better machines; there
Author: would then unquestionably be an intelligence explosion, and the
Daniel Franklin intelligence of man would be left far behind.Thus the first
Publisher: ultra-intelligent machine is the last invention that man need ever make, provided that the machine is docile
Hachette India enough to tell us how to keep it under control. It is curious that this point is made so seldom outside of science
ISBN: fiction. It is sometimes worthwhile to take science fiction seriously.
978I78I254622
Once ultra-intelligent machines become a reality, they may not be docile at all but enslave us as a
Pages:
256 subspecies, ignore our rights and pursue their own ends, regardless of the effects that this has on our
Price: lives. If this sounds too incredible to be taken seriously, fast-forward half a century and the amazing
R499 developments in our digital technologies have led many people to believe that Goods intelligence

56 INDIAN MANAGEMENT APRIL 2017

INDIAN MANAGEMENT APRIL 2017 57
 BOOK
EXTRACT
explosion, sometimes known as Singularity,
may be a serious risk, and that the end of our
species may be near if we are not careful.
Stephen Hawking, for example, has stated:
I think the development of full artificial
intelligence could spell the end of the human
race. Yet this is as correct as the following
conditional: if the Four Horsemen of the
Apocalypse were to appear, then we would be
in even deeper trouble. The problem is with the
premise. Bill Gates, the founder of Microsoft, is
equally concerned:
I am in the camp that is concerned about super
intelligence. First the machines will do a lot of jobs
for us and not be super intelligent.That should be
positive if we manage it well. A few decades after
that though the intelligence is strong enough to be
a concern. I agree with Elon Musk and some others
on this and dont understand why some people are
not concerned.
And this is what Elon Musk, CEO of Tesla, a
US carmaker, said:
I think we should be very careful about artificial
intelligence. If I were to guess like what our biggest
existential threat is, its probably that. So we need to
be very careful with the artificial intelligence.
Increasingly scientists think there should be
some regulatory oversight maybe at the national
and international level, just to make sure that we
dont do something very foolish.With artificial
intelligence we are summoning the demon. In
all those stories where theres the guy with the
pentagram and the holy water, its like yeah hes
sure he can control the demon. Didnt work out.
Just in case you thought predictions by experts
were a reliable guide, think again. There are
many staggeringly wrong technological forecasts
by great experts. For example, in 2004 Gates
predicted: Two years from now, spam will be
solved. And Musk speculates that the chance
that we are not living in a computer simulation is
one in billions. That is, you are not real; you are
reading this within the Matrix. Literally.
58 INDIAN MANAGEMENT APRIL 2017
The reality is more trivial. Current and
foreseeable smart technologies have the
intelligence of an abacus: that is, zero. The
trouble is always human stupidity or evil nature.
On March 24th 2016 Microsoft introduced Tay,
an AI-based chat robot, to Twitter. The company
had to remove it only 16 hours later. It was
supposed to become increasingly smarter as
it interacted with humans. Instead, it quickly
became an evil, Hitler-loving, Holocaust-
denying, incestual sex-promoting, Bush did
9/11-proclaiming chatterbox. Why? Because it
worked no better than kitchen paper, absorbing
and being shaped by the tricky and nasty
messages sent to it. Microsoft had to apologise.
This is the state of AI today, and for any
realistically foreseeable future. Computers still
fail to find printers that are right there, next to
them.Yet the fact that full AI is science fiction is
not a reason to be complacent. On the contrary,
after so much distracting and irresponsible
speculation about the fanciful risks of ultra-
intelligent machines, it is time to turn on the
light, stop worrying about sci-fi scenarios,
and start focusing on AIs actual and serious
challenges, in order to avoid making painful
and costly mistakes in the design and use of our
smart technologies.
Pushing the envelope
One fundamental point needs to be understood to
clarify such challenges. The success of AI is largely
due to the fact that we are building an AI-friendly
environment, in which smart technologies find
themselves at home and we are more like scuba
divers. It is the world that is adapting to AI not
vice versa. Lets see what this means.
In industrial robotics, the three-dimensional
space that defines the boundaries within which
a robot can work successfully is defined as the
robots envelope.
Excerpted with permission from Megatech: Technology in 2050,
published by Hachette India.
 BOOK
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They explore topics such
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62 INDIAN MANAGEMENT APRIL 2017
Automation and digitisation can change the way marketing functions.
VEERCHAND BOTHRA, NETCORE SOLUTIONS
MARKETING

Mass
personalisation

W
e are shifting
money
away from
things like
conferences,
physical
samples or
building high-profile face-to-face exhibits and instead
investing in marketing automation infrastructure,
data, and content... And when we hire, we look for
people with digital capabilities, who can do things like
run a marketing automation platform, a data analytics
function, or execute and listen to multiple social
media properties, says John Dragoon, executive vice-
president and CMO, Houghton Mifflin Harcourt, in a
report by The Economist Intelligence Unit Survey. This
statement stands testimony to the digital revolution the
world is witnessing. [Consequently,] a large number
of successful companies are adopting marketing
automation solutions to increase the overall success
rate of their marketing campaigns across channels.
The marketing automation industry is worth about
$5.5 billion and drives lead generation and prospect
nurturing globally. With brands spending increasingly
more time and money on marketing in a digital
world, it is critical to understand the key trends that

INDIAN MANAGEMENT APRIL 2017 63

The concept of prime will dominate the marketing
time is gradually automation space.
becoming obsolete. Chatbots: Chatbots have been
Every minute is hailed as the biggest technology
prime time. wave in the past twenty years.
They have brought a paradigm
shift and will have a huge impact on customer
experience. Chatbots are already engaging
consumers on brands properties such as website
and mobile apps. Brands will aim to create hyper-
personalised conversations with consumers across
these mediums by using real-time analytics.
Several industry surveys have highlighted that
approximately 49.4% of consumers have shown
interest in connecting with a brand through
chatbots over SMSes. HDFC just announced a
chatbot that will help customers in selecting the
right insurance plan for themselves. This is just
the tip of the iceberg and as technology evolves,
chatbots will move beyond just the owned
mediums.
We believe the biggest revolution in chatbots
will be driven by messaging apps. Smartphone
users today use personal messaging apps several
times a day. For brands, it is imperative to be
present where their customers are. Hence, in
the next five years, they would need to leverage
Shutterstock.com
64 INDIAN MANAGEMENT APRIL 2017
chatbots to create meaningful conversations with
consumers. In a country like India, WhatsApp is
ubiquitous. Hence, if chatbots start invading apps
such as WhatsApp, the dynamics of marketing
will shift. Marketers, in future, would combine
machine learning, deep learning, AI, natural
language processing, and recommendation
engines to fine-tune their chatbots.
The rise of in-the-moment campaigns:
Real-time marketing has shown great results
when it comes to driving conversions and
boosting ROI. Traditionally, marketing activities
were carried out based on sample data. With
developments in technology, marketers moved
towards relying on historical customer data
for a more accurate marketing strategy. On-
the-calendar campaigns were planned based on
this, where a series of events or messages are
scheduled in advance based on the customers
past activity data and segmentation logic.
The concept of prime time is gradually
becoming obsolete. Every minute is prime time
because customers are always looking at their
phones and texting their friends, even when they
are watching TV. Marketing has now evolved to
use real-time data for creating in-the-moment
campaigns. Although research has shown that
superlative customer experience is critical to a
brands success, less than a third of marketers
use real-time marketing.
Like a salesperson in a bricks and mortar
store, real-time marketing allows to monitor
a customers web activity in real time and
immediately send them a message based on it
(via a chat window asking if they need help or a
sticky bar with a code for additional discounts to
nudge them towards a purchase, etc.) Marketers
can use real-time social listening platforms so
that a customers activity on social media triggers
marketing messages.
Audience targeting, eyeing OTS: Audience
targeting is the marketers ability to reach out to

