As the last quarter of the financial year ebbed away, reluctantly and sullenly leaving behind a trail of noticeable smidgeons that would not allow Hema, CEO and Country Head for a global organization, to forget missed opportunities, failed agility, and reactive decision-making over the past few months.
The first two weeks of April were traditionally the time, when the factory would announce its maintenance shut-downs, and provide the much-needed relief for overworked men and overworked machines. It was the time of the year, when accountants would scurry back and forth, into their caverns, grinding old data, massaging ledgers and trial-balances, aggregating financial results that stakeholders impatiently waited for. It was the time of the year, when the sales and marketing teams would sit conspiratorially around in their annual off-sites, sharing their woes over a beer or two, and bitching about the next year goals and targets.
Most importantly, it was the time of the year, when Stanley, the HR head, would be orchestrating his small team of HR professionals, to heroically anchor the annual juggernaut of performance management – inter-weaving 360 feedback with performance reviews, individual development plans with appraisals, managing employee expectations, tantrums and disappointments – using every trick in the book – coaxing, cajoling, pleading, confronting, and threatening others for support.
Hema was restless as she prepared for her global meet in May.
The role of Country Head and CEO felt like the proverbial ‘crown of thorns’, that got worse with two bad quarters of business performance in the recent past. As a new CEO of the firm, Hema had begun to discover how her predecessor had demonstrated ‘magical’ growth, and gotten himself promoted, and was now sitting pretty in the European headquarters of the firm. She had a hunch that he had not really prepared the India business for the exigencies that had hurt them in the past two quarters.
As the new CEO, she knew that brickbats would be lavishly thrown at her – for she had been an expensive lateral leader, with credentials of having been a star consultant and partner of the leading global consulting firm, and known for her confident demeanor of a no-nonsense strategist with an ‘assertive’ leadership style – all these praiseworthy attributes were also a double-edged sword – it had created envy in several parts of the firm.
Hema was clear that she would not want to be seen as a vulnerable, hapless, victimized woman of her circumstances – ‘women CEOs’ were not very many in this part of the world – and she did not wish to be a patronized as a poor little woman struggling to keep her act together. There was no point in griping and complaining about the unfairness of the whole arrangement – her predecessor had shown incredible growth, opportunistically milking the limited & given capacities, and had played his cards well. She was expected to sustain this growth manifold this without moaning and groaning about capabilities and capacity crunches.
As she looked at the latest mail – she knew she had to cut costs, for she could not bear the burden of a negative EBITDA in the coming six months. She had already initiated many projects in the preceding months around cutting costs – some of these initiatives had limited success, and many of these had failed to make any impact, especially in the factory.
Her predecessor had eliminated all forms of waste and had exploited all the low-hanging fruits. She had inherited a lean outfit and she knew it. Cutting costs today meant targeting manpower costs at the middle and senior management level – a move that could create panic in the ranks and considerably lower the morale within the firm.
… and then, Stanley walked in, looking tired and grim, accompanied by Pooja – a young HR professional who in Hema’s books, was showing tremendous grit, excellence, and real commitment. Stanley sat down, quite gently, allowing his expanse sufficient time to be pleasantly engulfed within the svelte chair … Pooja remained standing till Hema gestured her to sit down.
Swabbing a non-existent bead of sweat that flowed down his jowls with a so-white handkerchief, Stanley opened the conversation – “I think we have discovered an ethical issue at hand … at the factory … and thought it best to share with you before we have a difficult conversation with Ravi …” Ravi was the manufacturing head, who reported to Hema and had been difficult to work with.
He then continued …
“… Ravi has recommended that Mahendra Pratap Singh or MP as he is called, be promoted to the Head of Utilities and Production from his current role as Head for Production for Plant 2.
This is shocking for MP has at best been an average performer over the past 5 years. His last promotion four years ago to heading production had been a political affair – for no one wanted to touch plant 2 within the factory. The plant 2 line had never really stabilized into consistent quality production.
I know that MP had been an old hand at the factory – having seen the commissioning of plant 2 several decades ago, over the years, like Desai and Mehta, has demonstrated mediocrity, loyalty, and no real passion.
We all knew him to be nepotistic and that he had a strong clan under him. He had been resisting most company-wide interventions on six sigma and lean initiatives. There have been several complaints on his behavior – which was seen to be ruthlessly aggressive, rude, intolerant of being questioned, and volatile. Most good engineers don’t last under him.
