ONE THING IS CLEAR. Whether it’s Vyasa’s opus, or the story of the people who stood on the ramparts of Red Fort one midnight a little over 65 years ago, or of the lot that made history at Lord’s three decades ago, they are all parables in teamwork. The cast of characters varied from mythological warriors endowed with superhuman abilities to ordinary men fired by the extraordinary idea of freeing a nation to an amalgam of sportsmen who delivered when it mattered most. Yet, the roles stayed unchanged—the leader, the deputy, the strategist, the aggressor, the go-to man, and the like. Indian history and mythology isn’t replete with stories of teams at play, but wherever they have come together, the results have been impressive.
It’s a similar narrative in business. Indians find it difficult to work in teams, but make history when they do. Though Infosys badly needs new ideas today, it continues to be the most magnificent example of teamwork where seven techies came together to build a world-class company and became legends in their lifetime. As Vijay Govindarajan, professor of international business at Dartmouth’s Tuck School of Business, says Indians are very good technically but lack softer skills such as leadership and team building. He calls this the “last-mile deficit”, which comes in the way of building great companies.
The need to slay the last-mile demon has never been greater. As Indian CEOs increasingly create larger and more complex organisations, their success lies in the people who run them. As Infosys co-founder and executive co-chairman S. Gopalakrishnan puts it, a great team “is the only thing that stands between success and failure”. But that is neither fully understood nor implemented. HCL Technologies vice chairman and CEO Vineet Nayar believes that in India, “leaders are over-rated and teams under-rated”.
So how are great teams built? Fortune India spoke to some of the biggest names in business, past and present, for a hands-on understanding of what it takes to build, manage, and retain teams in today’s environment. It’s a bit of an arcane science and master practitioners all have their individual playbooks, though instinct always makes for a good start. ICICI Bank’s former chairman Narayanan Vaghul talks about the chairman of the recruitment board at the State Bank of India when he was there in the ’60s as human resources head. A retired member of the Indian Civil Service, K.S.V. Raman, had an “uncanny ability to identify the right people”, says Vaghul. He once asked Raman if he followed any technique: Raman said no, it just came from years of interacting with people. Raman would sometimes call professors to the interview panel. He told Vaghul that he relied on their judgement because, after interacting with thousands of students, they’d have a knack for distinguishing the good from the average. For his part, Vaghul says, within six months of joining ICICI, he knew K.V. Kamath “would be his successor”.
Rana Kapoor, founder, managing director and CEO of Yes Bank, says it was sheer guts when he decided to launch his bank in 2004 when a slew of private banks were already in the market. He had to attract talent from established banks for his team. “I had to sell ice-cream to Eskimos,” says Kapoor. Now, he is looking beyond banking professionals to strengthen his team. For example, he is hiring ex-defence officers for their strengths in administration, discipline, eye for detail, and strong execution capabilities.
Beyond instinct, there are different approaches to putting teams together, though in startups, familiarity wins hands down. That’s to do with the associated high risks. Online retailer Snapdeal’s co-founder and CEO Kunal Bahl says in the early days, he found it so difficult to hire that he employed a posse of cousins to headhunt whoever they knew. Infosys’s co-founder and chairman emeritus N.R. Narayana Murthy says the reason for the company’s success has much to do with the background of its founders—all middle class, South Indian boys. Gopalakrishnan says the team gelled so well that while failures were discussed, they were never held against anyone. He recounts how a project he was put in charge of—Infosys Digital Systems, to make hardware—spectacularly bombed and he wasn’t once made to feel small. “There was a lot of mutual respect,” he says. His other tip on building successful teams in startups: making sure spouses get along well.
BUT AS ORGANISATIONS MATURE, putting together teams gets infinitely more complex since leaders now have something they lacked earlier: choice. And in an era of increased volatility, most CEOs are increasingly coming around to the view that down-to-earth managers work best. Anil Gupta, who along with his father has built Havells into one of India’s most successful electronic equipment makers, says highfliers leave him cold. In the early 2000s, when Havells began adding big manufacturing capacities and started looking around for overseas acquisitions, it hired several highfliers. “But they didn’t last very long. They were short term in their outlook and couldn’t adapt to the ways of a medium-sized, though rapidly growing, company,” says Gupta. While highflying is really a state of mind, it’s usually associated with education (Ivy League or some of the best Indian B-schools) and previous work experience (multinationals). Gupta prefers recruiting new hires from tier II colleges; for laterals, he goes for people who haven’t yet built their résumés. On the odd occasion he recruits highfliers, he makes sure they understand early on what Havells is all about. Gupta avoids one-on-one interactions and typically puts the highfliers in large meetings where he encourages everyone to speak so that the recruits realise “they are not the only repositories of wisdom”.
