In 1983, Rajesh Kohli dies intestate, without a will, at the age of 57. Rajesh and his wife, Shobita, created a strong middle class family and invested most of their assets in

educating their three sons, Ravi, Nitin and Arvind. It was to Nitin, the son with a head for business, that the father bestowed $50,000 shortly before his death, asking him to invest it on behalf of the family. This vague command-ment works for nearly 25 years. Nitin grows his original business to assets of over $30 million, all of which are in his name, as is the custom in Hindu Undivided Families. He thinks he has been loyal, dependable, trustworthy, support-ing his brothers and their children financially through good times and bad. But now his brothers want a clear separation of the busi-ness and his former feelings of generosity are replaced by a desire to be free of them and their lack of appreciation...

Nitin Kohli is one of the several case studies that John Davis of Harvard Business School (HBS) has written on Indian business families. The names are disguised, as is usual with HBS case studies, but the students attending the HBS programme he teaches in India wouldn’t have any problem identifying with the Kohli fam-ily. Nor would the students from other parts of

South Asia and the Middle East who fly down to Mumbai for the programme. Davis, who teach-es an elective course on Managing the Family Business at HBS and has been researching the subject the for 30 years, including in 60 coun-tries outside of the US, and he feels that family businesses are remarkably similar the world over: “Different cultures do more or less of cer-tain things, but the similarities are more than the differences. For example, the patriarch exists everywhere, though he may have more power in certain cultures than others. “

India has seen the decline of the joint family in business houses, which has been replaced by a loose system of living independently in prox-imity. This is similar to the way things are done in South America. “Activities are arranged to ensure that families come together regularly. It helps perpetuate the family business, uniting everyone around a sense of mission. Of course, there will always be some who find even this to be stifling and they will move away and estab-lish a wholly independent life,” says Davis.

The focus of Davis’ current research is on how families identify and develop wealth creat-ers in every generation. In the Nitin Kohli case, the father identified the middle sibling as the wealth creator. How do other business families do it? “The wealth creators are usually identi-fied when they between 8 and 14 years of age,” says Davis. “I’ve asked heirs when they knew they were going to follow their dads into the family business and some said they has a strong sense of their destiny at the age of six. It may not be planned, but a certain amount of implicit searching goes on in every business family.”

Traditional business families go to great lengths to develop the next generation and in-still in them a sense of dynasty. Earlier, the eld-est son might have been the first choice, but that has changed and younger siblings — including daughters — with a genuine talent for business are being given their due. “Being a successor is

a tough road,” says Davis, “You’re constantly compared to your father and you have to prove yourself worthy. People doubt you capabili-ties, which means you need a thick skin. You are dealing with a consortium of relatives and need political skills. You may have to fire a non-performing nephew, while dealing with your sister, who may have a substantial stake in the company. For most heads of family-run compa-nies, family issues take up half the time.”

Once the family has found its wealth creator, other siblings are usually left free to make their own choices, including the option of moving out of business altogether and making a career in the arts. Davis himself comes from a entrepre-neurial lineage — both his grandfathers were businessmen — but he has chosen to teach rath-er than practice. The importance of family busi-nesses has declined in the US, though even now, more than half the publically traded corpora-tions there are family run. In India, Davis es-timates it to be two-thirds, which is close to the world average. However, many of these are now run by professionals, though the chairman may be from the family. “Once the company grows beyond a certain point, it’s hard for the family to keep up. That’s when they transition to a bring-ing in a professional CEO,” says Davis.

Family-run companies have never been the top choice for graduates of top b-schools like HBS, but Davis feels the option shouldn’t be scoffed at. “Family companies focus on the long term and thereby provide a sense of stability. They did better than other companies during the recent downturn. Banks are now paying more attention to them because family run companies have more money than anyone else,” says Davis.

Do family business houses inevitably go into decline after three generations? Davis doesn’t have scientific proof — three generations last over 100 years and nobody seems to have collated the data —but he’s inclined to agree with this perception. The reasons are many. Wealth is best generated through operations and not stock investments, but over time assets mature and the industry that the family is in often goes into decline, which means a fall in returns. And of course, there’s the indolence that sets in among family members of the third generation. “By the third generation, family members are consuming too much, more than they can afford. That’s when the decline be-comes visible,” says Davis.

dibeyendu.ganguly@timesgroup.com

01 July 10 - 17, 2014

THEECONOMICTIMES

orporateDossier C

If business families are to survive and thrive, they need to identify wealth creators in every generation by Dibeyendu Ganguly

Generation to Generation: By John A. Davis, Marion McCollom Hampton, Ivan Lansberg

An overview of family business as a specific organizational form. Focusing on the inevitable maturing of families and their firms over time, the authors write of the challenges

family businesses face as they move through their life cycles. This book presents a multidimensional model of a family business that explores the various stages in the family business life span to extract lessons about how family businesses should be organized.

When Family Businessesare Best: The Parallel Planning Process for Family Harmony and Business Success by Randel S. Carlock

Families are about caring and business is about money — not a likely formula for a successful partnership. A professor in Entrepreneurial Leadership at INSEAD, Carlock provides a diagnostic of how to work around the pitfalls.

