Is it possible to change the culture of an organization?

800 371 Kamal Karanth

Is it possible to change the #culture of an organization? If so, Have you ever tried solving #MoneyCulture?

In one of my stints, most of my team always talked about “Money". It was either about they being underpaid or how others or competition getting more. There were frequent #salary corrections(if you demanded), incentive structures were continuously tweaked to catch up with the grouses, even if the organization was making losses people were paid bonuses (to overcome psychological hardships 🙂 Most conversations were about #promotions overseas postings or benefits.

When colleagues used to quit to join competition we used to sympathetically say, s/he had to resign, after all the money was so attractive, that was the only parameter people could relate to.
Once we were trailing our annual targets and people had to up the ante; Guess what, we said people who topped their KPIs were getting gift vouchers #iPad & holidays. This in spite of salaries and incentives to meet the same goals.

Did we try to change this culture, of course, we brought in new leaders, #HR Consultants did Culture-Workshops for us in fancy resorts. We trained our managers on engagement. We were able to change business results. But the money-culture stayed 🙂

I wish I could say #PeopleEffectChange

Reskilling Corporate India : Mission Impossible?

800 371 Kamal Karanth

Every-time we use the term ‘upgrade’ we only think of it for our phones. Having used it only for machines it’s difficult to comprehend this term on people. In this context, the scariest job right now is to be a manager in an IT company. Seems like only the specialist technology professionals have the insurance to survive in the Software world. The Gurus have been predicting millions of job losses due to automation. No wonder, Technology companies are talking about reskilling like never before.

It seems like, reskilling is an inevitable path to survival in most industries where technology is invading ferociously. I think reskilling as a term is being used very frequently as the silver bullet. But, is it such an easy exercise to carry out?  Reskilling is a huge mountain to climb in the Indian context as we have to fight multiple demons.

Historical Baggage

It’s important to appreciate the background of the current situation. We grew up in a hierarchical culture. The head of the family wielded power. The school had its headmaster too. We looked up to people who were managers at work. From public sector utility companies to banks where most of our known people worked, the word manager evoked respect. The advent of new generation employment in millions through IT companies did not change the picture.

Technology companies built even more managers than public-sector companies. Most of us go to work to earn the next promotion as a manager. Any promotion which only has a salary hike or a promotion without the manager title isn’t appreciated. When IT Companies hired in thousands the only way they could stack up the organisation pyramid was through managers. Even though they spoke and lived on technology interfaces the culture of the organisations fuelled managerial aspirations than continuous learning.

Societal Complexity

There are plenty of milestones we celebrate in our personal life. Getting graduated, finding a job, buying a bike/car, an EMI house, marriage, having children deserve mention amongst many more. Our life revolves around these along with our family and friends. Furthermore, our society checks on these aspects and our personal goals invariably get aligned to reach these destinations in time.  In the midst of these have you announce that you just got certified as cybersecurity professional? I doubt if there would be any celebrations on that. I know of friends who passed some tough and key certifications relevant to the IT Industry. But, we did not celebrate those moments.

The cultural setting in our organisation and the societal milestones are strongly ingrained in us. This is the biggest hurdle to build a mindset of continuous upgradation.

So, when IT Companies talk about reskilling they are up against their built-in DNA and the societal challenges together.

Reskilling or Re-schooling?

Imagine 40-year-old managers in IT Companies heading to classrooms or joining online courses to learn new technologies. With age learning abilities decrease, you are now fighting two battles. The first one is existential, it’s difficult to admit that the identity you carefully built so far is no longer relevant. Second, fighting the difficulty of learning something new which you know will be transient is a painful exercise. Building a new routine of learning after many years of work experience will be another challenge. This is the age where you want to assist your kids with their school work or head to the gym to keep in shape. The last thing you want is to be seen studying for survival.

When your Superstar Quits

800 371 Kamal Karanth
Why it’s difficult to keep our superstars in spite of the world being at their feet? The stock market did not like it when Apple’s Chief Design Officer quit recently. The long term impact of Jony Ive’s departure will be known only in a few years’ time. Star players joining competing is common in soccer, remember Neymar leaving Barcelona to join PSG? There is no denying that an immediate impact is felt every time a star performer leaves the team. Why do our star performers quit is never really understood? Their bosses put them on the pedestal, their peers are in awe of them, their team worships them, and their competitors fear them. In sports, politics, and at corporates, we have these uniquely talented people who seem to be blessed all the time. It would be difficult not to notice when you are working with a star, as they make things happen, there is always an aura about them. Still, they never seem to be happy with their continued success. They tend to move on from time to time, leaving behind their team and organisations shattered. When they are treated almost like a god, I wonder why they won’t continue to stay? Continuous Challenges

Most often you find these race horses or superstars to have the right combination of fire, energy, speed and many back it with an enviable work ethic. Their hunger for success is infectious. They set audacious goals and more often than not achieve them. Beyond a point even achieving these goals can bore them. So, it’s important to provide them with continuous challenges. The key is to stay current with what interests them. In the organisation context the challenges could be a new project, a turnaround situation, overseas assignment or even M & A. However, one thing that keeps them binding to the organisation is their emotional connect which can be achieved in different ways.

