Reliance: In a search of a few good men

MANOJ MODI WAS INSTRUMENTAL in turning Mukesh Ambani’s unfulfilled telecom dream into reality. That Modi was aided by a group of youngsters, who continue to work behind the scenes to launch Reliance Infotel Broadband’s 4G services before FY12 ends, isn’t common knowledge though.

A little over a year ago, Anindya Sundar Ghosh (30), Pramod Yadav (32), and Sameer Mehta (31), had no idea that they would be part of the most prestigious Reliance project in recent times. Ghosh, who has a consultancy background with KPMG, is responsible for setting up and running the security centre, and getting the Infotel business operational. Yadav is working with Modi on identifying and evaluating techno-commercial parameters, and finalising around 90 vendors who will be suppliers. Mehta, on the other hand, is working on the design and execution of products and applications that will run on the new network.

The trio were among the first batch of the Reliance Accelerated Leadership Programme (RALP), designed to create a pool of executives ready to take up any role at short notice in any of the group businesses. “RALP is about giving the right opportunity to complement the hunger and intellect of the youth,” says Hitel R. Meswani, executive director and Reliance board member. “While age needs to be respected, competence needs to be saluted. Youngsters today are smarter than we were at their age, and we need to get these ‘raw materials and ingredients’ and mould them to suit our needs.”

RALP was part of a business transformation programme done by consultancy McKinsey for Reliance in 2010-11. Given Reliance’s diverse business portfolio and its spread of operations across 23 countries, the attempt was to get a more process- and system-driven work culture like multinationals, with executives having specific responsibilities.
RALP is about identifying talent, handholding them as they learn the Reliance way of working, empowering them, and giving them the opportunity to build a new Reliance, says Vivek Paranjpe, advisor to the chairman, strategic human resources and business transformation, Reliance. He says, given the phenomenal growth in the last 35 years, and the kind of vision Ambani has, “it would be scary if we are not prepared with the right leaders”.

Traditionally Reliance’s cadre has comprised home grown managers or former public sector employees. In recent years, it has tried hiring senior executives for its telecom and retail businesses, but has been unable to retain many of them.

Reliance Retail, for example, suffered setbacks with senior managers exiting at regular intervals. From the original team hired by then CEO Raghu Pillai in 2006, only Bijou Kurien, currently president and CEO (lifestyle, Reliance Retail), who moved from Titan Industries, and Bijay Sahoo, currently with the HR team, who came from Wipro Technologies, remain. Rajeev Karwal, the ex-CEO of Electrolux India and former marketing head of LG, quit within nine months of joining. Pillai exited in 2010. Even today the Tesco Thailand team under Gwyn Sundhagul, who was brought in to restructure Reliance Retail’s business, is believed to have fallen short of the mandate and have been moved to different roles within group companies. But equally, its experiment with hiring Tony Fountain, Reliance’s British-born chief executive of refining and marketing seems to be working fine so far. Either way, creating a programme that’ll help ease in new talent seems logical.

Other big Indian firms also have management training programmes. The Tata Group has Tata Administrative Services, GE India has a talent development and succession mentoring programme, and most companies have management trainee programmes. Reliance too has its own training and executive education programmes, but RALP is special.

For a start, it has direct access to the top, right up to chairman and managing director Ambani. Then, RALP hires laterals and not against any vacancy.

“Research shows that most of the lateral hires leave within a year. Issues of cultural fit, on-boarding and acceptability are the main reasons for this,” says Mohinish Sinha, leadership and talent practice leader, Hay Group SAPA (South and Southeast Asia, Pacific, and Africa). “But Reliance wants to break this mould, and is experimenting with the idea that if they have spent some time within the company these issues would not be there. They are hiring talent from different sectors as they want them to think out of the box.”

India does not boast of too many managers who can think innovatively to resolve a problem, and if RALP succeeds, the concept might be replicated by others.

“RALP is a hallmark project reflective of Ambani’s far-reaching people vision, effectively leveraging Reliance’s DNA, and its ability to define new frontiers,” says N.S. Rajan, partner and global leader—people and organisation at consultancy Ernst & Young. “The initiative is a blend of institutionalisation and sustainable leadership development, with unusual infusion at the middle of the pyramid, to keep pace with Reliance’s enviable growth aspirations.”

Today, people-related decisions have become more strategic in nature. They are no longer tactical or just about process infusion. Earlier, companies thought not getting the right managers or talent was a recruitment problem. “Moving people from one industry to another was not solving the problem,” says Sinha. “They realised that they have to invest better in the development of people, and this has become very important today.”