We even tried sending him to a personal growth lab but he has managed to wriggle out of this each time… I am shocked that Ravi thinks of him as a potential leader… giving him more and more responsibilities… I think there is something fishy happening that must be explored by us … ”
Hema thought this over – she was aware of Ravi’s propensities – and then picked up the office line to call up the factory. Routed into Ravi’s office, she switched the speaker on, and waited for Ravi to pick up the phone.
Fortunately, for her, he did …
“Ravi, I needed some ten minutes from you …,” began Hema, and without waiting for his response, launched into the offensive …
“I have Stanley and Pooja here from HR here in my office, and we are discussing an extremely sensitive issue – this concerns your decision to promote MP – I do not understand the rationale behind this – there is a tinge of nepotism that I fear. Even you have maintained that he has been an average performer, and was lucky to head plant 2, given his past experience. In these times, when I would like the organization to be seen as meritocratic and fair … I cannot fathom your decision… “
There was a palpable silence, and then Ravi’s voice drawled across the room, imbued with a patronizing insolence cloaked in false humility that Hema intensely disliked…
“Madam … you and I know that HR sitting in the corporate headquarters has chosen not to understand factory issues … they think they are too superior to touch ‘IR’ issues, and then often behave like immature children … they have never really invested into building an understanding of working with people who may not be classy or may not know fluent English … but are the sons of soil that run a factory … Madam, I think HR uses all the latest management jargon, but are truly reluctant to touch real issues that are complex and intricate. Madam, If HR start behaving like management consultants, what would you and I do…
You know that modernization of plant 2 has been halted – by APAC and India office last quarter … even my proposal to replace the current plant technology, with new technology was rejected two years ago – it was scrapped as if it was irrelevant while the same amount of money was spent on some strategic initiative that never paid off!
Plant 2 is critical in the overall value chain.
Madam, MP knows this plant from scratch and I need him … you need him … Stanley and his team need him if they want a paycheck every month … does Stanley even know what would happen if MP decided to leave?
I am burdened with outdated technology that HO refuses to acknowledge. We have a high dependency on MP who has chosen thus far to be loyal to this firm. He has been around for years but not a single young engineer wants to get his hands dirty and really understand the plant.
Madam, can HR even find a substitute for MP? If he decides to leave today – Is any of their recommended engineers and stars willing to shift his base from the city into the interiors …
If APAC, India, and you as the CEO, are really keen to display ownership and meritocracy in the business, first transform my plant 2 – even if you were to start the process today, it would take another 2-3 years to commission the new line. If you do all of this in the next 3 years – I am telling you that I will personally ask MP and all others that are seen as incompetent by HR to leave …
Let us be serious here and not raise stupid allegations … you are accusing me of nepotism and lack of professionalism. I would like to accuse HR of willfully sabotaging the team of professionals that I have tried to create over the years… I have to run the factory and deliver to our customers – please ask HR to give me solutions first!”.
The phone line went dead, and there was a sullen silence across the room. Stanley was fuming and yet had not been able to put in his word or perspective. Pooja looked shell-shocked and pale. Stanley rose, his jowls jiggling as his voice rose and fell before faltering into an apoplexy – “… this is a serious case of nepotism and corrupt politics at the factory … who is responsible for making MP so critical in the factory … who is responsible for making the entire factory dependent upon some key people, that can blackmail stakeholders across … Ravi … he represents what is wrong with this country and its politicians … He will never create a world-class factory, with his petty politics, his need to support mediocrity as opposed to real meritocracy, and …”
He then walked out with Pooja right behind him …
Hema knew that she had to take some stance in all of this … her leadership was already being questioned by several. Stanley had been one of her supporters. She also knew that Stanley was well connected with global HR, and her response to this situation was critical.
She mulled over her options …
Mental Models – Homo Reciprocan versus Homo Economicus…
A EUM Perspective
The Ethical Dilemma as illustrated through this case-let, is structured on two hypothetical characters Ravi and Hema and their dynamics.
Ravi and Hema form an essential strand that enables us to explore Indianness and the modern Indian manager in the forthcoming book by Ashok Malhotra and the EUM team. Based on the EUM framework, the book suggests that Hema and Ravi are not two different types of people but symbols of two forces which operate within the modern day Indian managers.