Inside the Multi-Generational Family Business: By Mark T. Green

Brings insight on nine symptoms of generational stack-up and how to cure them. The focus is on how family relations can affect the success or the failure of a family business.

Family business generations each have their own working style and approach to doing business. For this reason, having a more comprehensive understanding of the characteristics of each generation in the family business can really improve the performance of multi-generational family businesses

...BOOKWISE

5 PATRIARCH’S POWER MAY VARY DEPENDING ON THE CUTURAL CONTEXT

4 THE FAMILY NEEDS TO IDENTIFY FUTURE BUSINESS LEADERS WHEN THEY ARE STILL CHILDREN

3 A SUCCESSOR NEEDS POLITICAL SKILLS TO DEAL WITH A CONSORTIUM OF RELATIVES

2 FOR HEADS OF FAMILY-RUN COMPANIES, FAMILY ISSUES TAKE UP HALF THE TIME

1 FAMILY BUSINESSES DO GO INTO DECLINE AFTER THREE GENERATIONS

5TO PONDERPOINTS

Game of Thronesguru speak: John Davis, Professor, Author, Consultant

Samuel J. Palmisano spent nearly four decades at IBM, where he was responsible for leading its transition from a computer maker into a ser-vices and consulting firm. After retiring as Chairman

in 2012, Palmisano, 62, has focused his energies on building a think-tank, The Center for Global Enterprise. The aim is to establish a new set of management and leadership principles to build and lead a 21st century global organisation. “ I like to say that the globally integrated enterprise is more a frame of mind – a way of thinking – more than an organization chart,” says Palmisano who led this directional change at IBM. He recently published an e-book, Re-Think: A Path to the Future which has his take on competition in the ‘first truly global era in human history’. Palmisano shares with CD how the globally integrated enterprise is the way forward and how organisations can handle this transition. Edited excerpts:

Why is the hub-and-spoke model no longer relevant?It is more that the hub-and-spoke is no longer necessary, nor is it sufficient to be competitive. During the last three decades of the 20th century, some important changes unfolded across the global economy that cre-ated opportunities for companies to upend traditional organizational structures and become more unified in their outlook, and more integrated in their operations.

First, economic nationalism abated – trade and investment barriers receded and capital controls were liberalized. The result was a boom in trade and invest-ment. Second, starting in the early 1970s, the revolution in information technology dramatically improved the quality and reduced the cost of global communications and business operations. Suddenly, busi-nesses could “go global” without needing to open foreign offices, as a website provided the kind of global presence that would have

been unthinkable just a few years earlier.Third, standardized technologies and

business operations emerged all over the world. By interlinking and facilitating work both within and among companies, standards fostered efficiency and liberated companies to focus in areas that would

drive lasting growth and renewal, such as innovation. Similarly, by creating common platforms, standards were a great enabler of scale. These three elements combined to fundamentally transform the oppor-tunities for globalization and help give rise to the globally integrated enterprise

(GIE). With fewer obstacles to selling and operating around the world, companies could shift their focus from products to production – with greater emphasis on how to manufacture goods and how to deliver services. These elements also positioned companies to become less hierarchical,

with decision-making more distributed as information and key data became widely accessible, and core processes and func-tions that were once managed regionally could be managed globally.

Continued on pg 2 Wake-up...

The Time

HasCome

Former IBM chairman Samuel Palmisano on creating the globally

integrated enterprise by Priyanka Sangani

Be globally consistent but locally relevant

Learn to operate in many different kinds of environments

Gain perspective by stepping outside headquarters

Encourage disrupters and unorthodox thinkers

Lower the center of gravity, away from headquarters and toward local markets

See the world as it is – not the way you

want it to be

Create a common culture around

common values

Formerly: Chairman, President & CEO, IBM

Education:Bachelor’s degree in History from-

John Hopkins University

First Job: Started his career with

IBM in 1973 as a salesman and retired after 39 years

with the company

Claim to fame: Spearheaded the transition into

analytics and cloud-based services

under the ‘smarter planet’ campaign

Samuel J. Palmisano Chairman, The Center for

Global Enterprise

global CEO

Palmisano’s Prescription

ILLUSTRATIO

N: CHAD

CR

OW

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01 July 11-17, 2014

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< The Time...Continued from pg 1

How is the DNA of a GIE different from an MNC?The globally integrated enterprise refers to companies that are truly global, as opposed to multinational, in their management and their operations. In this model, work is organ-ized in fundamentally different ways. It calls for different skills and behaviours, more collaboration, greater focus on a multiplicity of cultural differences and less hierarchy. For example, decisions about where to locate operations are based on how to maximize value for customers, employees, and business partners. Instead of taking people to where the work is, you take work to where the people are. Thus rather than maintaining separate supply chains in different markets, there is one supply chain, and it’s global, not just for products, but also services, capital, ideas, and intellectual property.

Similarly, human capital is thought of not in terms of countries and regions and busi-ness units, but rather how to manage and de-ploy it as one global asset. The GIE is nimble – possessing the ability to quickly enter new markets and seize business opportunities wherever they arise. It operates seamlessly as a single organic entity by integrating in-ternal operations horizontally and globally, collaborating with external partners, and operating at the best location in the world, to maximize value creation from a global point of view.