GHOSH, YADAV, AND MEHTA, along with 29 others, were recruited from a shortlist of 1,200. (That’s a 2.6% success rate). They all had an experience of five years to seven years across HR, finance, procurement and contract (P&C), and IT. This year, the intake is likely to rise to 50 with an increase in the number of functions. The number of applicants has gone up as well, but figures couldn’t be shared since the company was in the middle of its evaluation process.

There are two preconditions to recruitment: candidates have to be between 30 years and 34 years, they should not be freshers, and should possess more than four years of experience.

Making the cut for the two-year programme entails at least six rounds. The tests comprise multiple rounds of written examination, interviews, psychometric analysis, group discussion, etc., conducted by B-school professors, analysts, and executives from other Indian and foreign companies, as well as consultants.

For the RALP batch recruited every year, long hours are a given, as is the tremendous rigour and discipline. The programme is a combination of classroom and live projects: fixed roles come after two years. The live projects (such as the new Jamnagar plant, or the 4G services rollout) are reviewed and approved by Ambani and his executive council, the highest decision-making body within Reliance. The non-live projects (dummy projects) are reviewed by experts and consultants from McKinsey and elsewhere. The different evaluation matrices include entrepreneurial mindset, behavioural aptitude, critical thinking, problem solving, managing ambiguities, etc.

The challenges are not the usual B-school case studies, and better still, the recruits are paid while training. RALP has partners, such as Harvard Business Publishing, Pearson and Development Dimensions International, which are involved in creating the entire programme and are there to help the candidates with reading and reference material.

Instead of waiting for its managers to grow at their own pace and develop an understanding of the company, the RALP candidates are put on steroids for the two-year programme divided into four half-yearly rotational assignments. Other companies don’t usually assign live projects as part of their rotational assignments. The rotations are every six months and they have to be completed within that period. The projects get monitored by the mentor and an executive council member, but they are real, with actual money and outcomes involved. The dummy projects, on the other hand, if found to be impressive, can be implemented.

For example, Pravir Shah, 32, who had earlier worked on a KG basin P&C project and executed procurement orders worth $100 million (Rs 535.4 crore), has moved to the Jamnagar expansion project. He is involved with a team procuring steel, and reports to Meswani. If approved, Shah’s evaluation and suggestion to buy equipment from China and Russia would result in savings of 30% on purchases of $200 million.

Again, Vishal Katkoria, a 32-year-old investment banker, has already done a project on creating and documenting governance-related processes and systems as part of Reliance’s finance team. He is now working with the treasury team and D.E. Shaw group, a financial services company, on a business plan. Another RALP graduate, Rajbir Saini, 33, is building the HR framework for cadre building and succession planning within Reliance’s, and is also anchoring the creation of an HR academy within the company.

Through all this, these folks have access to Ambani, indeed more than others at the same level. They can write directly to him, have exclusive access to his meetings, and even seek personal time. “We could never imagine working on this scale on high-impact projects and having access to top leaders of such a big company on a regular basis,” says Nilesh Mahajan, 33, who has a team of 80 people working for him to create a central repository of 5,000 business processes which can be accessed anytime for reference and replication.

The learning is on the job. The attrition rate at Reliance today is below 8%. (In manufacturing, the average attrition is around 6%, but given the size of Reliance, consultants say 8% is a good figure.) Three from the 2010-11 batch left within six months. But, since the recruitments were not against any vacancy, there was no need to fill the slots.

A BEHEMOTH LIKE Reliance needs different talents and expertise to move forward, and has no option but to parachute in managers from outside. The management is also aware that in the petrochemical business there are no big engineering projects on the drawing board currently. The telecom projects are also nearing completion. Here on, the focus shifts to maximising profits, revenue, and consolidating customers. And that will not just require engineering hires, but also more customer-facing business executives. “A future Reliance leader has to have a global mindset and should understand different work cultures as well as changing global economic and political dynamics. He should also be tech savvy and have the ability to work with multiple partners. This is what RALP is trying to create,” says Alok Agarwal, chief financial officer, Reliance.

Tony Fountain says if the company has to double its operating profit in the next five years, refining and marketing need to grow by 40% every year. “We need more leaders who can fill the gaps and reliably execute projects such as adding capacities, expanding retail presence, and handling back-end work. The chairman was too engrossed in growing the business, executing projects, and running plants. Now he is seriously looking at creating a leadership pipeline.”

RALP does not create a cadre of exclusive managers. Their compensations aren’t different from the others. “They enjoy tremendous bonhomie. There is a lot of pride as well, because these guys have emerged through a very competitive process,” says Darius Gandhi, group HR of Reliance. He adds that at the end of two years of RALP, they should be able to get a manager, who previously had no idea about Reliance, “to mentally and physically be ready for the big leap”.