Ravi represents the pull of their civilizational coding of Indianness, and Hema represents the imperatives of the modern day corporate world which are largely derived from management paradigms based on Anglo-Saxon thinking. One of the coding is the essential mental model of the Homo Reciprocan (as symbolized by Ravi) as opposed to the Homo Economicus (as symbolized by Hema) which has been talked about.
Who is the Homo Reciprocan?
Reciprocity in the traditional sense refers to a non-market exchange economy where profit is not as critical as a fair re- distribution of finished goods in a community. In Reciprocal societies and communities, exchange is impacted and governed by social relationships – and social relationships are based on kinship. Reciprocity gave rise to the traditional Homo Reciprocan and the Indian society is replete with examples around kinship and reciprocity.
The Homo Reciprocan acts out through Ravi as illustrated in this case in an interesting way – Ravi invests into dyadic social relationships where he gives gifts to friends and potential enemies in order to establish a relationship, by placing them in debt.
When the exchange is delayed or incomplete, it creates both a social relationship as well as an obligation for a return (i.e. debt). It enables Ravi to establish hierarchy if the debt is not repaid. The failure to make a return may end a relationship between equals.
These social relationships and the consequent complexities are unequivocally managed by the Homo reciprocan. The traditional Indian manager such as Ravi has been able to manage complex hierarchies as well as dysfunctional processes and feelings of rivalry, envy, insecurities, anxieties, competitiveness etc.
As evident in this case, an example of such dyadic relationships, around reciprocity, is around the process of performance. Our research shows that very often the supervisor invest into this reciprocity by offering a gift – a generous appraisal where the exchange is incomplete or at best delayed. The subordinate then carries a debt or an obligation.
Hema – the Homo Economicus
To some one like Hema, this process would appear as ‘nepotistic’ or even corrupt – but to Ravi – it is but a means of managing complex systems. Modern management theories are constructed on Homo Economicus, a much more recent mental model that would look at the context differently.
The main differences between the Homo Economicus and Homo Reciprocan and consequent impact on management are summarised below
Table 1: The Homo Reciprocan and the Homo Economicus
|The Homo Reciprocan||The Homo Economicus|
|Kinship and communities form the boundary for management thinking
|Rationality, Objectivity, and Selfishness form the foundation for management thinking|
|Sacrifice towards the larger good or the Community is celebrated
|Agency and individual power / desire is celebrated|
|Hierarchy gets created through obligation and unequal gifting
|Hierarchy gets created through expertise, competency, and knowledge|
|Gifting determines roles, relatedness, and relationships
|Contracted deliverables and negotiated deals determine roles, relatedness, and relationships|
|Performance and associated management of it is seen as a social process
|Performance is seen and valued as a tangible process|
|Motivation is built through commitment to collective and kinship interests||Motivation is individualized and on the basis of individual desire
Most Anthropologists believe that industrial and post- industrial societies have experienced a cleavage from traditional societies and from the notion of reciprocity.
Our experience with the EUM framework shows that the kinship and its consequent notions of reciprocity have not disappeared but only lie dormant and hence most Indian managers try to co-hold them along with the need to forge relationships around competency, knowledge, skills, and diversity propounded by needs of meritocracy.
We have encountered many effective managers who are able to co-hold/balance these divergent pulls and this ability plays a significant role in their effectiveness as managers and leaders.
However there are also many other managers who remain caught in ambivalence and thus split the two – finding it difficult to work with what is disowned.
Stanley and Hema choose not to understand the dynamics of reciprocity and kinship that Ravi is anchoring hundred of miles away. Ravi is prepared to appear nepotistic for in reciprocity, he gains commitment from people who he cares for as well as potential enemies. By unequal reciprocity, he is able to maintain control and build a hierarchy.
You, o Reader, take a call on who would you like to support … for it may illustrate how you balance the Homo Recirpocan and the Homo Economicus within …
This blog, the second in series of the encounters between Hema and Ravi, is based on the forthcoming book on EUM and the Indian Manager which is written by Ashok Malhotra and joined in by many of us including Sarbari, Naren, Abhay, Snigdha and I. I have already touched upon the theme of Sibling Rivalry versus Competitiveness in my earlier blog.
I have referred to Homo Economicus in one of my earlier blogs.