their prospects through other paid channels. This
is going to gain a lot of traction in India through
options like Facebook Custom Audience and
Google Customer Match. With more publishers
allowing access to audience targeting, mobile and
other social media targeting are going to open
up new marketing channels. Both services are
expected to gain traction in the next few years.
Marketers would upload their customer lists on
the platforms and then show customised brand
messages to those consumers utilising the power
of customer segmentation principle. More and
more audience targeting will be driven by cross-
channel marketing strategy
with a view to increasing the
Mass 1:1 personalisation customers opportunity to
will be the norm for see (OTS).
the smart marketer of
the future. Unified view of the
customer: Great customer
experience begins with strong
data. Marketers can collect data across several
channels and touch points to understand
customer behaviour. Marketers are now going
to become even more reliant on data. But
to leverage it optimally, from a customers
offline and online activities, marketers will
need a unified view of the customer. With the
smartphone revolution, consumers leave behind
implicit and explicit data spread across multiple
vendors. Marketers are already collecting
customer data to understand their behaviour.
However, this reliance on customers digital
pheromones is going to increase in the next
few years. From data silos, marketers will shift
towards unified view of the customer data.
Analytics: There are several types of
analyticssegmentation analytics, cohort
ABOUT THE AUTHOR
analytics, attribute analytics, to name a
VeerChand Bothra
few. These basic analytics are still highly
is Chief Innovation underutilised in India. While predictive analytics
Officer, Netcore has been a long-used buzzword, marketers
Solutions.
are slowly waking up to the potential of
MARKETING
such easier-to-implement analytics to drive
marketing change and create real impact in
the years to come. Adoption of predictive
analytics is expected to witness a surge
bolstered by the need to attain higher RoI and
reactivate dormant customers. It will be more
effectively utilised to forecast the next steps
of a customer and push relevant, personalised
campaigns.Based on the analysis, marketers can
decide whether to cross-sell or upsell, which
customers show signs of becoming premium,
high-segment customers, and then target them
accordingly.
Mass hyper-personalisation: Today, the
competitive landscape is defined by customer
experience. The future is going to be dominated
by brands that have customised their marketing
activities. With multiplicity of devices or
mediums, consumers today are inundated
with marketing messages. So, relevant and
hyper-personalised messaging is the critical
differentiator that will save messages from
being ignored or spammed. With this message
deluge, which is largely non-personal in nature,
brands risk pushing customers from customer
delight to customer annoyance. Mass 1:1
personalisation will be the norm for the smart
marketer of the future.
Rise of CDOs: India is increasingly becoming
a cashless economy, particularly in light of the
recent government policies. So now, more
than ever before, brands need to go digital or
risk failure. Chief digital officers (CDOs) and
chief data officers are the leaders driving this
organisational change. A key pillar of a digital
organisation is digital marketing and CDOs
will rise to work closely and in synergy with
chief marketing officersto become chief
influencers and decision-makers. In fact, leading
companies have also started investing in creating
a marketing technology team that spearheads
the brands marketing strategy.
INDIAN MANAGEMENT APRIL 2017 65
A qualitative study involving millennials reveals they have nuanced preferences
when it comes to work and career.
DR DEBASHISH SENGUPTA AND ALESSANDRO NICOTRA
Know your Ys
M
illennials, also known
as Generation Y, are
hard to ignore. By
2028, the last of the
baby boomers will
retire, and millennials
will make up
roughly 75% of the worlds workforce by 2025.
Particularly, India will have the largest number of
millennials anywhere in the world by 2021.
The fact that 65% of Indias population is
below 35 is enough to establish the significance
of the millennial generation, for companies. They
are not just present in large numbers, but are
also there where it counts the mostimpacting
both the workplace (as employees) and the
marketplace (as customers). Are organisations
ready for the burgeoning number of millennials
in the market? Have managers been able to
understand their different behaviours and
mindsets? Do they have strategies to engage
them? Facts suggest the contrarymost
companies are struggling to keep their millennial
workers happy and engaged. According to the
2016 millennial survey by Deloitte in India,
almost 66% of millennial workers in the country
are likely to change their companies by 2020
STRATEGY
i.e., two out of every third. Similar trends are
visible the world over, but India ranks third in
terms of the probability of Gen Y workers leaving
their present companies. This points to the fact
that lack of loyalty may be a sign of neglect
millennials might be facing in their organisations.
Poor levels of engagement of millennial
workers are a red flag for companies across their
world. It will not only have cost implications
but also negative implications with respect to
growth, profitability, and sustainability, especially
when the going is not particularly easy for most
of the industry sectors. Companies need to
rethink their strategy when it comes to hiring
and engaging millennials. Old designs seem to be
hardly working.
Various research studies have been conducted
to understand Gen Y, but despite the data
available there is much to learn about their long-
term objectives. They have an affinity towards
technology they largely contribute to its
development not only stimulating the market
with demand, but also actively walking the extra
mile to make significant contribution in terms of
R&D while working for companies. It is difficult
for Gen X or baby boomers to hire and engage
millennials because they mostly use the same
INDIAN MANAGEMENT APRIL 2017 67
 of India, remarked, ... no matter how rich their
job is; you do not give them the weekend off and
they might simply walk out.
Experience versus freshers: Experienced
millennials get slightly more preference than
freshers. As Nitin Nagaich, Managing Director,
Convatea global recruitment consultancy,