When I joined IBM in 1973, it was a classic multinational – with mini-IBMs in countries all around the world. It was a very successful model. It allowed us to grow in those markets and understand local customer require-ments and customs. The IBM brand became a strong national asset in each of these coun-tries. We developed local talent, hired and developed leaders “in country” and exposed them to various parts of IBM during their careers. This was a very efficient way to grow in local markets, for a while. But the world changed. We needed to rethink how we managed and thought about our busi-ness. What once looked like efficiency, came to look like redundancy. The GIE model was enabled by changing market, policy, infra-structure and technology trends. We chose to go to the future and embrace new ways of structuring the company and new manage-ment approaches to create greater agility and productivity.

GIE is an execution model, what about strategy, will a GIE transition mean a change in strategy too?Absolutely. What I came to understand as CEO, following a series of wake-up calls, was the reality of global integration and that it had changed the corporate model and the nature of work itself. Ongoing technol-ogy advances were making it ever easier to trade, interact and transact business across geographic boundaries, time zones and languages.

I saw that there would be winners, and there would be losers. And I saw that the new leaders would win not by surviving the storm, but rather by fundamentally chang-ing the game. So that’s what we did at IBM – we changed the game. Our evolution into a globally integrated enterprise changed the way the company worked, managed, and made decisions – from sales and marketing to HR and research. We significantly low-

ered our operational center of gravity – away from headquarters, closer to markets and customers. And we didn’t simply enter mar-kets. As IBM has done throughout its his-tory, we made markets, working with lead-ers in business, government, academia and community organizations to help advance their national agenda and address their soci-etal needs. It requires building real skills in the local workforce and enabling new capa-

bilities among its citizenry – being a force for modernization and progress.

Many of these changes were huge shifts for IBM – but I believed they were necessary if we were going to capture the benefits and step up to the challenges of a globally inte-grating economy. And the changes weren’t just happening at IBM. Throughout the world, I saw that organizations with a global-ly integrated business model were optimiz-ing resources and capital productivity on a global basis while also reducing costs.

What are the possible pitfalls a company should watch out for? For most companies, evolving into a GIE will require a wholesale transformation. And transforming a company of any size is never easy. There are different transforma-tions for different circumstances, of course. If a company is on its back and struggling to survive, there’s going to be less resistance – internally and externally – to wholesale change. But sometimes success can be a com-pany’s undoing as it breeds complacency and an unwillingness or inability to institute the reforms needed to sustain the success. And this applies not just to companies – countless countries have fallen into the trap of basking in their past glories rather than positioning themselves for future growth.

A common pitfall is for management to see the future the way it would like it to be, rather than how it is unfolding or will likely be. It is hard to be objective about change when you have been so successful using certain business models and practices. But I realized you must move to the future no mat-ter how hard it may be --- and there will be times that it will be VERY hard. If you aren’t

objective about the future and what it means for your company’s value proposition, ulti-mately, your past success will be overcome by the innovation of the future.

How do you manage innovation in a GIE?Every enterprise and every society must simultaneously invest in the future and improve its competitive muscle tone. While there’s a compelling case for dealing with financial deficits, both public and private, anyone who has worked in an innovation-based business knows that you cannot cost-cut your way to competitiveness. You have to invest in your future, and you have to sustain it in good times and bad. This is something IBM learned decades ago – and the lesson is similar for cities and societies. Winning on a flatter, higher playing field will require increased investments in key areas such as infrastructure, disruptive business models, contemporary skills and deep research.

And it’s not just about investment. Policies must be adapted to nurture and promote an innovation economy. Every city and coun-try, like every start-up or globally integrated enterprise, must be able to tap into global supply chains, talent pools and collaborative relationships. They must use them to create things of indigenous value, whether prod-ucts or services.

What factors do you keep in mind while taking business portfolio decisions?A centerpiece of the IBM transformation was exiting businesses that we believed did not fit IBM’s future business model – such as the actions we took regarding PCs and hard disk drives. In these instances, and many

others where we were advancing major re-forms, my colleagues and I learned that if we only described the reforms as driven by “re-engineering,” we were going to meet fierce internal resistance. Employees needed to hear more detail and, frankly, they deserved to hear how the reforms being implemented were part of a larger strategy to enhance the company’s long-term competitiveness.

So as part of our transformation agenda, we set out to answer two basic questions: Is there a future for the company? Is there a future for me in the company? When answer-ing the first question, we explained the prin-ciples underlying our vision for the globally integrated enterprise.

The answer to the second question wasn’t quite as simple. For some IBMers, they might need to learn new skills given our move to becoming a globally integrated en-terprise. But one of the many benefits of our highly educated workforce was that indi-viduals were capable of doing many different things, and so many of those working in divi-sions we were selling could be transitioned into new roles.

