BPS Industry In India....

Why a blog post on the BPS industry (business process services for the uninitiated).   First to let readers understand that this is no longer a fledgling industry. Once called the sunrise industry it is today well established as a force to reckon with and one of the fastest growing industry sectors.   

In this and few more blogs I will cover how talent management and talent engagement in specific and many other life cycle stages are managed in this industry.   From my perspective... and the key driver  if I may say so is that I currently work in the BPS industry handling..... Organizational Effectiveness  for the BPS Line of Business of Tata Consultancy Services  (TCS).  

Truly a people intensive and fast growing industry and very relevant for discussing people related matters.  The BPS line of business accounts for about 12% of the overall revenues of TCS.   (closed FY13 with  overall revenue of INR 62,989 Crores or 11.57 Billion USD) 

Well BPS industry in a sense changed the fortunes of many many people in India.  Job opportunities shot up and the industry has contributed significantly to direct employment which grew from about 70,000 in 2001 to over 0.85 Million in 2011. Also from revenues of < 1 Billion USD in 2001 the industry crossed about 16 Billion USD in 2011 and today its revenues are in the range of 20 Billion USD which represents about 20% of the IT/ITeS industry.    

Slated to grow at a rapid pace even in the coming few years NASSCOM has projected a revenue of 50 Billion USD for this industry in 2020.  This surely implies that we are in a sweet spot today as far as potential and growth are concerned.

The industry hires employees with graduate, post graduate and higher advanced level degrees across a range of degree streams (Commerce, Finance,  Mathematics, Statistics, Biotech,  Pharma and Life Sciences,  Management,  etc... to name a few) and hence truly a big contributor to the diversity focus also.  In fact most companies in this sector have in upwards of 25% female composition in their workforce when some even have as high as 40 to 45% women in the workforce.

How the Comparative Figure would be calculated in Statutory Reporting of CEO Pay

Earlier, I wrote a blog post speaking about how there was a definite shift towards keeping tab on level of CEO compensation in comparison (relative to)  with what is earned by other employees by providing an indication of  how it compared to the median salary of the employees within an organization.

The question is how does this median get calculated.   Will it include Gross compensation or some other combination.  Last week there was an article on how CEO's have earned big salaries and this appeared  in a  USA Today article.

As per the USA Today write up there were 2 CEO's who took home over a Billion USD in 2012 and a 2 others who were pegged upward of  a quarter Billion USD.

While this amount includes both base salary paid to CEO's along with gains made from sale of stock vested in previous year and sold by the CEO,  is that the figure that would be comparable in the SEC (US) scheme of keeping tab on how much CEO was being paid as indicated in the link here. 

In my view a clear guideline needs to be provided how to compute the salary data for apple to apple comparison of organizations relative standing on CEO pay vis a vis company median.  And since median is sensitive to extremes to a lesser extent than mean the median is surely is a good robust metric to use.   However what needs to be more clear is what components go into the computation of the pay that will be used for comparison.

I feel that both base salary and bonuses along with stock sold is a good indicator.  Stock options are compensation at risk but do for component of the overall salary earned by the CEO.  Not including it would be detrimental to getting a link between company performance and CEO compensation.  Care needs to be taken to separate the ownership funds (via stocks) brought in by the promoters and payouts made to CEO's who may not be investor owners (upfront).  In such case only stock's sold need not be included in the earning.   Also dividends accumulated should be part of salary only if the same accrued from shares that were vested due to being employed and not being earned by stock ownership as a primary investor owner. 

Nevertheless this proposed change will also lead to a lot interest in studies on company performance versus number of times CEO pay is above the median salary of organizations.   This will also be an opportunity to compare the data for companies within an industry as well as across industries. 

You may also read

Keeping Tab of Executive Pay

Competency: Sum of Parts ??

You just lost the best person on your team- the champion who had the most admired knowledge, skill and resultant capability to close a deal in one of the complicated lines of business at your organization.   So what way did that impact your competency as an organization.  Does individual competency affect the overall organizational competency.   Does one person carrying away vital capability make any difference to your organization.   

We often hear -  organization is bigger than individuals.  Yes that's true and it is also true that the whole is greater than the sum of parts when it comes to the organization and its employees capabilities.   However the caution for leaders is to understand that even when you deduct something  the same logic holds true.   When a specific capability (embodied in the individual) leaves the decrease is also greater than just one persons capability going away.  You can't have a one sided equation can you?