Shutterstock.com
puts it across, The right set of competencies
and a mindset of mastery is very important to
have good hires, and millennials, with even some
experience, turn out to be better recruits.
Cognitive versus affective empathy:
Siddharth feels the economic status of millen-
nials is a moderating variable in their behaviour.
Companies need to old parameters. Any short- Urban millennials have higher levels of cognitive
urgently revisit and sightedness in effectively hiring empathy while those coming from semi-urban/
and engaging them can affect a rural areas and lower middle-class backgrounds
transform their millennial business firm in the long term. display better affective empathy. When hiring
strategy, if they have one for customer service, the latter turn out to be
in the first place. Need for renewed outlook better hires.
Companies need to urgently
revisit and transform their millennial strategy, Generic competencies expected
if they have one in the first place. Futuristic from millennials
corporate leaders recognise this imperative Good listening and communication, alongwith
and share insights on how they, and in many interpretation and analytical skills, are the
cases, their companies make a concerted effort top expectations of companies while hiring.
to create an employer brand that attracts Companies also give weightage to Gen Ys
millennials better. learnings from their previous job. Millennials
As a part of our research, we conducted a are expected to exhibit empathy and loyalty.
poll among millennials to understand what they Siddharth echoes what most companies want to
look for in a workplace. We also interviewed ensure while hiring millennialshow long they
corporate leaders to understand their perception. are going to stay. We are not expecting them to
Our attempt was to look at both sides of the coin stay forever in our company. However, when I
in a bid to extract a broad guideline for hiring ask them how long do they plan to stay and they
and engaging millennials. say they do not know then that is a red flag for
me. Even if they plan to stay only for two years,
Corporate lenscompanies outlook but they say that assertively, I am fine.
towards millennials
ABOUT THE AUTHOR Corporate leaders on hiring: Perception about millennials
Alessandro Good job design: Hire only those enthused by While the exuberance, energy, and at the
Nicotra is Masters the job and are aligned to the organisations goals. same time cynicism of millennials continue to
of International
Business Scholar, Work-life balance: Millennials attach a lot of impress many, some still have their reservations.
University of significance to work-life balance. Siddharth S N, Nagaich finds a sort of casual attitude among
Bicocca, Italy.
Head - Business HR in a retail group based out millennials. He often finds them availing

68 INDIAN MANAGEMENT APRIL 2017


If companies want to themselves of more leaves,
attract millennials, then not working on feedback, not
showing tremendous pace
they must take into of learning, and more than
consideration what they anything else, distracted. Social
really expect from the media usage at workplace
workplace. continues to bother many
managers and they find that
at times millennials find
it difficult to wean themselves away from
Facebook and WhatsApp and priortise their
work. Many managers share such perceptions
that often border on the periphery of myths,
which result from lack of good understanding
of this generation. A recent survey by American
Express and Millennial Branding found that
most managers think millennials have poor
work ethics, can be easily distracted, and
have unrealistic compensation expectations.
A different study by the Conference Board
of Canada found the majority of previous
generation members, i.e. Gen X and baby
boomers, think Gen Y are overconfident. To
what extent such perceptions are true or untrue
might be debatable, but definitely there seems
to be a lack of good understanding between
millennials and other generations at work.
Millennial lenswhat they expect from
employers
If companies want to attract millennials,
then they must take into consideration what
they really expect from the workplace. By
understanding their values and motivations,
organisations should redesign strategy to build
attractive workplaces that appeal to the young
ABOUT THE AUTHOR
workers.
Dr Debashish Survey results comprising millennials of both
Sengupta is
professor of genders, of different nationalities, and ones with
HR & Strategy and without job experience offer interesting
and Program
Director, Alliance
insights into millennial expectations.
Ascent College,
Alliance University What millennials expect from companies
Bangalore.
What would a millennial look for when
STRATEGY
choosing a company? What are the factors that
will impact their decision? When asked these
questions, many of them expressed a preference
for a friendly environmentthis comes from a
clear perception that working is often stressful
and a friendly working environment might help
them fulfil their job responsibilities.
Interviews distinctly showed how well aware
they are of the economic crisis; it was also
possible to extrapolate a particular focus on
salary, especially among those who had some
work experience. It is significant to know about
their focus on career opportunities combined
with a desire for a stimulating job; they clearly
expressed interest in redefining tasks so as not
to be bored.
When asked to rank the factors in order of
preference in terms of what they expect from
their employers, slight difference was observed
between those with and without job experience.
Those passing out of college (with hardly any
job experience) ranked opportunities for
growth, flexible work environment, and
openness to ideas and diverse thoughts as the
top three factors they valued in an employer.
Surprisingly though, contrary to popular
perception, bringing ones own device at work
and usage of social media ranked last among the
fifteen factors.
A slightly different result is observed in case
of experienced millennials who have given
highest priority to quality of life, followed
by benefits, perks and compensation, and
empowerment and freedom for decision-
making.
As a tech-friendly generation, they eagerly
mine data through media and they are daily
exposed to loads of information, data, and trends.
Google still ranks number one among the dream
companies to work for amongst millennials, with
12.5% of our sample voting for the company. An
engaging environment and a passion led work
were cited as the reason for choosing Google
over other companies. This further underlines the
INDIAN MANAGEMENT APRIL 2017 69
 fact that despite the not so conducive economic
environment in which they live, they still look for
a job in which they can make use of what they are
passionate about and do something meaningful
that is not constraining.
Factor
Millennials fresh out of college
Ranking
1 Opportunities for growth
2 Flexible work environment

3 Openness to ideas and diverse thoughts

Key learnings in hiring and engaging
4 Meaningful job
Based on our study, we suggest the following list
of dos and donts: 5 Empowered workplace
Competency-based hiring 6 Rewards and recognition
Subhra Banerjee, Bengaluru Head of Sales, Aahaa
Stores Private Limited, says, Millennials come 7 Good quality of life
dear and any mistake in hiring is an undesirable 8 Exciting career opportunities
cost to the company. We rely on competency-
Attractive compensation, benefits, and
based hiring when it comes to hiring the sales 9
perks
force. The Chennai-based company, which is
10 Continuous real-time feedback
a one-stop solution for office supplies servicing
corporate clients and raised $1 million funding 11 Value for individual goals and aspirations
recently, distinguishes its sales force into two 12 Socially responsible company
distinct typeshunters and farmers. Hunters are
those who acquire new clients and hence, when 13 Fun place to work, casual environment
hiring them, emphasis is laid on aptitude for sales, 14 Collaboration opportunities
communication, negotiation, and persuasion
BYOD and use of social media at
skills. Besides, it is important for them to have a 15
workplace
hunger for sales. Once the client is acquired, they
are handed over to the farmer who has to build Factor
Millennials with work experience
relations with the client, fulfil all their needs, Ranking

attend to escalations, and increase volume of 1 Quality of life

business through client satisfaction. While hiring Attractive compensation, benefits, and
2
farmers, emphasis is laid on the ability of the perks
candidate to build and maintain relationships and Openness to ideas and flexible work
3
their level of empathy. environment
4 Career opportunities and collaboration
Cold calling and pre-qualifying
5 Opportunities for growth
millennials
Banerjee goes on to add that once the resumes 6 Socially responsible company
are forwarded by HR, he usually does cold 7 Value for individual goals and aspirations
calling. He says, That saves the company both
time and money. Millennials are found to be 8 Meaningful job
more open-minded and if they love their job, 9 Continuous real-time feedback
they are ready to give more than a 100% to the
10 Rewards and recognition
same. Cold calling helps in three waysit helps
me understand whether they understand the Fun place to work and casual
11
environment
job content well and whether it excites them,