Which companies have managed this tran-sition to being a GIE well?No company is 100% done but in my book Re-Think, I showcase three companies that have begun the transition: Cemex of Mexico, a leading producer of cement and other building materials; Bharti Airtel of India, one of the world’s most dynamic cellular telephone providers; and Geely of China, which is making major inroads in the global car industry.

priyanka.sangani@timesgroup.com

In Kalidasa’s Shakuntalayam, the ri-shi Durvasa gets very upset because Kanva’s daughter Shakuntala refuses to pay attention to him. She is too busy thinking of her

beloved, Dushayanta. So Durvasa curses Shakuntala that her beloved will forget her. In the Tirumala Sthala Purana, even Vishnu is punished for not displaying awareness and not giving at-tention to a rishi. While he is the company of Lakshmi, he ignores Bhrigu who is so upset that he kicks Vishnu on the chest.

Such events where people feel slighted and ignored are lethal in the corporate

world. We can lose a customer, a con-tract or even a job, in the absence of awareness and attention. But these are

not part of the modern management lexi-con. Why? Because awareness and atten-

tion cannot be measured. Modern management is based on

the principle that only that which can be measured can be man-aged. Sometimes, it even goes to the extreme of assum-ing that which cannot be

measured does not exist. Since emotions cannot be measured, modern management does not bother with it. Attempts

are made to quan-tify emotions as

suggested by concepts like ‘Emotional Quotient’ (EQ) but everyone knows that mathemati-

cal frameworks are woefully adequate when it comes to quantifying matters of the heart.

So modern management has come up with a new strategy to cover its inadequacies. It is called ‘being profes-sional’. It basically means doing your job without indulging any emotions. It’s a mild version of psychopathic behaviour. You don’t feel, you don’t think, you just do. For behaviour is the bottom-line.

Processes are another attempt to over-come the lack of awareness or attention in employees. The job has to get done whether your mind is in it or not. So we create rules, and a system of rewards and recognition, to get people do what we want them to do, forcing them to act even if they

are not aware or attentive. That is what creates the zombie like voice we hear in telemarking and customer service calls, or the over-enthusiastic artificial smiles we see in airports and hotels. You know they don’t see you. You can see it in those dead eyes.

Indian thought plays a great deal of value on awareness or attention. In Patanjali’s yoga-sutra the steps dharana and dhyana of the 8-fold path refer to awareness and attention. Awareness is about perspective and attention is about focus. Both enable humans to connect with other humans. They enable us to en-joy the task at hand and be sensitive to the feelings of others.

Every human being wants to feel he matters. And he wants to be given atten-tion. Customers love it when service-providers lavish them with attention. Bosses love it when subordinates make them feel important. Employees love it when management shows awareness of their issues and anticipates their con-cerns. To be in the field of awareness and attention is critical to feel valued and loved. We love gadgets that anticipate our moves because it deludes us that we have

been ‘seen’. One reason why we love dogs is because they give us unconditional at-tention.

Tragically, the only place corporates value awareness and attention is when there is need to monitor truants and

catch thieves. So we have over-sensitive security systems and CCTVs that watch everything and everyone. These are used not to recognize celebrate successes but to identify and rectify failures. We have glorified corporate stalking in the name of corporate security for it protects share-holder value. Such awareness and atten-tion born of a paranoid mind is creepy to say the least. It is not what Patanjali was talking about.

No CEO can have an awareness dash-board. No annual general report will have any line time that talks about the qual-ity of attention given by management to employees and employees to customers. We cannot force people to be aware and attentive. These are invisible intangible mental processes that are completely in human control. It can only be unleashed voluntarily. The corporate can force an employee to be behaviourally aligned, but it can never force an employee to be aware or grant attention. This is the tool used by employees to exert revenge on their boss-es. A good boss needs to be aware of its absence if he wants to create a sensitive, caring and attentive organisation. CD

Corporate Dossier July 10-17, 201402

Processes are another attempt to overcome the lack of awareness or attention in

employees. The job has to get done whether your mind is in it or not

The corporate can force an employee

to be behaviourally aligned, but it can never force an employee to be aware or grant attention. This is the tool used by employees to exert revenge on their bosses

We can lose a customer, a contract or even a job, in

the absence of awareness and attention. But these

are not part of the modern management lexicon

management mythos

Measure of Awareness Everybody craves attention. Then why are corporates so bad at providing it?

Devdutt Pattanaik writes and lectures on relevance of mythology in management. He is the author of Business Sutra: an Indian approach to management

SIZE YOURSELF UPThe Center for Global Enterprise has developed a set of best practices that are fundamental to a company opera-ting as a globally integrated enterprise (GIE). Measuring how your company operates in these six areas is a good place to begin assessing your transfor-mation into a GIE. They are:

1. Global versus local sales and mar-keting

2. Supply chain market access and distribution effi ciency

3. Creating, managing, and protect-ing Intellectual Property (IP)

4. Company culture, leadership identifi cation and development

5. Economic and Financial Manage-ment (treasury/accounting/cash management)

6. Building government trust for market access and freedom of action

Wake-up Call

02 Corporate Dossier July 11-17, 2014

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Asteady growth path, robust learning and development programmes or regular employee benefit plans are not enough to meet the expectations of today’s workforce, a significant

number in which is the GenY. To meet this changing employee demand, in an environ-ment where there is dearth of quality tal-ent, progressive companies are constantly tweaking their policies with innovative and unconventional thinking to retain its high potentials and attract the best young talent. The companies featuring in The Economic Times & Great Place to Work list-ing of India’s Best Companies to Work For 2014 -- including Godrej Consumer Products (GCPL), MakeMyTrip.com, Mahindra & Mahindra, Lupin Pharma, Shoppers Stop, Intel — have overhauled their human re-source (HR) practices in order to make themselves coveted employers.