Here are three aspects that can clarify.

a) An exit of any nature is like something which rocks the boat.  Thought processes are triggered in  mind of colleagues and coworkers as to what made him / her leave,  should they follow and look for a better paying job... if he / she could get 30% more can't I get 40% more. This puts some pressure in the system that has a push effect.  There is a drag on the agility vis a vis that cumulative capability that the individual contributed to.

b) There is bound to be some kind of imbalance in the target goal or objective at hand.   It is like a relay - one person less to handle the baton - maybe you can replace the individual quickly , even before he's actually left , but what about the hours and hours of practice that went in before the final race.   This applies even to work situations.   So it has a slow down kind of impact or at least a temporary one till the capability evens out.

c) Replacement cost, effort and time to speed for building the same capability means someone has to take time out to train or coach another person.  Someone has a temporary diversion of focus towards something other than the goal at hand.  Reduced focus means reduced capability.  Can it be simpler.  

In future posts we'll explore more of the fascinating aspects of competency both individual as well as organizational level.   Other posts related to competency

Competencies: What?

What Capabilities? Change Management

Is Promotion a Reward for Performance? Part III

In the first two parts (Part I here and Part II here) of this blog post about Promotion-Performance debate we looked at the question of whether Promotion is actually a reward for performance.   The dichotomy comes in when you don't understand that performance is  not a sufficient condition for promotion.  To rephrase - it more appropriate to how people should see it...  "Promotion is not causally related to performance"  or "Performance is not the cause of promotion". It maybe a pre condition or given but the real precedence is good fit on capability or competencies and whether the organization is growing, whether there are roles in the organization for the individual to move.  That is why companies known for their HR practices actually have multiple career path options for their employees.  

Hence we should look at the fallout of not communicating in clear and simple terms why someone did not get promoted.  Most of your A  raters who leave because they did not get promoted after being considered or were looked over for promotion could actually have been retained if only a bit of effort was put in to communicate the right reasons. 

Where HR teams and the managers fail, is their ability to communicate this aspect of a one sided relationship existing between performance and promotion.   Also at stake are ego,  self-esteem and motivation all a fall out of the perceptions about not being promoted that are in the minds of the people.   Also the organizations often leave people who are not promoted to their own devices in interpreting feedback and finding ways to achieve their career goals. 

Vague feedback from managers  like "You need to be a bit more hard boiled" or "You're just about there" add to the confusion in the mind of he employee and on top of it he / she is again worried that X got through the job but not me adding to the anxiety.  This reference group effect only complicates the perceived injustice or aberration in the system that people then attribute to the the whole process of promotion. 

There is always some fuzziness maintained by organizations on the promotion criteria and how those decisions are made however it is generally a fit perspective that is considered. What capabilities do you need for the role being considered and the degree of fit which the individual brings to the table.  We will continue to live with that fuzziness and cannot expect it as a problem that will go away sooner or later.  Of course if we don't want performance differentiation and everyone gets the same rating we'll have to wait for those complete "Robot Teams" whose synchronous delivery of goods and services will be very different from the human element.  And of course you won't have to motivate them except recharge or maybe at times tighten their nuts and bolts.

In Hindsight everything appears simple?

Have you realized that we take many many things for granted.  What is there is a simple chemical reaction such as 2 parts of hydrogen combined with one part of oxygen gives 2 parts of water...  or the fact that we human beings tend to display five levels of needs ranging from physiological at the lowest end to esteem needs at the other end.  In hindsight everything seems so simple and straitjacketed to the non discerning but to have thought of it this way and put the effort to come up with the framework or the model or the reaction or the observation is the challenge not everyone can do all the time.

Organizations have problems and HR functions have their own share and in every problem lies an opportunity to come up with some serious creative solutions.... a galore of opportunities if I may say so. But often I find that people are good at identifying the problem and defining it but the transition to finding the creative solution is missing.   

What gets the people's focus is about how to manage the problem and not solve the problem.  This comes from our patterned thinking and we look for patterns to be imposed on any problem we see. If we don't see a ready pattern we try to force fit one.  Therefore one outcome would be : Here's a problem how do I react.... Needs to be managed and keep the boat from rocking and bingo.... that is the end objective.  