70 INDIAN MANAGEMENT APRIL 2017


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whether as a company we will be able to meet
their expectations, and whether they have a
career objective. Usually, the ones who have a
clear path envisioned for themselves stay longer
and perform better.
Offering jobs with poor designs
Millennials want to do meaningful jobs and
make an impact. They expect their jobs to have
challenges and give them an opportunity to
showcase their skills. In short, the job needs to
have enough meat, both in terms of quantum
and variety of tasks. Companies that do not work
enough on the job description and crafting of the
job make a mistake.
Unclear expectations
Millennials do not like ambiguity and expect
a clear set of expectations that the company
has from them. They are frustrated when
certain expectations are made evident to them
post hiring. They perceive such cases to be
unprofessional and exploitative. Hence, it is
important to clarify what is expected out of a
particular role right at the time of selection. For
millennials, the utility of departure is greater
than the utility of dependenceif they feel the
STRATEGY
contract with the employer has been breached,
they would like to leave rather than negotiate.
Interview based on previous job
experience
Millennials are not afraid of switching careers.
Interviewing them is more an opportunity
to measure their potential or what they can
do and less of taking a stock of their previous
performance. In other words, just because a
millennial has been in a poor job earlier does not
mean that he or she is not worthy enough.
Undue weightage to educational
background
One of Britains biggest graduate recruiters EY,
the global accountancy firm, recently announced
that it was scrapping the requirement for
applicants to have a minimum 2:1 degree pass or
UCAS point score of 300 (equivalent of three B
grades at A-level). The company said it had made
the decision to change the application rules for
its graduate, undergraduate, and school-leaver
programmes after an independent study rated
its in-house assessment and numeracy tests as
a robust and reliable indicator of a candidates
potential to succeed. This is part of the
companys effort to attract millennial talent, and
open up opportunities for talented individuals
regardless of their background and provide
greater access to the profession.
Educational qualifications, although important,
need to be discounted a bit with respect to
millennials. The increasing employability gap
along with companies need for talent makes
it imperative for them to be flexible in terms
of educational background. Having validated
selection tools that help in identifying real talent
is more important.
Not asking them about their passion/
ideas
Millennials have been brought up in a manner
that they have a belief that their ideas have the
INDIAN MANAGEMENT APRIL 2017 71

Shutterstock.com
power to change the world. They are eager
to share their ideas and work on what they
feel passionately about. They like to associate
themselves with companies that give
them an opportunity to contribute their ideas.
Use of innovative selection tools
Research clearly indicates Gen Y uses
technology collaboration tools such as mobile
phones, Bluetooth, laptops, Windows CE
handhelds, electronic mails, and text messages
to solve problems and shorten their learning
curve. In fact, they are the first generation
whose internet consumption exceeds television
consumption.
At LOreal India, the cosmetics and beauty
products company, graduates and post-graduates
being considered for a job have to play a game
revealit simulates the work environment
and players move through various challenges
across departmentsfinance, sales, marketing,
operations, and research and innovation.
72 INDIAN MANAGEMENT APRIL 2017
Another interesting research on Gen Y
showed that their learning is positively impacted
by incorporation of visual elements, and
hence graphic novels provide a more attractive
medium of learning to communicate business
concepts than traditional textbooks. The reveal
game that candidates get to play at LOreal
India seems to be built on the same principle.
Candidates pick an avatar and interact with
graphical characters in different departments.
They start with product development, and
then navigate their way through three rooms
and answer over 500 questions. Meanwhile, a
computer programme keeps a tab on the time
spent to complete each task and assesses logical
reasoning and analytical skills.
Poor selection process experience
Many times, the selection process becomes
a poor experience for candidates because of
inadequate planning by recruiters. Long hours
of waiting for their turn for the interview, no
arrangement for refreshments, and no proper
information on the next step in the hiring process
are just some of them. Poor experience results
in poor word of mouth for the company which,
in case of millennials, gets immediately shared
through social media. Companies cannot afford
such bad publicity, as it seriously dents their
brand as employers.
Failing to tell them about exciting
prospects
Selection process is an excellent opportunity to
showcase a companys future plans and the role
they would play should they become a part of
the company. Millennials are career focused and
wish to know whether they have a good future in
the company. Siddharth says that their company
has a sponsored career mobility programme
targeted at millennials, under which 5% of the
top performers get career passports. This entails
them to a guaranteed vertical mobility every
year and monetary incentives. Such efforts have