The focus of these compa-nies over the last three years has been creating talent pipelines where the supply exceeds demand. Global exposure, flexi-timing and robust leave policies, are among the various initiatives that that have under-

scored the efforts of HR at these companies in recent times. “Good induction programs, steady career growth, better than indus-try benefit programs are taken as ‘given’. Employees seek excitement in their work and diversity in learning and experience,” says Divakar Kaza, deputy general manager HR at Lupin.

In 2012, GCPL introduced Godrej LOUD, an innovative approach to business school recruiting. It offered sponsorship, mentor-ing and pre-placement summer offers on campus, two months before the recruit-ment season began. “We made every step of LOUD as innovative as we could. Given its high connect, we also hosted LOUD for Godrej employees across our India and international businesses,” says Rahul Gama, Executive Vice President, HR. With international businesses contributing almost 47% of overall revenues compared with about 15% in 2010, GCPL took its management trainee programme international and hired talent from top busi-ness and graduate schools in regions where its businesses are expanding, particularly in South East Asia.

In 2012, after conducting a thorough study and research of all job roles in manufac-turing and R&D, Lupin conceptualised “STEP: Structured Targets for Effective Performance”, to bring in more transpar-ency, rigour and effectiveness in target set-ting and performance evaluation. “Setting targets that are well-understood and well-defined along with the measurement metrics has brought focus on the right pri-orities which are appropriately aligned with business goals. As a result, the performance management process itself has undergone a radical transformation,” says Kaza.

In 2011, Lupin started “Learn & Earn” program, for attracting fresh talent. The 3-yr program aims to reach out to deserving Std XII students in semi-urban/ rural India from financially depressed backgrounds, and gen-erate employment opportunities for them, while fulfilling their aspiration to earn a for-mal degree. These students join the Lupin as “learners” and get on-the-job training from Monday through Friday in the company’s

plants. They also attend classes during the weekends for the dura-tion of the course and get stipends of Rs 7,500 - 10,500 per month. The fees for the education is borne by the company. On successful com-pletion of the course, the students

are awarded a bachelors degree in industrial drug science and guaranteed employment in Lupin’s manufacturing plants. There are over 400 such learners in the company cur-rently and the first batch of 250 will be pass-ing out in July 2014.

Over the past three years Vodafone has laid a strong emphasis on the health and well being of its employees. The company launched a safety drive for employees which meant absolute insistence on safety rules, including wearing helmets and seatbelts. This was part of International Safety Rating System (ISRS) that Vodafone was implementing across India as part of a larger global adher-ence. “Our culture carries a strong passion to win and an openness to listen and do the

right thing,” says Ashok Ramchandran, director, HR.

New generation companies such as travel portal MakeMyTrip.com started using more of technology for employee engagement. In 2012, MakeMyTrip.com started using gamification techniques for new hires. The campaign includes gamification techniques supported by TripOn app - loaded with quiz-zes, badges, factopedias, hints, and pop up videos about the company history, policies, and businesses. A member from the HR team facilitates in-class ice breaker sessions, exercises, office scavenger hunts (involves locating and identifying various members of the MakeMyTrip team and key office locations, getting clicked against them to score) and a fast-paced 20-20 quiz to summarize learnings. The platform is fully enabled for a social learning expe-rience as employees can see each other’s profile, pictures, interests and scores. The graduates are rewarded with branded com-pany T-shirts and goodie bags.

“After the successful re-sponse to the technique, we have now extended the ap-proach to our international training programs like Grow Travel Academy (GTA) for

Thailand, Malaysia, Singapore and Hong Kong,” says Yuvaraj Srivastava, SVP - HR, MakeMyTrip.com. GTA covers all-India Outbound Holiday-sellers including retail and CCG teams, which is close to 300 employ-

ees. The company also introduced a concept called Holiday Experts which is comprised entirely of home-makers who want to do supplemental work at a flexi-basis. Within a short time, this channel has grown to nearly 900 Holiday Experts (their full-time employ-ee headcount is about 1200).

One of the innovations that Mahindra & Mahindra’s au-tomotive and farm division has brought about was “Farm Passion” to inculcate an un-derstanding of agriculture and farming across the sector and make it a key business and employee competency. “We also look at percentage of employees that vis-it the Farm Passion website for information

and also number of visits we get on our website. On an average 29% of our employees visit the website on a daily basis. In total we had 2,18,544 number of visits for our website last year,” says

Chief People Officer Rajeshwar Tripathi. The company also started ‘Mahindra

Farmstays’ to help employees live and un-derstand a farmer’s life, where employees spend 10 days in a year with the farmer to understand his lifestyle. They spend time at village choupals, with local mechanics, drive a tractor and plough fields. “Though it is difficult to measure some the immediate impact of the unique initiatives mentioned like ‘Mahindra Farmstays’ and e-learning modules, we believe that it will surely help in achieving our goal of farm tech prosperity by building farm passion in the organiza-tion,” says Tripathi.

