A CEO coach’s playbook for the new work world
Management guru
Ram Charan believes that it is time for companies to stop focussing solely on
the financial side, and start investing in the right talent
He is the corporate sage, the man with unparalleled
access to global boardrooms and its CEOs, but one could say that management
guru Ram Charan has a practical and minimalist lifestyle. Describing himself as
a “one-person shop”, the globe-trotting Charan lives in hotels, has an office
but reportedly has never stepped inside it, gets his clothes couriered to him
every few days to the part of the world he is in, and writes his books on his
smartphone during his travels. A “non-materalistic” person, Charan can afford
expensive suits and cufflinks, but doesn’t care for them. Instead, he sticks to
his Timex watch and admits to having splurged on a “bit costly shoes” because
of a foot ailment. A believer of ‘I am no good unless I add value to
individuals or the company’, Charan’s most prized possession is knowledge.
During his recent visit to India, US-based Charan spoke to ETPanache over the
phone about how companies need to rethink their talent management, the evolving
role of HR, and why leaders need to upgrade their skills.
What’s the most important
skillset for a CEO?
Diagnosing [the problem] precisely is extremely
important. That’s a very critical skill. Unless you know how to do it, you may
have some wrong solutions.
You have proposed that the HR’s
function needs to be included in macro decisions for effective talent
management. Can you elaborate?
In most companies, there is a rigour about the
financial side, but numbers don’t drive the company, people do. I believe in
bringing the CHRO (chief human resource officer) on a par with the CFO; put HR
and money together. If you appoint the right people, you may use less money. If
you appoint the wrong people, you may use more money. Right now, they are all
in silos. The CEO, CFO, CHROs must diagnose together about operations and
strategy. This [method] has been tested. It has necessitated that the CHRO has
worked in another function before he/she takes the position. In many US
companies, the CEO will not hire a CHRO who hasn’t worked in at least one other
function and done something constructive. Not just ticket punching.
Have you seen this happening in
India?
In Tata Communications. CEO Vinod Kumar and global
CHRO Aadesh Goyal rotate the HR in other functions. Every year, they take their
people to Silicon Valley for four weeks, and the [staff’s] mindset changes.
They’ve been doing this for the past five years. And the CHRO is a person who
understands business extremely well. In Aditya Birla Group, Santrupt Misra runs
a multibillion-dollar business and is also the CHRO. He brings those two things
together. We are allocating funds without attention to people. I say find
people first, then allocate funds. And depending on the person, allocate funds
differently. Older Indian firms who don’t have any MBAs [at the helm] do that.
They talk in private at home, saying, ‘This guy will do this, turn this thing
around. Give him $10 million more.’ They do this intuitively. But they have no
respect for the HR guy. Although I have never met Dhirubhai Ambani, he had a
nose for the right people. If you put the right person or a better person on a
job, your money allocation will be different.
A CEO coach’s playbook for the
new work world
How crucial is this for new-age
tech companies?
First of all, the speed of change is high compared to
just a few years ago. Second, you have speed and technology combined making the
change, so you have to get the right people for the right job faster. In one of
those Silicon Valley companies, the HR person is an M&A expert. This is
because they are buying a lot of small companies. They [the new employees] have
to be assimilated and they pay a very high price to these small companies. So,
you can’t have a CHRO who doesn’t understand people, cannot assimilate and is
totally ignorant to technology, it’s not going to work.
With automation, do you see
leaders/CEOs of conventional companies upgrading their skill?
Some are, some are not. The CEO of Singapore
Telecommunications (Singtel), Chua Sock Koong, invests the time. A number of
American CEOs are taking lessons. I don’t know about India, but they better
learn. Leaders will never succeed unless they continue to learn.
I have a CEO in America who is spending 20 per cent
of his time to visit start-ups across the globe. That’s where you do the
learning, not in the school. He says, ‘I am selling you nothing, I am buying
nothing. But I can learn a lot from you and I can help you not with sales, but
with contacts or with guidance to scale’. He loves it and says it’s the best
education he can get.
At times, businesses can get
damaged due to family feuds. What’s your take on this?
You have to come to terms that no two children have
the same personality and ambitions… You have to go with where children’s
aptitude and ambition lies. And the families will split. There are few families
that are intact in America. There are some in Scandinavia with the fifth or
sixth generation. You better plan for it.
rashmi.menon@timesgroup.com
ETM 10APR18
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