To realize that the root of the problem needs to be fixed we should break out from that pattern and make  a determined effort to do so.  More on this in a later post.  

COMMENTS??

Creating an ambiance for innovation. What do you need?

Innovation means a sure departure from something incremental.  Something new, something different, something not done before.   Incremental change is not innovation.... rather just mere change... just like routine weather change.  Real innovation is like a storm, a cyclonic effect or even a tsunami.  I make that statement in the sense that it has a landscape changing ability and the focus is not on the damages and destruction of these natural disasters.   Most important in organizational context the product or process you created, changed or reworked should add something new of value to the customer to qualify as an innovation.   We often hear companies saying we need to strive to create a culture of innovation.   Doesn't it sound very simplistic?  When you truly manage to create a culture of innovation you can expect a drop in inhibitions,  you can expect lot of new products, services being made possible..... not just one off star kid innovations that you might find.

So what does it take.  Do you think people will read an email from CEO or Operations Leader and innovate or just because you opened an Innovation Lab your people would innovate.  Ask yourself how many people are even allowed access to that innovation lab.  So what exactly do we need to create that culture or environment for innovation.  Easier said ... than done.   There are three elements that need to be kept on top of your mind.  Apart from the investments (which keeps the money flowing into driving the innovation efforts) you need systems and processes to be in place.  Those that help reinforce three important elements that can sustain innovation.

a) Gaining Focus
b) Building Trust
c) Enabling Risk Taking Behaviors


If you want to "innovate" your focus needs to be right there - on innovation.  Focus bring attention and only when attention manifests does it get a possibility of action.   Imagine splitting your focus on several things at the same time, then what gets focus gets attention so it is only by chance that you MAY focus on innovation.  What does it mean on the ground?  It is about letting people have the time, the freedom to look for new things.  Innovation needs new ideas, new thinking which can only come from out of the box or non linear thinking or creative processes.   So people need to make deliberate attempts to bring that elusive "focus" on innovation.   Managers need to encourage ideas and evaluate rather than scrap them with a cursory look  over.   An idea which is novel cannot become an innovation unless it can be converted into a product or a service at a reasonable (practical) cost which someone will be willing to pay for it.  Otherwise it can only be applauded as an interesting idea.   

The question is who should focus.... Simple way to look at is that all those who can influence the innovation process should...if your finance guys and accountants don't understand and keep cutting down the budgets,  disapproving spending requests the focus gets lost.  The HR folks need to understand... are people given time from their routine work if they are to spend time on creative pursuits.   You can't expect everything to happen in the free time even if you THINK your employees are very motivated to spend their off work hours innovating.   Remember the 20% rule at 3M.

Trust gets broken when expectations are crushed, when false promises are made or when cunning sleight is used to distort the reality that people can obviously see.  Imagine the repercussion when one manager said.  "Team, I am not averse to your making that occasional mistake, but let that same mistake not repeat elsewhere once we learn about it" but each time someone faltered he pushed them against  the wall with subtle and overt behaviors that made them feel miserable.   Trust gets broken when simple acts of this  nature send strong and powerful signals that the slogans on innovation are mere lip service.

Finally put the first two together and you have risk taking encouraged in your organization. Without risk there can be no innovation. At a personal level innovativeness and risk taking are key traits among entrepreneurial people and this is something that you need to encourage in the question for innovation.   In today's world of large professionally managed organizations you can't just wait for the entrepreneurial talent in the traditional sense (who came with money, ideas and risk taking to invest)  rather we need to encourage the entrepreneurial capabilities among team members, line managers as well as leaders.

 If you are looking for an ROI do it for established, well oiled products and services. With right focus and trust innovation is surely going to get you much more ROI than you can ever calculate. 

However remember none of this can happen without a keen eye on what the innovation means.   Bringing innovation for the sake of innovation will not yield the right kind of results.

Is Promotion a Reward for Performance Part II

In an earlier post (Is Promotion A Reward for Performance) I had spoken about how organizations can stall the outcomes of an important process by positioning it inappropriately as something which is attributed as a reward for performance.  However performance is a necessary but no sufficient condition for a promotion.