Inspirational Boss/Mentors For all the tenacity high performers demonstrate they too are human and can find themselves isolated. Their bosses leave them alone in the name giving them space, their peers may ignore them due to jealousy, their team could be in awe of them and could struggle to keep pace with them. Some of these superstars may not even know how to manage the adulation at work and may feel pressurized. It’s no secret that Superstars also look up to mentors. Steve Jobs described Jony Ive as his spiritual partner which probably kept Jony Ive going much longer even after Jobs left. Organisations need to provide the superstars’ mentors of their choice to ensure their emotional needs of the job is also met. Continuous Recognition Ensure there are constant recognitions even if you feel sometimes the superstars have underachieved by their own standards. The success spikes they produce overwhelmingly compensates for any blips they might have had in between. These special talents need to be treated with a positive bias even when they are underperforming. This favoritism is tough to pull off in an organisation context, but will definitely buy you high loyalty, discretionary efforts and top performances from this special talent. Another sure shot way of recognizing these superstars would be to consult them for any new initiatives the organisation might be embarking upon. Even though they might not have the capability to contribute its one sure shot way of keeping them engaged.

IT Hiring – Disruption of Organisation Pyramid ?

800 371 Kamal Karanth
IT Hiring is eternally changing and every year brings a new dimension for engineers to become specialists

Indian IT industry over the last two decades has seen a predictable organogram. For every 10 software engineers there is a Team Leader, Then add a manager to look after these team leaders. Additionally, a General Manager for many managers and a VP for a business unit. This model worked to create a 150 billion $ export market. Recent years may well begin a change to this traditional organisational pyramid

Indian IT Industry has been a job spinner for over two decades and currently employs 4.2 million people.  The growth has however moderated over the past couple of years to 7-8 % and in the face of huge headwinds.  The industry which has withstood many headwinds so far at the heart of self-disruption. The Industry which automated much of the paper-driven organisations is now coming to terms with automation on itself.

 IT Hiring- organisation pyramid change

It used to take about 45,000 people about a decade back to generate $1 billion in revenue for an IT services company. But, now it just takes less than a third of the headcount to achieve the same level.  IT companies used to hire hordes of freshers from Engineering campuses and kept their cost base low. They built the mid layer with Managers to manage the scale.  Now, Artificial Intelligence (AI) and Robotic Process Automation (RPA) is offering the alternative to those 2 layers. AI & RPA are likely to manage routine transactions, applications and IT infrastructure. This in its full form is leading to a redundancy of mid-level managers who were earlier required on account of scale.  The layoffs that happened in the past implies the point that mid-level managers are finding it hard to hang on their jobs.

In the last 3 quarters top 6 Indian IT companies who employ 1.2 million people have reduced their net headcount. This is probably a first in the longest time for the IT Industry.

However, the silver lining is that it is not all bad news.  Whilst the scale of job creation is certainly proving to be a challenge. Some of these trends that have emerged in the technology Industry present newer opportunities.

Emergence of DevOps

It is not a new technology but a coined term to describe the full gamut of skills required to comprehend the role. In the agile software development environment, the developer needs to don multiple hats.  Besides coding, he/she needs to able to appreciate the business logic and understand the clients’ domain. S/he also should be able to work with data in order to build scalable IT solutions.  The developer role is tending to be broad-based to cover the full software development lifecycle. Design, development, testing and deployment all in one. In other words, the traditional software developers’ roles are taking on a more 360-degree approach to app development

Analytics growth

Since ‘data is king’ in the new world, huge opportunities galore for people with skills in statistics and ability to frame mathematical models.  A Data Scientist is a better statistician than a software engineer. It is expected that by 2020 there would be a need of 200,000 data analytics professionals in India.  2018 would see the augmentation of analytics further, this would then help in offsetting the decline in other IT jobs

Corruption at our Work Place? Time to Speak Up!

