The Mahindra way to building leadership

Rajeev Dubey’s passion for people quickly comes to the fore as we sit down for a meeting at his 5th floor office in Mahindra Towers. This along with a genuine belief that a person’s full potential can be unleashed in the right work environment is the quality he brings to the table, says the president (human resources & corporate services) of Mahindra & Mahindra.

Dubey has a tough job up his sleeve. M&M is on a frenetic growth path, where the group’s gross revenues and other income rose 40 percent to Rs 19,437 crore in the fiscal ending March 2007. At the same time, mergers and acquisitions both in the country and overseas have become an integral part of the M&M growth strategy. At the centre of all this expansion is the imperative need to find the right people.

Sources in the industry say M&M’s attrition rate stands at 15 percent although Dubey puts the figure slightly lower. “Our attrition rate at roughly 13 percent is neither higher nor lower than the industry. We would like to improve upon this and we are taking all kinds of measures to retain people. The whole question of attracting, developing and retaining talent takes up a lot of senior leadership and senior management time.”

Analysing this, M&M has discovered that attrition is generally higher at two places. The first is with people who have worked between two and five years, and the other with those who have put in 10-12 years of service. “Attrition is not entirely bad because it brings in a fresh wave of energy and new ideas (through new recruits) to the organisation. This also improves the level of innovation. It is a question of having the optimum balance,” Dubey reasons.

TALENT NOT AN ISSUE

Being one of the biggest conglomerates in the country, M&M does not have a huge problem finding talent. It also helps since the group operates in many different verticals at various countries. Add to this the fact that it seeks to give employees a deep sense of empowerment along with a lot of challenge and excitement through the nature of various assignments. And the package becomes rather attractive for job seekers.

Needless to say, training and motivation programmes play an important role in grooming employees. M&M begins this process with identifying its strategic goals to be achieved at various levels and points in time from the context of delivering business results. An assessment and mapping of its internal skills and competencies then takes place. Once this is done, the gap between the required skills and competencies available is bridged through training and employee assignments.

##### SHADOW BOARDS

The group believes that formal training be it technical, functional or behavioral programs make up only 15 percent of the equation needed to train people. The majority, and hence the emphasis, comes from assignments which at M&M include setting up cross-functional teams and a unique practice dubbed ‘Shadow Boards’. The idea of having Shadow Boards was first mooted by M&M vice-chairman and managing director Anand Mahindra at a meeting of senior executives in 2003.

M&M’s Shadow Boards consist of young executives whose mandate is to discuss and give recommendations on major strategic and operational issues. The gain to M&M here is that it allows for out-of-box views of Generation Next, challenges existing viewpoints and offers new insights. This is not all. Bodhi Vriksha, which houses the Mahindra Management Development Centre and the Mahindra Institute of Quality, plays a vital role in preparing young executives for leadership positions as well. Commissioned in April 2005, it covers four acres and is located at Gangapur, a mere 7 km from the heart of Nashik.

Up until now, more that 4,500 executives have been trained there. The group also provides High Value Leadership Lifecycle programmes to develop leaders out of its managers at key transition points. A number of programmes are also available at the corporate level. Two such warrant mention here: the global managers and customer-centric corporation programmes. While the first provides an understanding and insight into the nuances of international trade and cross-cultural sensitivity, the latter plays a role in knowing consumer preferences, perception and behavior. Across the board, training on average takes up four man-days per person per year.

Moreover, tapping Ivy League colleges for a vibrant talent pool has become an annual affair for the M&M group. More recently, Anand Mahindra led the management board and a dozen senior managers on a three-day session at Harvard Business School. Selecting talented young graduates from the campuses of Yale, Harvard, Princeton, University of Pennsylvania, Tufts, Wharton or London Business School is also common practice.

HUGE IMPLICATIONS

Why so much stress on leadership positions? “The cost of making a wrong choice or judgment is much higher while recruiting people at the senior level. The consequences could be larger if at the leadership level there is disconnect between the fundamental culture of the group and the values the individual brings in,” Dubey says. Finding the right people at the middle management or the worker level is not any easier, he adds though. Contrary to common belief, attrition at the worker level is not as high as in the manager and officer category. Even as M&M sets up new facilities, it is finding workers from those localities. The group also recruits and trains its workers much before the facility actually becomes operational. And so production very much begins at the time the plant is commissioned.

##### The other topic that takes up a major part of Dubey’s personal agenda is the issue of integration when it comes to the group’s mergers and acquisitions policy. More recently, M&M’s Farm Equipment Sector bought out Punjab Tractors while there is also market talk on the group’s interest to acquire Hyderabad-based Lokesh Machines. M&M is tipped to be a possible bidder for Jaguar and Land Rover.

INTEGRATION PLAN

In explaining the role of human resources when the group makes acquisitions, Dubey says it can act as a catalyst and facilitator in the group’s integration process. There is a fairly detailed integration plan, which embraces integration across functions and geographies along with integrating people and cultures, he quickly adds. There are of course challenges. Dubey points out three dimensions.

The first, he says, is to be clear on the merged entity’s business deliverables. Once these metrics have been decided upon, a detailed functional integration plan with a timeline has to be put in place. It also means that milestones have to be set, a calendar adhered to and a thorough review conducted of the performance. The second dimension, and a very important one, is building trust with the acquired company. Naturally, the management and workers of the bought out unit would be jittery about the new owners. Lastly, an understanding has to be reached on the culture of the merged unit. Building credibility, through extensive lines of communication, is extremely important in the integration process.

“In order to build trust, you have to create credibility and walk the talk. It is very important that we say what we mean and do what we say. There is no other way to create trust – and this can only happen over time,” Dubey says. “Over the years, M&M has built trust. In the case of our new units, it is dependent on how we deal with them in terms of our openness, transparency, empowerment and willingness to communicate,” he adds.

Apart from gaining access to new markets and technologies, M&As also enrich the overall talent pool. For instance, the group has 5,500 people working overseas of which 2,600 are not Indian nationals. Conversely, there are also overseas nationals working in India. The group is increasingly finding a lot of younger people in its workforce. "Clearly a change is taking place in the age profile and hopefully there will also be a change in the gender profile. These factors pose their own set of challenges, and we have to be very careful to understand what drives these people.

HIGHEST POTENTIAL

“We have to make sure we keep adjusting our own HR policies and processes to create conditions where we get maximum sustained productivity and unleash the highest potential to retain such people,” Dubey observes. In some group companies (like Mahindra Financial Services, Mahindra Insurance Brokers, Tech Mahindra or Club Mahindra), employees are overwhelmingly young and the average age would be around 25-26 years. As for the auto sector, about 50-60 percent of the workforce would be in the below-30 age group.

Dubey also says that the group would like to hire more women. “We need to have a profile of the workforce that somewhat matches the profile of the customer base. We see the important role women play as customers,” he explains.