Apollo Tyres chairman and MD Onkar Singh Kanwar echoes this. When he was rejigging the management in the Kerala factory, he stayed away from IIM graduates because “they are not grounded and are highly ambitious. Instead, I hired people from middle-class families and second-rung schools, as they were looking for job stability rather than money.”
Some of this is peculiar to India’s environment of promoter-driven companies. D. Shivakumar, senior vice president, (India, Middle East, Asia), Nokia, says in India the commitment and respect for the entrepreneur leader, who has invested his own money in the company, is higher than for a hired professional who is seen as an employee like any other.
For every Gupta or Kanwar, there are those who argue that Indian promoters should hire more successful people from large companies if they are to take their organisations to the next level. Gupta concedes that they may have a point and agrees that often the talent in “big multinationals is terrific”. But, he argues, conflicts arise because “promoters always think long term, whereas managers think short term”.
One way of getting around that is to assemble the right team for the right task. Good managers are like athletes who train for a specific event. Use a sprinter in a marathon, and it’ll be a disaster. Blackstone India’s senior MD and chairman Akhil Gupta, who was earlier with Reliance Industries, says one of the most insightful ways to think about teams is what Mukesh Ambani used to tell him: Define jobs as a series of tasks and for each task let there be a team; once the task is done, dismantle the team. “That way you keep teams dynamic and there is no bureaucracy,” says Gupta. What he (or Ambani) is really saying is that teams are contextual and work only in a particular setting. So, know when and how to build a team and more important, know when to break it up, or allow it to come apart. To wit: When Chanda Kochhar took over from Kamath, there were a few important exits at the top. That’s perhaps the best thing to have happened to ICICI Bank because under newer circumstances, the old team might not have delivered. The bottom line: Team longevity is overrated.
It may even be damaging. One of the big conversations in India Inc. is what happened to Infosys. Once the poster-boy of India and Indian IT, it is now a company in need of reinvention. There are various reasons attributed to its current state—changing market, recession, hungrier competitors, being too conservative, etc. But the one that generates the most amount of debate is whether the practice of allowing each of the founders to take a shot at running the company is the culprit. (S.D. Shibulal, now running the show, is the last in line.) Has the once vaunted team now outlived its purpose? Or, given that it is no longer a team, does it no longer work? Gopalakrishnan says the situation is too complex for easy fixes or interpretation. But the questions don’t abate.
Cognizant Technology Solutions’ vice chairman Lakshmi Narayanan believes people need to move on. While Infosys has a pre-scripted succession planning, Cognizant has promoted people from its ranks based on their merit. “Leaders within Cognizant have reinvented themselves in an uncertain environment and those who did not have left the organisation. We have been ruthless in creating the kind of team we wanted,” says Narayanan. Cognizant is working on a programme called Horizon 3, which focusses on identifying new delivery models, target industries, markets, and technology architecture. This programme is led by CEO Francisco D’Souza himself. “He has moved on to reinvent himself and handed over his previous roles to new leaders. This is how we take a bet on the future. We call this empowerment. If we fail, there is a risk of losing our reputation. But this helps in building a pipeline of leaders. Also, we avoid being blinded by competition as these new bets will keep us ahead of the curve,” says Narayanan.
SANTRUPT MISRA, THE HEAD OF HUMAN RESOURCES at the $40 billion (Rs 2.09 lakh crore) Aditya Birla Group, says it’s not just important to know how to build teams, but also when they coalesce best. “Teams become successful where there is a sense of purpose and a distinctive goal. They sometimes become cohesive when there is a crisis, but they may not become cohesive just because there is a crisis. Members must have the maturity to connect with a goal and understand the situation.” Along with chairman Kumar Mangalam Birla, he has put together a stellar cast of individuals who have started new businesses, bought out multinationals, turned them around, and exited companies such as Mangalore Refinery and Petrochemicals, Applause Entertainment, and Zuari Cement. In the 16 years since he joined, shortly after Birla took over, the group’s revenues have risen around 27 times.
You could argue that Birla personally had a point or two to prove as well (his “purpose”). He was put in charge after his father’s untimely death, a young inheritor of a storied legacy. Birla’s genius lay in the men he picked. They were managers who were much older than him and, therefore, had more experience. The two names that epitomised this were Debu Bhattacharya and Saurabh Misra. Bhattacharya was a director with Hindustan Unilever (Hindustan Lever then) and Misra was deputy chairman, ITC. Both were peaking in their careers and had even been candidates to head their respective companies. Birla scalped them within an interval of six months (Bhattacharya came first), created meaty roles for both, which he kept expanding, and gave them a free hand to function. As the stories of their success in the group began spreading, the Birla companies became a magnet for talent.