800 371 Kamal Karanth
We are quick to point fingers at corruption in government circles but hush up similar practices in corporations

The doctor takes money to endorse, the purchase head expects something to release payments, the pharmacist wants something to stock. How can professionals in key positions earning healthy salaries indulge in such corruption?” I asked my mentor. My mentor was then the CEO of a large MNC biopharmaceutical company. I told him that I wanted to look for a job in a different industry

“If you want to make money through dubious means it doesn’t matter which role or industry you are in,” he replied. I did not believe what he said that day. But, many incidents in corporate life during the last two decades have corroborated his statement. The Punjab National Bank-­Nirav Modi case is just the latest.

Possibilities Everywhere

Organisations with large material or service procurement needs are generally vulnerable in this regard. In companies, individuals have the power to procure services or goods worth hundreds of millions of dollars. However large and reputable an organization, if it has weak control systems it tends to breed individuals who can misuse the trust placed in them. This can happen in any function and is not just limited to Administration and Procurement. It is also seen in HR, IT or Finance departments where the procurement is often direct. Even Sales, marketing, and CEOs can indulge in this if their own integrity isn’t of a high standard. People who work in large corporates do encounter incidents occasionally if not frequently.

Now, let’s not act holier than thou and say it only happens with politicians, bureaucrats, and government officials. Every marquee brand in the private sector too faces ugly episodes of individual or departmental corruptions.

Hushing it up

Just recently an MNC had to get the cops, an external lawyer, and its APAC team to the office to escort its CEO off the office premises. During his long leave, they made the discovery. A majority of sourcing at the firm came from a newly formed company co-­owned by the CEO. Unfortunately, fearing reputation loss and media publicity they did not press charges. They closed the case without taking it to the logical ending. Almost all organizations take prompt action and fire the individuals when they get to know about it. But the key step they fail at is making the event public or ling a case to prevent further occurrences.

Bell Curve – Are the Managers missing Them?

800 371 Kamal Karanth
Bell curve is a widely used tool for the longest to reward employees during appraisals. This is a reflection on how some of the early adopters are coping without it.

A few years ago some of the large consulting and technology organisations announced the discontinuation of the bell curve systems. The bell curve method used during appraisals was forcing managers to rate their colleagues against each other. This was perceived to be creating a discriminatory system to reward or punish employees. This 9 box method forced employees who were at certain quadrants to leave as they were boxed into a corner. The ditching of the bell curve sounded like a great idea. But, what replaced them needs a closer evaluation as the bell curve was used by many iconic companies for the longest time. Its been a couple of years into this implementation and we stopped by to check the progress made. We spoke to 15 large organisations who are undergoing this transition though they maintained that its still early days.

We picked organisations who had an employee base between 10,000 and 2,00,000 and the observations are worth reflecting.

The New System

First of all lets review this new performance management system. Though each of these organisations has their own unique processes, broadly they had more or less the same philosophy. They all want to provide real-time feedback to improvise over the once a year appraisal system of the past. Their intent is to evaluate each unit or individual independently than a relative comparison with other colleagues or departments. Organisations followed this up by aligning compensation and reward systems to individual and team achievements.

Ring your feedback timely

First Few Steps

Organisations transitioning from bell curve had to intensively communicate to their well spread out workforce through various mediums. However, the most important step was to train their managers who had to implement them. This was understandably a critical exercise as 90% of this change was dependent on the manager’s buy-in and subsequent execution. A user-friendly tech platform was the next key enabler. The first few firms who embraced the change were Tech companies themselves. They had an in-house tech capability and so building a user-friendly platform became even easier.

The Specialist CEO-Beginning of the End?

800 371 Kamal Karanth
A struggling bank with a poor asset base recruits a top performing sales head of a rival bank. It captures a huge market share over the next few years, turns out that NPAs have become significant and now the asset quality is in question. A large IT Services firm wants a makeover into a blue blood technology company and hire a Technocrat as a CEO, turns out the organization is able to attract some very good technology talent and few marquee clients. But, eventually, governance and stakeholder management take a beating. An ambitious domestic airline, wants to go big, needs to negotiate complex and large multiple deals to buy aircraft with favorable terms. They go for a General Counsel as their CEO. Many years later when their plans evolve to become an international airline they think the incumbent CEO is not scalable to the new task.

Sounds familiar? Yes, this has happened before and would happen again.

The Power of Context

We have grown up to know unlike born leaders there aren’t born CEOs. All have to climb the ladder to get to the corner room. Ever thought what was the previous role of any CEO before s/he became one? Let’s list down the precursor roles; CFO, Head of Marketing, General Counsel, COO and some of the rarest would have been CHROs. What’s your guess on how they cleared the last hurdle besides the luck/ favoritism factor? For that, we may need to dive deeper into how boards choose their CEOs!