At Intel, HR has transformed itself in the last two years to prioritise strategic part-nership and internal HR consulting to the business. “Aside from the corporate wide

HR transformation, another innovative corporate move has been an experiment on setting up a HR Innovation Lab to aggregate and identify innovation themes that HR

could work on and create an environment to sustain them,” says Preethi Madappa, Director -South Asia HR.

Besides these corporate initia-tives, the company made opera-tional HR innovations at a local level to make their processes more employee friendly. “We have tried some customized ap-

proaches to leadership development that are still underway,” says Madappa. Recently Intel partnered with a vendor to deliver a peer learning session using participative theatre.

To give instant recognition to staff, Shoppers Stop this year came up with a concept of “Goodie bag”, which is a bag filled with gifts and certificates to recog-nize achievement by the front end staff. It is issued to all store managers and area controllers. “We believe nothing works like “instant recognition”. This is to empower our managers in the store to recognize any frontline staff or manager for their good work,” says Satyashish Banerjee, senior manager HR at Shoppers Stop.

In October 2012, the retailer kicked off an initiative called I Pledge, aimed at creating a deeper connect among the employees with the organisation values. It created book called “I Pledge book” - a larger than life book [23 Inches (w) X 36 Inches (l) X 10 inches (h) - having over 950 pages and weighing 170 + Kgs] which travelled across the country in a car and has over 15,000 signatures and feed-back of all employees and support staff. CD

rica.bhattacharyya@timesgroup.com

Corporate Dossier July 10-17, 201403

strategy

When Ajit Melarkode joined Rackspace as Asia Pacific chief a few months back, he was expecting teething trouble.

“Based on some earlier joining experiences, I was expecting not-so-friendly co-workers initially,” he says. “Instead, I was greeted by collaborative colleagues ready to discuss mistakes and work out solutions together.”

One more ‘Racker’ (an endearing prseu-donym for a Rackspace staffer) was born. Teamwork at Rackspace is not just a word, but a template that sets this cloud comput-ing firm apart from its peers. Yet another strategic pillar that helps Rackspace thrive is what co-founder and CEO Graham Weston calls ‘fanatical support’ — creat-ing a gold standard in customer service through an empowered team.

Rackspace operates in a competitive cloud hosting space dominated by Amazon, Google and Microsoft and needs to be ‘brave and smart’ to succeed. Its approach is different than that of the public cloud providers who essentially rent out access to raw IT infrastructure. Rackspace provides specialised expertise to manage the infra-structure and the complex applications and tools that run on top of it. Unlike simple hosting, cloud service has become so com-plex that users need partners to help them manage products.

Weston, who founded the San Antonio-based firm in 1998, says: “Amid a group of very similar commodity cloud provid-ers, we have built a clear position...as the leader in managed cloud services. We have a differentiated strategy built around our strengths in fanatical Support, hybrid cloud and open technologies.”

The bottomline? A product and platform firm morphing into a niche services or-ganisation and aiming to be one of the best, Rackspace has to build stickiness among its customers and employees into its strate-gic core. Fanatical Support is a key lever in keeping clients from bolting. Support is not about only solving problems but “extends to everything that we do — from providing 99.999% uptime in our datacentres, to help-ing customers architect, deploy, run and adapt their most critical IT environments,” says Weston. It attracts many clients to launch their business with Rackspace, be-cause Rackspace allows them to innovate

and change with them — and stay on.An US-based analyst said in a Gigaom.

com blog that he has seen a Rackspace mar-keter refuse to promote a new service until its support metrics improved. Rackers are also empowered to use their judgment to do what’s best for customers, without asking permission — typical in a tiered call centre — resulting in more agility.

To make it dynamic, Fanatical Support is being expanded to include expertise in areas where today’s customers need help — data services, digital marketing and man-aged virtualisation, says Nigel Brighton,

VP of technology and product. But how does Fanatical Support seep in?

Weston explains “when we decided to build our company around Fanatical Support, not long after Rackspace was founded, we realised that great customer service can’t be commanded. It must be volunteered.”

Rackspace started to build a culture where people would take pride in help-ing customers and enjoy spending time with colleagues. Open and honest discus-sions as well as transparency — employee swipe cards list out their key professional strengths — were core values driving

Rackers to take ownership of the company, its culture and its results.

It hires for attitude and aptitude and then train people for skills - even experienced engineers are drafted in only if they fit into the culture. “We accept a lower percent-age of our applicants than does Harvard University. Every Racker is employed be-cause of the aptitude and temperament and character that he or she contributes to help us achieve our vision.”

Like Melarkode, new recruit Milie Kwan’s first week started with ‘New Racker’ balloon and warm welcome greet-ings followed by training and pressure-free hands-on experiences. No surprises that Rackspace has been consistently featur-ing in the top half of several global great places to work list -- number 29 across US in Fortune’s 100 great places to work, sixth in the UK and twelfth in Hong Kong.

Going the extra mile for both colleagues and customers is paying off. “Our high workplace engagement results in lower em-ployee turnover, ours is among the lowest in the industry. Plus, we believe our culture encourages productivity and innovation.