New recruits should be brought down the attrition rate
given an opportunity in the company from 10% a
month to about 4% a month,
to interact with senior and retention of high potentials
leaders and made to has gone up to 97%.
feel welcome.
Untrained interviewers
Interviewers who are
pushy, ask personal questions, and behave
unprofessionally are immediate put-offs for
millennials. They perceive such experiences
to be representative of the poor company
culture and it discourages them from joining
the company. It is important to impart some
basic training to interviewers, especially on
interviewing ethics and etiquette.
Display rigidity and lack of flexibility
Millennials love flexibility in terms of work
arrangements like making use of social media
at workplace, and want their offices to be a fun
place to work.
Making millennial candidates fill lengthy
forms that often make them provide
unnecessary and repetitive information about
themselves and putting them through too many
formalities during the selection process or later
are turn-offs. They prefer lesser process-centric
and lesser formal organisations. On-boarding,
rather than being a boring lecture-filled event,
needs to be a fun event. New recruits should
be given an opportunity to interact with senior
leaders and made to feel welcome.
Right feedback
Millennials expect continuous real-time
feedback. Nagaich adds, The feedback needs
to be not only instant but also to be given in
the right manner. It should not only state the
problem but the manager must be able to
lead the employee towards solution. Hand-
holding during difficult times is important.
It creates longer engagement and inspires
millennial workers.
STRATEGY
Recognition at different levels
Applause, appreciation, and awardsall forms
of recognition tools need to be used at different
times and levels to ensure that good work and
contribution of millennials workers do not
go unrecognised. Motivation works big time
for such workers who have been brought up
by parents who have told them that they are
capable of achieving anything and have studied
in schools where everyone got a participation
certificate irrespective of who won or who lost.
Forgetting to focus on their life
Millennials value work-life balance and do
not wish to trade off their lives for work.
Companies that forget to focus on the life of
millennials, do not offer them opportunities to
socialise, and do not celebrate small occasions
often find millennials more as passengers rather
than residents.
References
BPW. (2011, April). GEN Y women in the workplace. Retrieved
02 27, 2014, from http://bpwfoundation.org/documents/
uploads/YC_SummaryReport_Final.pdf
ASTD. (2013, March 12). Six Ways Generation Y Will Transform
the Workplace. Retrieved 02 27, 2014, from http://www.
astd.org/Publications/Blogs/ASTD-Blog/2013/03/Six-Ways-
Generation-Y-Will-Transform-the-Workplace
Giang, V. (2013, 09 04). Why Gen Y Workers Have No Idea
What Their Managers Expect From Them. Retrieved from
Business Insider: http://www.businessinsider.in/Why-Gen-Y-
Workers-Have-No-Idea-What-Their-Managers-Expect-From-
Them/articleshow/22268720.cms
The Conference Board of Canada. (2014, 06 25). Workplace
Preferences of Millennials and Gen X: Attracting and Retaining
the 2020 Workforce. Retrieved from The Conference Board of
Canada: http://www.conferenceboard.ca/e-library/abstract.
aspx?did=6270
Barnikel, M. (2005, May 20). Generation Y Media habits show
tide is turning in favour of internet. Media, p. 12.
Short, J. C., & Reeves, T. C. (2009). The Graphic Novel: A
Cool Format for communicating to Generation Y. Business
Communications Qauterly, 72(4), 414-430
|, S. P. (2012, October 17). Companies use online games as
hiring tool. Retrieved from TOI: http://timesofindia.indiatimes.
com/business/india-business/Companies-use-online-games-
as-hiring-tool/articleshow/16844791.cms
Gartner, R. ( 2015, August 3 ). EY: Firm says it will no
longer consider degrees or A-level results when assessing
employees. Retrieved from Independent: http://www.
independent.co.uk/news/education/education-news/ey-firm-
says-it-will-not-longer-consider-degrees-or-a-level-results-
when-assessing-employees-10436355.html
1 (ASTD, 2013).
INDIAN MANAGEMENT APRIL 2017 73
74 INDIAN MANAGEMENT APRIL 2017
HR managers should be able to articulate the business value of their programmes.
RAMESH SOUNDARARAJAN, CULSTRAN CONSULTING LLP, AND
DR KULDEEP SINGH, CAPGEMINI
Say it with numbers
M
ullah Nasruddin
was searching for
something under
a lamp. Even after
searching diligently,
he could not find
what he was looking
for. A crowd gathered and in due course,
someone asked him what he was looking for.
Mullah replied, I am looking for the key to
my house.
If you tell us where exactly you lost it, we
can also join the search.
Actually, I lost it around 100 yards from
here, he said.
So, why are you searching for it here?
Because there is light only here, that place is
dark!
Many of us have heard this story that can be
used in many contexts. But why is it relevant
here?
As a function, HR has evolved with a
multiplicity of practices and processes. In the
90s, a company would have had a recruiting
function, an employee relations/industrial
relations function, a training function as well as
a compensation role. With time, the following
functions were added:
Business partner HR
Employee engagement
Organisation development/effectiveness
HR strategy
HR
In addition, training morphed into learning,
and development and compensation became
rewards. As a result, the following tools became
widely accepted:
Competency frameworks
Assessment/development centres
Normalisation (and check-in feedback)
Aptitude tests
Employee surveys
In parallel, companies also reinvented
themselvesfirst in the internet era and now in
the digital. They outsourced and used best shore
strategies for getting work done. HR has done
a great job of keeping up with the operational
and compliance part. It has even developed an
expertise in managing cyclical processes. As
Steve Jobs said, It doesnt make sense to hire
smart people and then tell them what to do;
we hire smart people so they can tell us what
to do.
Various surveys have highlighted that
leadership development, retention of key talent,
and changing/preserving organisation culture
are some of the top priorities of todays CEOs.
At the same time, CFOs want RoI. Companies
are willing to make any investment in people, as
long as a RoI is visible.
This is where the HR function could be like
the Mullah Nasruddin incident. HR measures
such as training days per person, voluntary
attrition percentage, percentile compensation,
and recruitment cycle time, are useful. But
INDIAN MANAGEMENT APRIL 2017 75
 relying solely on them to identify strategic impact is a bit like searching for the key under the light!
Consider this illustration.

Case study 1
Let us explore with the help of a hypothetical case. If an IT company decides to spend R10,000 per
employee per annum on various HR programmes, total expenditure for differently sized companies
will be as shown in the table below.
Revenue Total HR HR programme
Company Headcount (approx.) programme spend as % of
INR spend revenue
A 10,000 250 crores 10 crores 0.40
B 20,000 5000 crores 20 crores 0.40
C 50,000 12,500 crores 50 crores 0.40

Let us look at investments in HR programmes from the managements lens with a focus on net
profits/EBITDA:
HR HR
Revenue Total
Net profit/ EBITDA programme programme
Company Headcount (approx.) HR programme
@ 20% of revenue spend as % spend as %
INR spend
of revenue of EBITDA
A 10,000 2500 crores 500 crores 10 crores 0.40 2.00
B 20,000 5000 crores 1000 crores 20 crores 0.40 2.00
C 50,000 12,500 crores 2500 crores 50 crores 0.40 2.00

Let us assume that the CEO and CFO of Company A takes the decision of not investing on training
worth R10 crore for this year to increase EPS, which in turn will increase stock prices and attract
investors for future expansion plans. Company A is listed on BSE and NSE and has an outstanding
share capital of R200 crore with R10 face value share and total outstanding shares as R20 crore.
Assuming that current market price of share is R250 and with R500 crore EBITDA, the earning per
share will be R25, giving a price to earnings (P/E) multiple of 10 (250/25). Assuming the CEO and
CFO do away with HR training spend of R10 crore per annum, new EBITDA will be R510 crore and
new EPS will be R25.50. Assuming PE remains 10, the new stock price will be R255, representing an
increase of 2%.
Continuing with Company A, typical total employee cost will be 60% revenue, or R1500 crore.
Assuming that the management decides to reduce overall HR budget/employee cost by 5%, this
reduction of 5% in R1500 crore will make EBITDA R575 crore; and assuming training spend of R10
crore continues, new EPS with 5% overall reduction will be R28.75 and assuming PE of 10, new
stock price will be R287.5, an increase of 15% over R250.
ABOUT THE AUTHOR In such a situation, the HR head can retain the investment on training if he/she can prove that
Ramesh
training investment has an impact on business outcomes (increased sales or profits). So how does the
Soundararajan is HR head justify the programme? This is where it becomes important to use a structured framework
Partner, Culstran like the LAMP model for HR analytics.
Consulting LLP.
So, when the CEO asks for business impact on training, neither the budget nor effort is a suitable

76 INDIAN MANAGEMENT APRIL 2017

 HR

Lighting the LAMP

The Right Analytics training of people, and show how reduction in

Valid Questions and Results such investments becomes agnostic to market
(Information, Design, Statistics) price of the share for a listed company.