THE LAST DECADE OR SO HAS created the perfect conditions to build and test teams. Though the early years after de-licensing caused anxiety among companies about competitiveness (and weaker ones perished), growth somewhat compensated for that. But that soon changed. “It was a strange situation. Till the 2000s, Indian management teams had not dealt with business conditions triggered by a global downturn. They had just seen growth, and teams lacked the maturity to handle such situations,” says Venkatesh Valluri, chairman and president, Ingersoll Rand India, who was previously at General Electric.
One of the squads that battled a crisis brought upon by global volatility was at Tata Motors’ commercial business in the late 1990s. Led by Ravi Kant, the team included Praveen Kadle (the finance man), Prakash Telang (product development and operations), Shyam Mani (sales and marketing) and K.C. Girotra (business excellence). In 2000-01, Tata Motors posted its biggest ever loss of Rs 500 crore. The stock tanked and Ratan Tata’s standing was at stake. Kant had recently joined from LML Motors, makers of scooters, and was his responsibility to revive the business. Kadle was thrown in to rework Tata Motors’ working capital; Mani worked with dealers; while Telang and Girotra improved manufacturing and supply-side efficiencies. Since then, cost efficiencies have been built into the system, and global and online sourcing have become the norm. They also unveiled a strategy to strengthen the company’s commercial vehicle (CV) offerings and avoid being caught in the cyclical nature of the business. Small CVs such as the Ace were part of this. Entering markets similar to India and the acquisition of Daewoo Trucks and Jaguar Land Rover was again part of the decision to take the company global and reduce dependence on a single market. All these moves have worked for Tata Motors.
In a few years, Kant became Tata Motors’ vice chairman and CEO, and today he continues as vice chairman. Telang got a shot at running Tata Motors’ Indian operations for three years before he retired this year. Kadle went on to start Tata Capital and is today its MD, Mani became the MD of Tata Motors Finance while Girotra was elevated to vice-president before he quit to start his own company.
But crises aren’t always market-led. HCL’s Nayar says smart companies frequently “manufacture crises and don’t necessarily wait for an external one” to test their teams. “That’s how you constantly raise the bar.” He points to a recent conversation he had with Renault-Nissan’s Carlos Ghosn where the auto-man spoke of his push into electric vehicles with Renault. Nayar argues that electric vehicles are still some time away, but Ghosn is already creating a situation where the company is internally preparing for it. Ashok Soota, founder of Mindtree and Happiest Minds and former vice chairman at Wipro, calls this creating a sense of “paranoia”, borrowing Intel co-founder Andy Grove’s famous phrase. He says at Wipro, each year some small change would be introduced and every three years, a big change, “like moving to splitting the market by industries than geographies”.
IF CHALLANGES BUILD TEAMS, bureaucracy kills them. When Maruti Suzuki had just been formed, it couldn’t afford to hire from the private sector, so most of its early recruits came from public sector companies, particularly BHEL. But Maruti had to create an environment in which the team could coalesce, says R.C. Bhargava, its chairman. His point is that it’s not enough just to hire good people and expect them to deliver: It’s equally important to define the norms of their behaviour. Knowing how rigid hierarchies and bureaucracy killed teamwork at public sector units, Bhargava wanted to create an “egalitarian workplace”. He insisted on punctuality across levels, weekly meetings, a commitment to meeting targets, and, ultimately, even a common lunch room. At every meeting, he emphasised that Maruti couldn’t take its monopoly for granted. “The challenge was to create a culture that was very different from public sector companies,” says Bhargava.
When Tata picked up government-owned Videsh Sanchar Nigam (now Tata Communications) in 2002, they figured it could be their launch pad into telecom. The only trouble was that Tata Communications was bleeding because its existing teams, used to monopolies, couldn’t adjust to market forces. Srinivasa Addepalli, the company’s chief strategy officer, says it first re-skilled these managers at the Tata Management Training Centre in Pune and then re-assigned them. “We thought new assignments would allow people to re-group as a team, and deliver better,” says Addepalli. So for example, Arun Gupta, who was earlier heading finance, was given the voice business in India. Today, Tata Communications has one of the most global management teams among Indian companies.
Over the next few pages, with the help of Deloitte Consulting and the Hay Group, we’ve put together the four stages organisations go through and the specific skills required to build successful teams at each. Also, after talking to innumerable executives, headhunters, consultants, and so on, we have put together a dream team at each stage, if only to consider the possibilities. A few criteria were kept in mind while creating the fantasy lineup: the CEOs are all under 60; they are recognised builders, selected for how they work and what they’ve achieved. And positions have been filled not on the basis of the current designations, roles or size of enterprise, but the philosophy or thinking that represents the executive.
With inputs from Mansi Kapur