Those are hard to measure, but we know that Rackers have come up with highly valu-able ways to use technology so that each of them can support more customers. Our ra-tio of Rackers to servers under management continues to fall.”

Rackspace reported net income of $25 mil-lion on a $421-million revenue, or 19 cents per share, for the first quarter of 2014 when Wall Street was looking for earnings of 12 cents per share on a revenue of $419.53 mil-lion. Its server count — a measure of the IT infrastructure it manages — grew to 106,229 from 103,886 servers at the end of Q4 2013 and it landed one of its largest new custom-ers. Revenue guidance for the current quar-ter was quickly upped to $440 million on the higher side.

Rackspace added significant new work-loads for existing customers like Appboy, Clarks Shoes and SunPower. “Each of these customers values our managed cloud ap-proach and chose us over providers of less expensive unmanaged infrastructure,” says Weston.

Customer and employee loyalty and a focus on open and scalable cloud operating system will hold Rackspace steady since it is surrounded by big brothers of technology with deep pockets who have continuously cut prices in the cloud computing market. Rackspace’s specialised servings backed by strong support come at a higher price-point. Naturally, it has faced pressure to follow suit, but has steadfastly refused.

“Technology, open or proprietary, is not the differentiator. The differentiator is peo-ple who use the technology and people who build the technology, “ says a noted enter-prise technology expert who has managed large captives.

The ultimate risk to Rackspace is whether new customers will be willing to pay premiums for open architecture and dedicated service teams rather than enjoy-ing the significant discounts being offered by competitors. Since it has clearly estab-lished a firm foundation with customers, “Rackspace can afford to sidestep around the price wars and emerge in the long-run as a high-quality industry leader,” opines key stock investor Arthur Wang in his personal blog, reprinted in Seeking Alpha. CD

chiranjoy.sen@timesgroup.com

Fanatical SupportHow Rackspace is creating a gold standard in the cloud by Chiranjoy Sen

Of Pledgebooks And Farmstays

A STUDY BY

Corporates are introducing novel programs to make themselves great places to work by Rica Bhattacharyya & Anumeha Chaturvedi

WE ACCEPT A LOWER PERCENTAGE OF OUR

APPLICANTS THAN DOES HARVARD

UNIVERSITY. EVERY RACKER IS

EMPLOYED BECAUSE OF THE APTITUDE

AND TEMPERAMENT AND CHARACTER THAT HE OR SHE

CONTRIBUTES TO HELP US ACHIEVE

OUR VISIONGRAHAM WESTON,

CEO AND CO-FOUNDERRACKSPACE

Godrej Consumer Products: LOUD, a new approach to business school recruiting

Lupin: Learn & Earn employment scheme for underprivileged students in rural areas

Makemytrip:Gamifi cation tech-niques for integrating new hires

Shoppers Stop: A 950 page, 170 kg Pledge Book that travels across the country in a car and has signa-tures and feedback of all employees

Mahindra & Mahindra: Farmstays, where employ-ees live with farmers for 10 days to learn their lifestyle

Vodafone: Interna-tional Safety Rating System to ensure employees drive safe

03 Corporate Dossier July 11-17, 2014

Product: ETNEWMumbaiBS PubDate: 11-07-2014 Zone: CDMumbai Edition: 1 Page: CDMPG3 User: kailashk0106 Time: 07-05-2014 00:52 Color: CMYK

Corporate Dossier July 10-17, 201404

Edit & Desk : Dibeyendu Ganguly, Moinak Mitra, Priyanka Sangani and Vinod Mahanta Design : Shubhra Dey, Sanjeev Raj Jain, Nitin Keer

and finally

:: mario miranda

Term: Dog and pony show

Meaning: An over the top presentation

Bullshit: The usual PowerPoint pres-entation with the usual bullshit

Term: Squaring the circle

Meaning: Trying to do the impossibleBullshit: Sometimes people

use circling the square. Either way, it’s confusing

Term: Holistic

Meaning: Taking in the whole pictureBullshit: Encompassing all aspects

of the project so as to make them more money

Consultants can bullshit with the best of them. Here are some

expressions used by them that are really popularised:

:: coded transmission

Steve Case@SteveCase “The world hates change, yet it is the only thing that has brought progress”

Vinod Khosla @vkhosla Mixed Predictions About Wearables. Mental masturbation by analysts; reality depends on how action-able firms make them

:: twitterama

Rosabeth Moss Kanter @RosabethKanterSurprises are the new normal. Coping with the unexpected is a leadership imperative

Far-out destinations:

New Zealand, with its varied topography .Indian surprise:

Ranthambore Ranthambore National park is a treat for every nature lover Bon Vivant Moment:

Experiencing the snowfall in Gulmarg Outdoorsy Activity:

Paragliding in SwitzerlandEmptied my pockets

Shopping for my family and friends in SwitzerlandPanoramic Views

Staying at Milford Sound in New Zealand and looking at the gorgeous view of the lush rain forests and the frequent visits of seals, penguins, and dolphinsBest Drive

Great Ocean Road, Melbourne Gourmet Gaffes

I had once ordered Pakoras in a restaurant, but was served Fish friesStreet Food Surprises