Take the simple case of A being the best territory sales representative for GetWell Pharmaco.   As a Territory sales person he is responsible for ensuring good services to clients within a geographical boundary, increasing sales all at optimal travel and overhead costs. He is the star performer among sales folks.  A is a a go-getter, loves traveling, loves meeting people and extremely achievement oriented.  He always prefers to be in the limelight,  gets excited and highly motivated when receives a praise and recognition from the Regional Sales Head or the Territory Sales Manager.   The Regional Sales Head had just received a resignation letter from the Territory Sales Manager and was contemplating making A the new Territory Sales Manager in next 3 months.

When he discussed the proposal with the HR Manager he got the following feedback. A loves to follow schedules,  meet Doctors as per assigned protocols and engage with them in a very pleasing and detailed oriented manner. However he really hates managing outcome of others.  He just can't lead a team, motivate performance,  coach or mentor others.  He prefers being a star and can't stand losing out on sales targets.  He gets completely dejected and takes the failures to meet targets as his own doing. 

The regional sales head knows this very well and is not sure how to retain A if he is not able to promote him in at least next 2 years.  But the question is will he be setting up for failure.

It is in the interest of the organization to do something else to retain him.  So promoting your best sales person  might leave you with worrying about having a bad fit for a Territory Manager role because he has to fix targets for others,  drive up motivation,  arrange team meetings,  take stock of weekly performance all of which is not something that A is very keen on.   He needs a fair bit of coaching to scale up and manage before he can take up the role of Territory Manager and the HR team feels that this can happen only after 2 years of inputs

So what options does a manager have to retain A.    Here are three ways it can be done.  While the first is essential you have a choice among the other two.

• Assign a performance coach and work through action and improvement areas. Needs to be a two way process starting with establishing objectives,  working through with understanding barriers to improvement and then action planning followed by action to change 

•  Have an alternative engagement model for motivating and incentivizing the Sales Person (A in this case). This is very important and should be done in parallel to the coaching assignment.  That way A is focused on the achievement and it is important this laddering (showing few more steps on the path towards something different or a new role is to be done)is important.  Most organizations fail on this count and thus are unable to retain your good performer and lose them for lack of action taken.

• Look for a rotation to a new location or new product line in same role and change the context for the individual. It is more likely he / she will be engaged for the period since the change and  in parallel you need to work on the coaching bit

At times you may be promoting someone into his or her area of expertise or capability then in such case it may be a good thing but if not then it is a sure shot for failure.

Look forward to some ideas and comments and if you liked it feel free to share.

You may also want to read

Is Promotion A Reward for Performance - Part I

Learning from Stories : Power of Patience, Experience

Most readers would have heard this story which is a popular zen story on the internet. The story goes thus...

A Martial Arts Student went to his teacher and said earnestly, "I am devoted to studying your martial system. How long will it ake me to master it". The teachers reply was casual, "Ten Years".. Impatiently the student answered, "But I want to master it faster than that. I will work hard, very hard,  I will practice every day, ten or more hours a day if I have to do it. How long will it take then?" 

The teacher thought for a moment and said... "20 Years"

The teacher was emphasizing the virtue and value of being patient.  You really need some time to master a given task, job or capability.  For those who learnt car driving .....Imagine putting 12 hours of lessons in one day to learn to drive. It never happens that way.  The reason is that our brain takes time to go through the experience and slot the same into relevant repositories.  So although 20 years might seem exaggerated it is the message about being patient in accomplishment.   Some may do it faster and some slower but one needs to pace it as per his or her capabilities.  

When you try to deliver too much too soon there are bound to be mistakes, slip ups, and costly consequences but there could always be exceptions.  Either the work would get compromised or the individual would get burnt out.   Think of dieting all at once in a week rather than six months to shed a few kilos.  Consequences would be anyone's guess.

Many things that we do in life go un-enjoyed and un-cherished because we rush through it and don't really soak into the process of doing so.  Remember the last walk you had to a store or a friends place.... Did you take time to enjoy the nature, beauty of things on the way, the birds, the trees, the clouds or the starry night.    All that was probably at the back of your mind and out of focus.  (Read my blog on Focus bringing attention)

We will enjoy things more if we LIVE through the experience and savor it rather than trying to rush.  

However the message should not be confused with complacency or delayed fulfillment. It is about setting a right pace and optimal time for things.