Two CEO’s Better Than One

Indian technology giant Wipro has replaced former CEO Vivek Paul, who left in 2005, with two joint CEOs recently: Girish Paranjpe and Suresh Waswani.

 

This is a more than ever prevalent phenomenon. I see more and more companies which are adopting this route. There are surely some merits and advantages of this approach.

 

Let’s think about some advantages of this system over the more traditional system where few people ran for the post and only one made it:

 

-          In usual format, very often the top contender who does not make it, leaves the company (GE has several such instances every time they appointed global CEO). Joint CEO’s ensures retention.

-          How often do you find that the CEO is either strong in market place (customer oriented, sales kind of guy) or work place (people oriented guy). You don’t get the right mix of both easily. Joint CEO gets you that.

-          It provides for natural in-built succession planning as even if one leaves, you have the other completely on the job.

-          With the power of two to tango, persistence ability in implementation of strategy becomes much improved

 

Let’s look at the other side now in terms of disadvantages of this system:

 

-          In order to maintain balance of power almost every process in the Company would be divided amongst the two guys

-          Consensus driven strategy would almost always over ride the best strategy

-          Your people start getting dividing into camps on both side

-          Nothing is spontaneous and honest. Almost everything is pre-thought pre-planned to ensure friction.

 

I am sure there are several other benefits and disadvantages of this system. However I am of a firm believer that if strategy itself is not strong and powerful, no internal mechanism can deliver great results. I personally feel there is net loss to the company in long run in this system as everything gets convoluted in order to ensure consensus between the Joint CEO’s.

 

What are your thoughts on Joint CEO’s as a concept??

 

~~Rohit~~

Bachchan’s and Growth for Sake of Growth

Over weekend me and wify went for watching the much awaited Sarkar Raj. Somewhere in the movie Abhishek Bachchan and Aishwarya Rai are debating about their view points about businesses, profitability and social reforms. While Aishwarya is trying to establish a case for profitability as the core behind running businesses and in this case behind setting up a power plant (the point of contention in the movie, seemingly), Abhishek makes an interesting point: “plant ko banane ke liye paisa chahiye, paise ko banane ke liye plant nahi”…meaning “you need money to make the plant, you don’t need plant to make money”.

 

It raises an interesting question…we all talk of growth each year, higher top line, stronger bottom line etc etc. All of that because allegedly economy is growing and hence we should grow stronger. And ofcourse then there is all that relative growth. Grow more than your competitor, market share and all that. It’s growth for the sake of growth.

 

I wonder after creating a nice little vision statement, how many organizations revisit that…it’s just raised every now and then like a slogan…business growth is another matter as they would say J

 

Will we have an organization which is happy if they remain stagnant in growth, if there vision is met and lived day after day…or would we all continue to succumb under stock market commitments and money holders (I am not too sure if they all qualify to be called shareholders, hence the term money holders) theory of business for making money.

 

~~Rohit~~

 

 

Role of HR Professionals

I was talking to a journalist yesterday and she popped me a question, ‘Does HR function and HR team get credibility within an organization, if not why’.

 

Interesting question to start with. Think about it guys, likelihood of a People Challenge being top priority of a CEO is almost 90%. 9 out of every 10 CEO today have people challenge as their top 2 challenges. However interesting dichotomy is that probability of HR being a key function for a CEO is not more than 10%. Now that says something about positioning of HR fraternity in today’s environment inspite of the fact people issues have taken the center stage today.

 

In my view this data represents the reality of the delivered value by HR as a function today. Let’s look at some of the reasons why:

 

Business Planning Processes: Historically HR has played only a facilitation role in business planning, review, closure etc. Due to this fact they are so far from how the numbers are arrived at and what goes behind delivering them, the role remains what it starts with only, facilitation.

 

Academic Upbringing: As I had mentioned in my blog last month almost any HR professional has limited or no business financials understanding. The courses in business schools need serious relook for bridging this huge gap.

 

Late entry of HR Function: HR as a function and fraternity has ‘arrived’ only 5-6 years back in this market. Most of the other functions like finance and sales have been considered to be backbone of any business since times immemorial.

 

Zero Business Accountability: If you look at scorecards of most of the HR heads, items would read like establishing performance management system, creating incentive schemes, benchmarking compensation etc. How does it matter? What will all of this deliver?