Chhole Bhature at Amritsar.Best Bar

Orient Express, Taj Palace, New DelhiBazaar Bargains

The Kashmiri carpets and shawl market in Srinagar Traveller Tips

Pack light and carry a hard copy map of the city you’re going to

:: wanderlust:: wanderlust

With wife

Uma in

New Zealand

MK DhanukaManaging Director, Dhanuka Agritech

SOCIAL MEDIA Bloomberg Businessweek

Facebook Growing Up

S Gopalakrishnan giving the keynote address

China Gorman, Global CEO, Great Places to Work Institute predicts sunny skies

Anuvab Pal shares the gujju business mantra

Google Team takes the top honour — again Intel Team close on their heels — yet again Bronze medalist Marriott Hotels fills the stage Amex’s Sanjay Rishi on the winners podium

Most top ten places in last seven years (In no particular order): Representatives from Google, Intel, Marriott Hotel, Amex, NTPC, Godrej Consumer, Classic Stripes, Monsanto, Fedex and Interglobe Enterprises

The corporate happiness index was at an all time high at Four Seasons, Mumbai, as CEOs, HR heads mounted the stage to receive their Best Companies to Work For trophies. Chief guest

R Gopalakrishnan of Tata Sons had some thoughtful observations on the widening generation gap while China Gorman, global CEO of Great Place to Work Institute made the sunny prediction that every organisation in the future will offer their people better lives. The CEOs of Intel, Microsoft, American Express and Ujjivan Financial Services sat down to an intense panel discussion on the role of the human resource department moderated by author-CEO Ravi Subramanian. And there was master of ceremonies, stand-up comedian Anuvab Pal lightening the mood with his jokes. All making for a night to remember...

(L - R) Panel Discussion:Ravi Subramanian

engaged in an intense discussion with

Bhaskar Pramanik, Kumud Srinivasan,

Sanjay Rishi and Samit Ghosh

Vignettes from Best Companies To Work For Study Event

Feb. 4, 2004Thefacebook launches at Harvard

University; Mark Zuckerberg drops out

soon after and moves the operation to

Silicon Valley.Pictured, Zuckerberg

and co-founder Dustin Moskovitz

in Palo Alto, 2004.

November, 2005Zuckerberg shows his business card to a

Fortune reporter.

September 6, 2006Facebook adds a News Feed that shows a

stream of posts from a person’s entire

network of friends. A privacy debacle

ensues, and Zuckerberg apologizes with a

blog post titled “Calm down. Breathe. We

hear you.” He doesn’t retreat from his

plans, and News Feed becomes the

lifeblood of the service.

March 4, 2008Facebook announces that it has hired

Sheryl Sandberg from Google to be its chief

operating officer. Her mission: build a more

mature business and add credibility to the

company.

June 2, 2010Zuckerberg is grilled about privacy onstage

at the D8 tech conference. He sweats so

profusely that he has to take off his

hoodie—on the inside of which is a large

illuminati-like symbol meant to depict

Facebook’s strategy for connecting the

world. “Oh my God, you’re in a cult!”

interviewer Kara Swisher jokes.

July, 2011Facebook moves into its new home, the

former campus of Sun Microsystems.

April, 2012Facebook snaps up Instagram, a five-

employee startup and maker of the hugely

popular photo-sharing app. The acquisition

sets the stage for a strategic shift away

from Zuckerberg’s long-standing one-

social-network-fits-all approach.

May 2012 —

December 2013Mobile transition. Facebook’s IPO reveals a

serious flaw: The company wasn’t earning

any money on smartphone apps. Despite a

late start, Facebook improves its mobile

apps and develops a significant online ad

business over the ensuing year. Mobile is

now Facebook’s biggest source of revenue.

Racing to $150 Billion

Fewer than 30 companies

have reached a market cap

of $150 billion. Using the

IPO date as the starting

point, Facebook is on track

to do it the fastest.

PH

OTO

GR

AP

HS:

BH

AR

AT

CHA

ND

A

BEST COMPANIES TO WORK FOR HALL OF FAME

AN

IRB

AN

BO

RA

Regn. No. MAHENG/2002/6295 Volume 13 Issue No. 24“Published for the proprietors, Bennett Coleman & Co. Ltd. by R. Krishnamurthyat The Times Of India Building, Dr. D.N.Road, Mumbai 400001 Tel. (022) 6635 3535, 2273 3535, Fax-(022) 2273 1144 and printed by him at The Times of India Suburban Press, AkurliRoad, Western Express Highway, Kandivli (E), Mumbai 400101. Tel No: (022) 28872324, 28872930, Fax No (022) 28874230 Navi Mumbai - 400708 and Plot No 4, MIDC, Digha Village, Thane Belapur Road, Airoli Tel. (022) 27609700

and Editor: Vinod Mahanta, (Responsible for the selection of news under PRB Act).© All rights reserved. Reproduction in whole or in part without the written permission of the Publisher is prohibited.”

04 Corporate Dossier July 11-17, 2014

Product: ETNEWMumbaiBS PubDate: 11-07-2014 Zone: CDMumbai Edition: 1 Page: CDMBP User: kailashk0106 Time: 07-05-2014 01:00 Color: CMYK