Case study 2
The Right Logic Let us take another illustration to explain the
The Right
Rational Talent HR Metrics and difference between cost levers and engaged
Measures
Strategy Analytics That Are
(Competitive A Force For
Sufficient Data and developed people, as a tool for impacting
(Timely, Reliable, business outcomes. Take two companies A and B
Advantage, Strategic Change
Available)
Talent Pivot Points) with data points mentioned below:

Employee
Cost per Revenue per
The Right Process Company Engage-
hire employee
Effective Knowledge ment Score
Management A 37 50,000 11,00,000
(Values, Culture, Influence)
B 31 34,000 9,50,000

response. The right response is: what is
the business lever we are impacting? Is it
profitability/growth/market share?
Right measures
Outcome before the programme
Coverage of the programme
Outcome after the programme
Adjustments to eliminate the impact of other
drivers
Business value derived from the programme
Measured investment into the programme
Measured return from the programme
ROI, positive or not
If the measures support the investment, then
it gets converted into a process and is executed
systematically.
Let us go back to the hypothetical case. Let
us assume Company A grows by 20% and new
revenue is R3000 crore and increases wages by
5% and continues with R10 crore HR training
investments, EBITDA at 20% will be R600
ABOUT THE AUTHOR crore, and EPS will be 30 and with PE of 10,
Dr Kuldeep
new stock price will be R300, an increase of
Singh is Director, 20% of over R250.
HR, Capgemini, So in the second case, HR needs to correlate
Bengaluru.
increased revenue to increased investments in
Company A has a high engagement score and
higher revenue per employee but higher cost
per hire. Company B has lower engagement
score and low revenue per employee and hence,
cost per hire is also lower. Here, company Bs
HR is highly efficient by keeping hiring costs
low while company A has higher hiring cost.
Comparison shows HR is saving money and
adding to profits in Company B while people/
talent are driving higher revenue per employee
in Company A through highly engaged and
developed employees. In both situations, value
gets created though through different methods
but higher revenue per employee has more
competitive advantage than the cost reduction
approach. If a company can do both, then there
will be a multiplier impact on outcomes.
Analytics is not just descriptive, but can also
be used to predict and prescribe. Tools and
technology support the evolved version of
analytics in HR as well, like predicting attrition.
However, it is possible to generate huge
leverage by focusing on descriptive analytics, by
asking the right questions, collecting the right
data, and providing accurate responses.
(The article is based on the book, Winning on HR Analytics.)

INDIAN MANAGEMENT APRIL 2017 77

Employee engagement is now about holistic well-being at work.
SWETA MISHRA, INDUS VALLEY PARTNERS
Nurturing connect
I
ncreased global competition, linkage
between attitude/behaviour and
business performance (supported by
a huge amount of research), and shift
from a manufacturing-led economy to
a service-led one have cumulatively,
over a period of time, given employee
engagement a significant place among HR
domains. For years, employee engagement as a
concept has had its fair share of experimentation
and evolution. If you look at the overall HR
space in the last ten years, engagement and
performance management have been like two
parallel lines, progressing together, impacting
each other in terms of foundational principles,
and achieving paradigm shifts simultaneously.
It is therefore imperative that organisational
heads and HR professionals press the pause
button once in a while to review their stand on
employee engagement.
The next logical question here is: what are
some of the radical practices in the employee
engagement space today? There are three
predominant trends:
EMPLOYEE
ENGAGEMENT
Realignment of leadership principles and
styles to cater to the emerging needs of todays
workforce
A new breed of tools/apps for pulse checks,
continuous feedback, and frequent check-ins
Strategic focus on short-term and long-term
factors impacting employee experience
career paths, employee-friendly workspace,
and experience-centred rewards
Let us take a deep dive into each of these
three trends and pragmatically look at the
outcomes that organisations are striving
towards.
Being a people leader today is a matter of
not just intelligence and intellect, but also
emotional quotient. Multiple generations at
the workplace, unique challenges millennials
throw, demands of a super-competitive business
environment, and individual career ambitions
together form an extremely challenging path.
But the change the performance management
space has undergone in the last couple of
years is best represented by the single most
important tool/technique people managers are
INDIAN MANAGEMENT APRIL 2017 79
 Shutterstock.com
expected to masterconversations. Frequent
check-ins, ongoing feedback, and meaningful
and exploratory career conversations now
characterise the manager-team member
relationship. The manager has transitioned
from an administrator who used to assess
and correct to someone who walks the road
with the team, is there to
support, and engages with
Being committed to them on a daily basis. It has
individual wellbeing and become imperative for each
being sensitive to multiple manager to ensure a certain
amount of hygiene around
individual motivators workplace happiness. This
need an innate focus. reflects strongly in leadership
trainings, performance
management processes as well
as organisational communication.
The key questions then are: how difficult or
easy is this transition? How big a challenge is it
for them to live up to the expectations of being
an engaging leader? Does every leader have the
80 INDIAN MANAGEMENT APRIL 2017
innate ability to connect? Does every stellar
performer who has risen up the ranks with his/
her domain expertise have the ability to cater to
multiple individual motivators?, and how many
Gen X individuals in leadership roles (who
have experienced stringently managed work
environments in the past) can sustain the need
to provide a flexible work place that promotes
emotional well-being?
Give this some thought and you will
understand this is not a competence-related
challenge, but a character-related one. Being
committed to individual well-being and being
sensitive to multiple individual motivators
need an innate focus which may not always
be a workable area of development for
everyone. There, precisely, lies the challenge of
accomplishing employee engagement goals.
The second trend in employee engagement
is technology relateda new genre of tools
and apps that leverage mobile functionality
and social media integration provide for

