CREATING TOMORROW'S STARS
Robin Cherian only had a broad idea of the role he would be playing when he agreed to join Reliance Industries some time ago. As a procurement expert, his world was one of buying raw materials, equipment from the cheapest sources available in the world. Costs, location, transportation, logistics were what he was involved in. When he was told by the Reliance managers that he would be part of a training programme which would rotate him within some of the company's key functions, he did not see it as something alien to his area of interest. Rather, it was a way to do something for his new employer.
He knew Reliance was one of the biggest buyers of raw materials and project equipment. As it expanded into new areas like telecom and retail, procurement would become all the more important.
He quickly devised a pilot project, a model programme, which, according to him, would help the company cut costs and get better prices. He wrote it out and sent it to Mukesh Ambani, the chairman. The answer was quick. The project was accepted and he was made in-charge of its implementation. Cherian is not the first executive to have found so much freedom within Reliance nor would he be the last. And the interesting aspect of the whole story is perhaps not the individual but the process in which he is involved.
Reliance Accelerated Leadership Programme (RALP), a programme conceived and conceptualised by the RIL management, is developing a new breed of executives for top leadership roles within the organisation. It is an initiative aimed at attracting and training middle-level managers from outside, and helping them become tomorrow's leaders.
Not many people know that some of Reliance's biggest challenges have always revolved around human resources. In the first ten years after 1991, when it was hungry for growth and eager to take advantage of liberalisation's promises, the most pressing concern for the company and its investors was project implementation. It is not easy to build one of the world's largest refineries, or a mega petrochemical complex, or plumb the ocean's darkest depths in search of oil and gas without talent.
Reliance's success in achieving all this is always attributed to its fund-raising prowess and its ability to bargain and get the best price possible. RIL has an Ability to Attract Best Talent
Less well known is its ability to attract the best talent from the industry and the government and weld them into a fighting, successful unit capable of pulling off near-impossible feats. The HR success is a story that has remained untold even as the company and its investors have reaped the benefits.In 2012, as Reliance grapples with a slowdown in key businesses and concerns over whether it has unfairly secured government favours, and as it prepares to expand its bouquet to include new areas like broadband connectivity andmedia, and push forward in retail, human resources is once again at the forefront. This time though, the challenges are very different. Most of the giant projects have been completed. No massive new refinery or petrochemical complex is on the horizon and most of the ongoing ones don't really need new talent.
What Reliance does need is something else. A reservoir of new leaders, ready to take over key roles at any time in future across various departments, functions and categories, and an institutionalised system which identifies, trains and prepares people for the bigger roles. This is where RALP comes in. "The company's growth phase is so huge, the diversification projects so big that there is a need to beef up the middle management," says Vivek Paranjpe, advisor to the chairman, strategic HR and business transformation.
In size and scale, the programme may seem small. Unlike other Reliance operations where the numbers tend to be large, RALP is a focused and intense leadership course where a select group of recruits are put through all the departments of the company and made to learn the ropes and gain experience. The ultimate objective is to hone leadership skills and make people take charge of key roles in various departments and functions.
The programme's first phase began last year and will last for two years. About 32 executives are a part of the first phase but this number will change depending upon the needs of the organisation. They are selected after careful vetting and then assigned to different roles within the organisation under the mentorship of a senior executive. Their progress is monitored on a regular basis and they are assigned to a particular function once the training programme is completed.
"We wanted people with passion, hunger. Many of these roles are highly complex and large, and provide an ideal training ground for leadership aspirants," says V Srikanth, joint chief financial officer of Reliance Industries, who is a mentor to a group of RALP executives.
In his role, Srikanth knows the critical value of leadership. Many executives in the finance functions spend time managing cash flows, budgeting and expenditure programmes of large divisions, some with an EBITDA of more than Rs 10,000 crore. On top of that, the company is spending money in rolling out a 4G network across the country and opening new shops under Reliance Retail.
All these positions and posts need years of careful training and an understanding of the inner workings and processes. Without a robust internal system and process, selection of candidates to man these crucial positions will be difficult and probably time consuming.
"We have also tried to inculcate in these candidates a not-so-regimented, not-so-strait-jacketed style of thinking because especially in finance, there are various dimensions to the role," Srikanth adds.
The RALP candidates are not college or IIM graduates. They are successful middle management professionals possessing a wealth of experience and knowledge. The programme is also different from the normal campus recruitment that happens every year.
RALP, according to Paranjpe, is a formal institutional structure which allows leaders to emerge from within the organisation and take charge of important positions. And training for this is crucial. "A transplanted organ has to be integral to the body. Otherwise, the body will reject it," Paranjpe added.
In the Reliance of yore, before the division between the brothers in 2005, a top-level team comprising founder chairman Dhirubhai and his two sons, Anil and Mukesh, along with some senior executives were responsible for hiring senior talented executives for leadership roles.
But some time in the last few years, Reliance realised that this would not be enough. Many of the recruits were raw and though they would gain experience, there was no formal process to identify suitable candidates for the upper echelons of leadership. There was also the question of sufficient acclimatisation to the Reliance way of thinking, solving problems and doing business. Reliance is also expanding in new fields that are outside the core areas in which the company has always operated — petrochemicals, and oil and gas. By the end of this year, it plans to launch 4G broaband services across the country, putting it directly in touch with millions of consumers, for the first time since the undivided company launched mobile phone services in 2002. Retail is still not a fully profitable business but the company is expanding and would like to scale it up. Reliance is also keen on expanding in financial services for which it has formed a partnership with DE Shaw. All this calls for diverse talent from various sectors. The old boys' network, with its excellent contacts within government and PSUs, will no longer suffice. New recruits, especially from the services industry will play a far more prominent role in Reliance's future and a formal process of induction, training and mentoring is a must for developing a reservoir of talent.
Thirdly and more importantly, leadership in Reliance has a different meaning and connotation than in other companies. With annual turnover well past Rs 4 lakh crore and net profit likely to hover above Rs 35,000 crore by the end of this year, Reliance has the luxury of having several individual businesses with massive scale and complexity.
For instance, petrochemicals had a turnover of Rs 80,625 crore in the year ended March 2012 while refining alone delivered Rs 294,734 crore. These two businesses alone are bigger than the hundreds of other companies in the private sector.
"The candidate should be extremely comfortable about holding these roles," Srikanth adds. What is often left unsaid is that executives who manage these roles would be candidates for leadership positions opening up within the organisation and its affiliate companies. "There are different dimensions of learning within the organisation, the width, the depth and you often have to be individually driven to succeed," says Cherian. His boss, Michael Wheeler, vice-president (procurement and marketing), concurs. "There is great lively interest in the programme. We discuss, debate, there are weekly sessions. We take them through various levels of procurement, planning and operational models." Wheeler has worked in global giants such as DuPont and Conoco Philips.
All functions and divisions are not open to RALP executives. They are now rotated through only four main departments. Future recruits would be exposed to more, making the process bigger and expansive. By that time, Reliance's needs and requirements would have greatly increased, making RALP an integral part of the company's growth.
AROUND 32 execs are part of the first phase of RALP
RECRUITS ARE assigned to roles under the mentorship of a senior executive
THEY ARE put through different depts & progress is monitored regularly
EXECUTIVES ARE assigned to particular functions once programme is completed
OBJECTIVE IS to hone skills and make people take charge of key roles
