Published Editorial

Grow leaders from within rather than hiring from outside: Rajiv Krishnan

An interview with Partner and Leader, People & Organization Services, EY

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The Business Standard

Why is it that we don't see the top leader of a company hailing from the HR function? Very few corporate chiefs have an HR background.

This was true at a certain point in time; I don't think it holds true any longer. It's changing very rapidly. We've had several PSU CMDs who have come through the HR route, particularly in oil PSUs. We have also seen it in corporate India as well over the last three to four years. It's not changing very rapidly, but it's changing. Senior HR leaders are coming into their own and landing up with general management roles or CEO roles. I think the slow pace has to do with the evolution of the function itself.

It started with administration and moved on to designations like chief people officer or chief human resources officer. This evolution is sometimes referred to as moving from setting the table to being at the table. For a long time, HR was responsible for setting the table in board meetings. HR was doing everything except participating in the board. That, in a nutshell, summarizes the change.

What should HR do to prove its merit in an organization, as a lot of people feel the function can be done away with?

You can't force the pace or fast-forward it. The increasing importance of people in the business equation will ensure that HR gets its due. I think it is happening at the right pace. To think 'what should we do to make it happen?' means that one is assuming that one is already in a position of disadvantage. Paradoxically, with the advent of technology, the importance of people is only increasing.

HR as a discipline in India is far more evolved than in many other countries. India was among the first nations to have an institution, namely XLRI, giving a degree in HR in 1949. We have a bunch of B-schools today which have several specialist courses in HR. Psychology as a discipline is at the base of talent management and leadership development - a subject that has been in Indian universities for long. This has led to a rapid growth for Indian people in HR and they have gone on to assume global roles.

It is a common perception that HR tends to lack sound business expertise. Would it be prudent then to facilitate job rotation of HR experts to get them to understand business better?

Job rotation has been there for a long time in iconic firms. But in those firms, the management expects people to stay with the company for 20-30 years. So if you have such a long canvas then you can, maybe, do job rotations and so on. The reason why not much of that is happening is that everything is very fluid now and people are around for fewer years. On an average people are staying for three to five years in a firm. That attrition is at the root of a lesser emphasis on job rotation.

HR people are doing many things to manage business, like spending a lot of time in a particular sector. When you stay in a sector for a long time, you pick up a lot of business acumen from it.

With the current economic slowdown, do you see investment in employee engagement taking a significant dip?

There is a tightening of the belt that has happened as far as engagement is concerned. I wouldn't say it has gone out of the window. The conspicuous expenditure/lavishness may have been cut. In forward-looking firms, leadership development will not be affected. This is something you can't do in bits and pieces. You have to invest in it in a long-term way. You can't have a knee-jerk reaction to such investments; if you do it will reflect badly on the firm's goals.

Do you think most corporations are plagued with a bad rewards strategy or in some cases, the lack of one?

I am a believer in simplicity. There are firms that have very complex, over-engineered rewards strategies, but the word that is important now is 'fairness'. Right now, the bell curve way of ranking is being debated in companies. It was significant at one point in time when you had very large numbers but then it led to a scenario where people were using it to figure out who were the bottom 10 per cent of the employees and then asked them to go. This is not the right way of using rankings to determine who goes. Upwards of 50 per cent of private companies in India use the bell curve system in performance management. Some of the technology product companies have totally done away with the traditional ways of appraisal. Companies that offer a work-life balance, CSR etc. motivate employees more than those that offer only money.

What are the biggest challenges that a company faces when it comes to building a succession pipeline?

I believe in growing leaders from within a firm. I think it should be made very clear to people how they can grow within a firm - they should be able to see a career track on joining. When I joined the business 30 years ago, I remember the HR team had told some of us that our level is likely to change every three years. So someone added it up and figured that we could be CEOs at the age of 70 - there were that many levels in the organization! And this is assuming you got promoted on time. When people join a firm, they need to be able to see that path to the top. It can also be de-motivating if a firm repeatedly brings people from outside. It will lead to a feeling that the company isn't confident about its existing leaders.

What are the best ways to devise exit interviews?

Exit interviews should not become opportunities to get back at employees. The right time to do it is after the bonds are truly snapped and once the person is has received the experience letter and dues are cleared. The information, thus obtained, must be calibrated properly. It must also be done at multiple levels perhaps - once when the person is still at the firm and once when he has left. We need not make it a formal, structured process as no one will want to go through it twice. It can be done informally through a chat with people known to that person - this goes beyond ticking boxes. Mentors or internal coaches could be ideal for this, as would a skip-level boss.

A believer in simplicity

  • A post graduate in Business Management from XLRI, Jamshedpur and an honors graduate in Mechanical Engineering from NIT, Tiruchirapalli, Krishnan has over 21 years of HR consulting and services as well as sales and marketing experience
  • Krishnan started his career in 1984 at engineering and automotive company Escorts Limited in the industrial equipment division
  • His areas of expertise include leadership capability development, competency modelling and assessments, compensation, benefits and rewards, HR automation and outsourcing, strategic performance management, HR policies and systems, and HR audit, culture and engagement assessment
  • Krishnan has also worked with Ma Foi Management Consultants (now part of the Randstad Group). There, he handled new businesses like Temp Staffing, Payroll and HR outsourcing
  • Krishnan's last assignment prior to joining EY was with Mercer as India business leader, human capital for Mercer Consulting
  • Krishnan has assisted various organizations in India and overseas, helping them build competitive advantage and long-term value through their people. His work has involved developing HR strategy aligned to business strategy and translating the same to viable HR programs in the areas of developing and retaining talent