Engagement is no simply staying in touch. The
longer just a workplace simple objective targeted
through these tools is constant
approach; it is an ever connectenable employees
evolving, living element. to engage with company
communication, celebrate
success, share feedback that shapes decisions,
and most significantly, to generate a feeling of
being listened to.
What is exciting to note is the way in
which employee engagement, as a domain,
brings together technology as well as some
core human elements like conversations and
connect. In an era of technological revolutions,
engagement principles are consistently focused
on establishing a humane, connected, and
flexible environment to accommodate the needs
of a multigenerational workforce. Interestingly
enough, technology has been blamed in the
past for taking away from human connect. The
contemporary employee engagement scenario,
therefore, is definitely a unique oneusing
virtual connect to cater to the technology
appetite of employees, yet providing a platform
that enables continuous interaction.
The third shift is simply how engagement is
looked at. While, for years, it was restricted
to fun events and activities at work, in the last
few years it has evolved into something much
broader in scopean aspect that cuts across
various HR and business domains and impacts
every aspect of life at work, starting from
onboarding to performance management to
exits. Contemporary engagement strategies
include experience-based rewards, authentic
career conversations, exploratory exit connects,
and end-to-end plans that touch every crucial
point of the employee lifecycle. It seems as if
engagement is a constant objective across the
implementation of all people-related processes.
ABOUT THE AUTHOR And if there is one element that is emphasised
Sweta Mishra is throughout, it is the human element.
Director - HR, Indus Review the essence and objective of the
Valley Partners.
preceding paragraphs and you would see that it
EMPLOYEE
ENGAGEMENT
points towards only one thingmanaging the
affective state that people experience at work.
To connect, listen, implement feedback, and
enhance employee experience in a continuous
journey to promote wellbeingthis outlines
the engagement vision for any HR leader.
One of the biggest outcomes of this
paradigm shift in the perspective on employee
engagement is seen in how organisations
view their own performance and success. It
is no longer restricted to the balance sheet;
it is much more holistic than that and covers
contribution to society, brand value, and other
long-term non-financial outcomes. It seems
as if HR as a function has brought its attention
back to focus on a foundational principlethe
way a workforce feels about its workplace will
definitely affect the organisations balance sheet.
And look at the impact of this shift.
Engagement is no longer just a workplace
approach; it is an ever-evolving, living
element, the reach of which is not restricted to
infrastructure, environment, and activities, but
one that extends to the psyche of employees.
A critical question at this juncture is: what
will drive success with regard to engagement
strategies in the future? When you have an
unending to-do list to accomplish every day,
it is easy to lose sight of that shared purpose;
the shared purpose of being connected and
engaged. It is easy to think of employee
engagement, but much harder to put in place a
sustainable engagement strategy. A simple, yet
complex question needs to be answeredwhat
can an organisation do to consistently listen
to employees, implement what is pragmatic,
and close the feedback loop authentically? The
herculean task of driving cultural changes and
necessity of trust in an organisations fabric
are critical things that will determine success.
An easy prediction can be made though
organisations that can incorporate this evolving
engagement psyche into their daily way of
functioning will certainly be future ready.
INDIAN MANAGEMENT APRIL 2017 81
82 INDIAN MANAGEMENT APRIL 2017
Companies should stop measuring just productivity; happiness quotient is a better
indicator of organisationsal health.
ASIF UPADHYE, NEVER GROW UP HR

Pursuit of
happiness
A
ll organisations seem to be overly busy
engaging their employees, but are they
often overlooking what employees
truly want? Having apparently cracked
the code with respect to employee
engagement, happiness quotient
seems to be the next big thing that has
taken the fancy of the corporate world.
As humans, we are prone to noticing patterns in
seemingly unrelated, haphazard sequences. It is probably
because of this attribute ingrained in us that we are always
on the lookout for trendsa meaning and method in all
the chaos. After a considerably long preoccupation with
the importance and need to measure IQ and EQ, the
trend today is to understand and measure HQhappiness
quotientat work.

What is happiness quotient?

The happiness quotient of an employee is a comprehensive
measure of the various factors that drive an individual at a
personal and professional level and hence is also a measure
of the happiness and satisfaction he or she experiences
at work.
If the concept of HQ evokes a sense of uncertainty, it
is because there is hardly any construct in the world that
has been perceived more subjectively than happiness.

INDIAN MANAGEMENT APRIL 2017 83

 Debates have raged across history and continue
to do so over its definition, parameters, and
most importantly, the factors that influence it.
The fact that it ranges, often drastically, from
one individual to another is what has universally
established happiness as an elusive construct.
What follows from that conclusion is that such a
construct cannot possibly be quantified.
Hence, conversations around a term such as
happiness at work are more often than not
taken on a lighter note than say, a quantifiable
term such as profit margin or productivity level.
One often finds workplace happiness a factor to
be relegated to the position of a personal choice
or a state of mind.
As far as I understand, however, this reasoning
has certain flaws.
The subjectivity of happiness cannot be
disputed. But the fact that it varies from one
person to another should not stand in the way
of understanding it; if anything, the variety of
individual ways in which people experience
it offers a smorgasbord of data on which
conclusions can effectively be drawn.
From this data, the construct of HQ can be
better understood by analysing the common
factors that stand out and influence it. There are
certain universal work factors that govern the
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84 INDIAN MANAGEMENT APRIL 2017
degree of satisfaction that employees feel towards
their jobs and organisations.
Factors that affect HQ
To start with the basics, an essential factor that
drives professional satisfaction across varying
demographics is that of a suitable work culture and
environment.The tangible and intangible factors
woven into the fabric of an organisation have a
direct impact on the performance of an individual.
Moreover, keeping in mind that most employees
spend the better part of their day at work, the
elements that make up their office environment
play a huge role in influencing their state of mind.
Work culture and environment also impact
another significant element of workplace
happinessinterpersonal relationships. Culture
can act as both a positive as well as a negative
influence on the way employees communicate,
interact, and collaborate with each other. The
relationships we form with our peers/colleagues
and the rapport we share with them help foster
a sense of support and collaboration; this has
been proven to positively impact productivity
levels. This leads to a beneficial or a deleterious
situationwork relationships influencing the
work environment and vice versa.
Workplace happiness levels are also dependent
on how employee values and personal priorities
in life align with those of the company. Having
already acknowledged the subjectivity of the
happiness factor, we know that no two people
are driven by the same factors in life, and hence
it follows that no two people seek the same
things from their respective organisations either.
It becomes important, therefore, to identify the
motivations that drive an employee forward and
whether their role in the company aids them in
fulfilling those. Moreover, those who have a clear
idea of their place in the larger framework of the
organisation are more likely to identify with their
work responsibilities than the ones who do not.
This sense of accountability and satisfaction lie at
the centre of understanding HQ levels.