First of all, the boards consider the context of the organization. The organization’s need to start up, turnaround, sustain success, build process plus controls, innovate for new products, expand globally, acquire will decide the kind of person who becomes the next CEO. It goes without saying that most employers go for an external hire when they don’t find the competencies internally for their context.

Claim to Fame

Context cannot be ignored by boards to meet shareholder’s immediate needs. So, when they make their choice there is always an element of risk about the long-term future. In spite, of this, the boards look into what the CXOs bring to the table immediately, based on their past roles. Every professional has a primary functional expertise which is what they have done for the longest time. Maybe, that’s also something they have developed an expertise in. Though many of them would have developed strong leadership skills, their functional expertise distinguishes them from the rest. This specialist knowhow becomes the bone of contention when the board makes that call.

After all, the CEO isn’t just a manager of multiple departments, there are functions where he is supposed to lead as well. It is very difficult for all the new CEOs to seamlessly adapt to multiple roles. There are certain departments where they will be more natural or specialized and a dumb in few; this most often decides their fate.

The Hangover Effect

In many cases, the new CEOs end up consuming too much time in their area of strengths or let’s say their past roles. The ex-sales CEO spending more time on sales, the Finance background CEO being too nosy with his finance team or the marketing oriented CEO holding each campaign for his approvals are common stories we have heard before. It’s either their need to contribute to their functional expertise or an inability to change to new areas is a matter of debate. It’s more likely that the new CEOs who adapt to the remaining functions faster are likely to be more successful and also liked by their stakeholders.

Would you take a salary cut and have the same commitment?

800 371 Kamal Karanth
Ever took a salarycut in your current job and continued to work there? Did your productivity drop after that? In a world where we don’t accept new job offers without significant salary hikes isn’t it hard to think of taking a salary cut and still work with the same intensity as before. Once 12 senior leaders of our organisation took a 15% salary cut for a quarter. They stated that the organisation wasn’t meeting the revenue goals, so they wanted to meet the bottom line commitment they had made. I cheekily told my boss that they could afford it as in my opinion their pay cheques were substantial. He said, “when you get here you will understand that at every level of the job the financial commitments are the same.” I couldn’t relate to it then but wonder what are the feelings one goes through during a salary cut? Do you 1. Feel insecure about your job in the firm or a signal to leave 2. Feel the organisation is going down the drain 3. Lose confidence in your leaders? 4. Tell your family or friends about this new crisis All I remember is that none of those leaders quit nor did any of the non-affected employees during that time. Would you take a salary cut and have the same commitment?

Why is the CXO leaving?

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Most of us are naturally curious on the “why” of it whenever a CXO resigns. The answers can be found by observing notice period completions and successor transitions. “It’s been a great learning journey and I am proud to have worked here for the last decade,” said a CXO after announcing his recent exit. “We are grateful for his contribution in taking our firm to the next orbit of growth” responded the company spokesperson. But, listen to the next line from the employer. “We are looking for a successor and have retained a search firm”. Isn’t that strange? Why is the CXO leaving the company he loved without waiting for his replacement? And why is the employer allowing its key leader to leave without finding a successor? If you are in a senior role for a long time there are bound to be differences arising from time to time leading to exits. Can both parties keep their egos aside for a few more months and really play out the external happy story internally as well? Twice in my life, I have walked into Country Head roles as an external replacement as those organizations never planned for succession. I can tell it was painful to take over and took longer to turn them around as the lack of understanding of internal dynamics hurt my transition pace.

How did you react to your reportees verbal duel?

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How did you react last time when two of your reportees got into a verbal duel in your presence, where the volume was high and the tone bordered around distrust? When it happened to me I felt glad. No, my sadism hasn’t got the better of me yet 🙂 my reasoning is that  1. If they could argue in my presence means there is a comfort to voice out differences when I am around. We can call it their guts or culture of the organization. 2. I got the opportunity to listen to both sides in person and sort it out right there. There wasn’t an opportunity for the whole organization to know before the boss got to know 3. I did not have to hear it from a third person which would have come in the form of their interpretation than what was said and why.  But, most of our reportee fights (email, calls, during meetings) are in our absence. The people who report them first to you sometimes get the advantage of your bias towards them. So, how do you feel when these verbal fights happen in your presence? I found myself blushing, embarrassed, helpless to state a few.  I wished I wasn’t there. I also felt we should have a culture where we shouldn’t even get there. But, it isn’t a workplace if people can’t express themselves. The problem is the how!