 

 

In my view for HR to change all of this as a first step they need to change their view on accountabilities. While sales are accountable for top line, finance is accountable for funds flow and capital management, they need to take charge of a P&L or Balance Sheet linked item. The item that they could logically look at picking in my view is ‘Employee Productivity’: Revenue Per Employee and Cost Per Employee. If they could go to boards with performance plans having target numbers on the above 2 items, whatever they would do in order to achieve that will start having completely different dimensions, both for them and for the CEO.

 

You would then start looking at Performance Management Systems from the point of increasing productivity and not just ‘high performance environment’, you start looking at compensation decisions in light of controlling cost per employee and not just ‘benchmarking at certain percentile’, you start looking at hiring from efficiency of manpower numbers and talent model at various levels and not just ‘meeting business requirements. So on and so forth we could see the beginning of a change….beginning of HR creating some value for the business and for itself.

 

~~Rohit~~

 

 

 

 

Board Room Discussions

There is something about board room conversations and top management business reviews that never stops to alarm me. By definition these are the higher amongst equals, most expensive resources of any business….set of employees who are expected to create maximum business impact. Board room meetings are supposed to be brainstorming sessions just for that very purpose. These are meetings, workshops, sessions, battle ground…call them by whatever name….where they discuss business strategies and more importantly decide future course of action.

 

I have been witness to these discussions at various corporate houses. It’s fascinating the kind of discussion and brainstorming that takes place. However that’s pretty much what they remain mostly…discussion. The simplest yardsticks of efficiency of these discussions is to check how will anything in business be different from next day as a result of these discussions and then monitor gains or losses due to that. However if nothing is changing then great discussions is all it was. Somehow everyone assumes that a strategic call has been taken. It reminds me often of the old Jaspal Bhatti jokes…”sir we had a very successful meeting…..what got decided…well we decided the next meeting date”. I so wish the amount of time that is spent in detailing logistics, meeting date, venue, lunch order etc. was spent on detailing business actions and not just leave it at discussion level.

 

Simple yardstick I recommend for any organization as a yardstick is to pen down discussions that took place during the last 7 or 8 meetings and see the state of those decisions currently. Well if your answer is less than 25%, you have been spending too much time doing facial exercise and not mental exercise.

 

Some very simple basics to remember like a check list in my view for every decision taken:

·     Who all does it impact?

·     Is there some formal/informal communication required and who will do that?

·     What does everyone involved need to do differently as a result?

·     Does any MIS or reporting need to change as a result?

·     Will any of the existing business activities get impacted and would they need any support?

 

Well it might seem unglamorous detailing compared to the glamorous strategic brainstorming…..but then I am not particularly a big fan of glamour in business for the heck of it….I guess that’s a separate discussion J

 

~~Rohit~~

 

Converted to HR…

After completing my CA I had never imagined in wildest of my dream that I would be doing anything to do with people consulting or Human Resources. My closest encounter to the function was doing some process due diligence and risk audit while managing my independent practice. I used to laugh it off at that time for the fact I found that function very administrative in nature and really not much direct business impact.

 

As luck would have it I got sucked into People consulting in mid 2000….at some point I surely want to pen down the circumstances in which I joined people consulting at PriceWaterhouse Coopers and since then I made several valiant efforts to get back to the real business world J

 

I have always had a fundamental problem with the HR fraternity at large and the function. Maybe difficulty in digesting some of the facts was more since I came from a hard wired financial world, where everything would always link back to the P&L or the Balance Sheet. Some of the early amusing facts I discovered were:

·     No one ever has a business plan or even a simple cost and benefit analysis for any initiative

·     No one ever wants to establish a direct linkage of their work with business performance….everyone wants you to believe there is a “strong empirical evidence”, not even remote linkage mind you

·     There is never a conversation about routine matters….everyone is always thinking about transforming the organization

·     Almost no one actually understands any financial word

 

Pardon my saying so it almost felt very common sensical work. Though maybe that’s what every work requires anyways J

 

Having being in this arena for close to 8 years now I must admit I have always felt reluctant to admit I am a HR professional. To all the friends and family I mentioned I do some fancy organization consulting or strategic consulting. It just felt better J

 

There have been some very interesting moments of learning and experiences however during these 8 years. For a long time I wanted to start blogging and pen down some of those….however I just didn’t understand the world of blogging. As much as I thought I was good with technology I realized technology for me meant MS world and Google. It has taken me a long time to just figure out how to get blogging.

 

Just the fact that my knowledge is so limited to MS World I guess it’s about time to self admit, I have become a part of the HR fraternity…..while of course financial management will always flow in my blood.

 

~~Rohit~~