shutterstock.com
This begs the next question: even as we
have figured out the factors that drive the
happiness quotient, how close are organisations
to truly achieving it? Well, if the commonly
employed annual surveys are anything to go by,
organisations might be way far off the mark in
this regard.
Surveys that measure happiness
To begin with, many company surveys disregard
the ever-evolving nature of the professional
landscape and lack regularity. This brings about
an irregularity in the feedback, that too in an
era where employees are thriving in a fast-paced
world of instant online feedback. It is thereby
essential to know the pulse of a happy workforce
to continue with the initiatives that are working,
or with that of an unhappy workforce to realise
the need to bring about a change.
Another factor organisational surveys miss
out on is user-friendliness. With the advent
of technology has come convenience at work.
Organisations now have at their service efficient
ABOUT THE AUTHOR digital survey platforms that employees can
Asif Upadhye is
access at their own leisure. Not to mention
Director and Chief the fact that engagement surveys going digital
Fun Officer, Never serves as a big boon by easing the ordeal of
Grow Up.
data analysis.
HR
If workplace happiness can indeed be
broken down into factors, quantified and
measured, there is a whole plethora of data that
organisations have not tapped, but carry immense
potential to arrive at real-time solutions. When
this potential meets digitalisation, employers
can have at their service all the aforementioned
data that pertains to a specific department or age
group, helping them understand and focus on
the needs and concerns of any group better. The
hallmark of a successful organisation, after all, is
not just knowing, but knowing specifically what
its employees want and need.
Lastly, but most importantly, the entire concept
of engagement surveys as it stands today needs
reconsideration, essentially because employee
happiness levels have never truly featured in
either their intention or framework. Questions
asked by organisations have not centred more on
Is this working out?, rather than What makes
you as an employee happy?
But, is not the pursuit of happiness, in whatever
we do, our biggest motivation? Also, do we not
want to have a part to play in how we seek
that happiness?
Hence, while company surveys feature as a
mandatory part of every organisational policy,
there is general consensus on the fact these
mandatory surveys are often viewed not as the
helpful, engagement-oriented initiative they
seek to be but as boring, tedious tasks that serve
no real purpose. This is because in all honesty,
it is not possible to get your workforce either
motivated or invested in a survey that, in their
opinion, serves no true purpose or benefits them
in any way. These surveys need to transform
themselves from appearing as yet another tool
for organisations to drive productivity to a
sincere means for them to gauge their employees
happiness. Surveys focused on measuring HQ
reflect that the company is willing to lend an
honest ear to employees while offering them an
inclusive and rewarding opportunity to voice
their concerns and make a difference.
INDIAN MANAGEMENT APRIL 2017 85
86 INDIAN MANAGEMENT APRIL 2017
Fixed pay structure will no longer help PSBs retain talent.
MOHINI VARSHNEYA AND KIRAN SANDHU, CORPORATE
PROFESSIONALS.
A fair share
T
he idea of considering
ESOPs in public sector
banks has been talked
about for more than five
years. In August 2015, the
government announced the
introduction of ESOPs for
employees of PSU banks. After a prolonged
hassle of almost two years, the Finance Ministry
has finally given its consent to implement
the idea.
ESOP is an employee compensation strategy
wherein eligible employees are awarded
equity shares at a pre-determined rate, which
is generally lesser than the market value of
such shares. Companies are keen to adopt
this strategy compared to vanilla increments.
While cash has always been a short-term
motivator, ESOPs are a dual benefit strategy
for both employees as well as the management.
Equity-based incentive plans create a sense of
belongingness among them as they get directly
linked to the growth of the organisation. It
BANKING
makes them think as an intrapreneur and
motivates them to work effectively and
efficientlyto enhance the profitability of the
business. As a result, employees get aligned
with the company as they too have a stake in
its growth.
ESOP is not an alien term anymore. In
fact, it has gained significant recognition and
acceptance worldwide. In India too, it has
evolved as an effective tool that corporates
are adopting to reward, retain, and motivate
their star performers. The concept was first
introduced and adopted by the IT industry
in the early 90s. It has now made its way to
diversified industrieslogistics, media and
entertainment, manufacturing, hospitality,
and so on.
An interesting fact to be noted is that after
the IT Industry, it is BFSI sectorinsurance
companies, NBFCs, companies engaged in
microfinance business, etc.which is heading
fast towards adopting ESOPs. Renowned
private banks too have had ESOPs in place for
INDIAN MANAGEMENT APRIL 2017 87
 Shutterstock.com
Including ESOPs as part a long time; these include assets of the banks. In such a scenario, there
HDFC Bank, ICICI Bank, is a need to maintain balance between the
of performance-related
Axis Bank, and IndusInd Bank. governments directions and motivational factor
pay will serve a dual Herein, the employees are for employees. If we compare the pay scales of
purposereduction frequently awarded equity the top management in the public and private
in cash payouts, and shares as ESOPs depending on sectors, then we would find a difference of
enhancement of their performance. about three to four times. In addition to this,
The Finance Ministry if the present employee benefits are curtailed
employee satisfaction. has chalked out the idea too, it will prove to be a major setback for,
of ESOPs in public sector ultimately lowering the banks productivity.
banks on the same grounds. If we see the Hence, there should be a reward judgement
present compensation structure of PSU banks, on the basis of performance. Those who make
it includes a fixed pay scale and different outstanding contribution should feel motivated.
allowances. This is in contrast with their Including ESOPs as part of performance-
peers in private sector banks who consider related pay of PSB employees will serve a
the performance criteria while evaluating dual purposereduction in cash payouts, and
pay packages. In India, presently, private enhancement of employee satisfaction.
banks are offering ESOPs based on employee The Banks Board Bureau (BBB) has suggested
performance. However, this is not the case that the government consider ESOPs linked to
with PSBs. A reasonable component of their the banks profitability to better incentivise the
profits can be extended as an incentive to the employees, especially for the top management.
top executives. The BBB chief had said that though the Board
This seems fair and ideal compared to the fix is not able to do much with the fixed part
ABOUT THE AUTHOR
pay criteria. Recently, there has been talk about of the compensation package, the variable
Kiran Sandhu the government asking PSBs to curtail employee component can be improved by introducing
is Assistant
Manager- ESOP benefits, including industry-standard pay ESOPs, bonuses, and other performance-related
Services, Corporate hikes, if they want to receive any capital. This perks and benefits. Since the employees stand
Professionals.
relates to the management of non-performing to benefit from any appreciation in stock price,

88 INDIAN MANAGEMENT APRIL 2017


Bank employees unions ESOPs also help in aligning the
have opposed any move interests of the employees with
those of shareholders.
to introduce performance- This is undoubtedly a
linked incentives for welcome move to motivate
public sector banks and retain the human assets
as proposed by BBB. of banks, and make them
realise that they are not,
in any manner, lagging
behind in terms of what their counterparts
in private banks are getting. ESOPs will also
help in ensuring accountability and a sense of
responsibility and ownership.
Also, if we look at other public sector
enterprises, employee stock options have been
made a part of their performance-related pay.
The governing bodyDepartment of Public
Enterpriseshas clearly mentioned in its
guidelines that 10% to 25% of performance-
related pay should be in the form of ESOPs. This
concludes that ESOPs have already been given
the green signal in the public sector. So why
are PSU banks lagging behind in implementing
this? They are facing a talent crunch due to a
remarkable difference in compensation between
ABOUT THE AUTHOR
Mohini Varshneya
is AVP and
Head - ESOP
Services, Corporate
Professionals.
BANKING
the public sector and private sectors. Entry of
new playersmore universal and payments
bankshave also added to the problems of
brain drain and poaching. Public sector banks
are finding it difficult to retain their employees.
Therefore, it demands a review of the existing
structure and introduction of new methodologies
that can improve employee benefits.
ESOP has proved itself to be one of the best
suited mechanisms for retaining, rewarding,
motivating, and incentivising employees. It
is worth noting that the hierarchy and vast
coverage of banks makes this task seem difficult
in terms of implementation. However, bank
employees unions have opposed any move to
introduce performance-linked incentives for
public sector banks as proposed by BBB.
In this context, it is more important to
forecast its prospective benefits. The ministry
is anticipating an improved performance and
efficiency among PSB employees due to the
introduction of this concept. This will make
them feel more valued, and aligned to their
work and targets, and will lead to an increase in
the banks profitability.
Shutterstock.com
INDIAN MANAGEMENT APRIL 2017 89
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