- 1. Putting Leadership before HR the Mantra for Emerging
Companies NASSCOMEmerging Companies Forum Chennai April 25,
- Nasscom & Emerging Companies
- Mittelstand and the s pirit of entrepreneurialism
- Why is leadership so important
- Life cycle of an Organisation
- The potential crisis that entrepreneurs face
- Malcolm Baldridge Framework
- The organisation building agenda
- The foundation of Leadership
3. NASSCOMEmerging Companies Forum
- SME sector forms a significant percentage of the Indian
software and services industry
- Contribution of this sector will be crucial for India to retain
its competitive advantage and sustain future growth.
- As per NASSCOM estimates, approximately 50-60% of the industry
revenues will be from the SME segment by 2008.
- The NASSCOM SME Forum aims to draw strategies to explore the
huge growth opportunity that exists in this segment.
- The forum will also serve as a platform to the SME segment to
share experiences, ally on critical projects and even focus on
partnerships to cater to customer demands.
4. In Germany SMEs are called Mittelstand Mittelstand 5. The
qualitative meaning of Mittelstand
- From a qualitative angle, the term implies a unity of
ownership, management, liability and risk. The enterprise is owned
and managed by the same person or the same group of persons and the
company management is responsible for and involved in all decisions
related to corporate policy. A vital pre-condition here is the
owner-entrepreneurs autonomy in all decision-making matters.
The head of an SME is an entrepreneur Manager who is responsible
for its ownership and management. 6. All entrepreneurs start with a
great idea ..an idea that can transform the world
- Entrepreneurs also have a unique DNA
- They are able to create / innovate
- They are able to take risks
- They are able toreact to changes quite rapidly
- They are informal and flexible
- They have their finger in every part of their business given
their need for control
- They often rely on their gut feel in taking decisions
- They are passionate and have huge energy
- They often have a very personalised style
- Traits that help them to go all out and convert their ideas
into great businesses.
The spirit of entrepreneur managers 7. All SMEs go through
various stages in their life cycle of development with problems and
challenges in each of the stages 8.
- The founder builds a company from scratch around an innovative
product or service:
- Blast of entrepreneurial frevour
- Vision, energy, commitment
- Rides a comfortable wave of success
- The Stabilisation & Growth stage
- The founder appreciates that success came from more than a
flash of inspiration:
- He identifies and defines the ingredients of his or her
- He installs a structure & policies to support it
- Do not recognise the need for building an organisation around
- Get wedded to their original strategy
- May not know which of their formula worked and led to
- May not be able to respond to changing market
- May not be able to provide the leadership and direction that is
now required to stay focused
10. Greiner five stage life cycle model
- According to Greiners five stage life-cycle model of growth
each stage ends in a crisis, which has to be managed and resolved
to grow to the next stage.
Age of organisation Y oung Mature Large Small Stage 1 Stage 2
Stage 3 Stage 4 Stage 5 1. Crisis of leadership 2. Crisis of
autonomy 3. Crisis of control 4. Crisis of red tape 5. Crisis of??
1. Growth through creativity 2. Growth through direction 3. Growth
through delegation 4. Growth through coordination 5. Growth through
collaboration Size of organisation The crisis of leadership is the
most dangerous one. 11.
- Growth through creativity .
- Characterized by start-up company, entrepreneurial, informal
communication, hard work and low earnings.
- Dominated by the founders of the organisation - emphasis is on
creating both a product and a market.
- The founders are usually more focus on technical and
entrepreneurial activities than on management
- They put all their efforts in making and selling a new product.
The enterprise grows without too much focus on the right style of
leadership and without developing the necessary management
- As the organisation grows, management problems occur that
cannot be handled through informal communication. Founders find
themselves burdened with unwanted management responsibilities and
conflicts between the employees and management grow.
The crisis of leadership .leading to the crisis of leadership
- Characterized by sustained growth, functional organisation
structure, capital management, budgets and standardized
- The question of who is going to lead the organisation out of
confusion and solve the management problems confronting the
organisation arises. Need to find a strong manager who can pull the
- During this phase the new manager and key staff take most of
the responsibility for instituting direction, while lower level
supervisors are treated more as functional specialists than
autonomous decision-making managers.
- As lower level managers demand more autonomy, this eventually
leads to the next phase.
What is needed is growth through direction .. leading to the
crisis of autonomy 13. Even the Malcolm Baldridge Award emphasizes
- Americas highest honor for performance excellence, the Baldrige
Award is presented annually to U.S. organizations by the President
of the United States.
- Awards are given in manufacturing, service, small business,
education and health care.
14. Baldrige Criteria for Performance Excellence The leadership
triad The basis for performance management The results triad 15.
So, where is the HR connection in all this?Why put leadership
before HR? 16.
- Leadership crisis is often presented as lack of HR or weak
- Employees are not clear about their roles
- There is lack of performance
- It is seen as an HR issue rather than as a leadership
The Leadership - HR connection 17.
- HR initiatives never get implemented because of the fear of
- HR initiatives may not receive real sponsorship
- HR managers may not be clear about what is expected of
- HR managers my not know what the basis of their work
The Leadership - HR connection 18. We must put leadership before
HR! Leadership People Process People Process People Process 19. The
foundation of Leadership 20. The foundation of Leadership
- Giving and sustaining clarity and direction
- Designing the right organisation that delivers the strategy by
promoting delegation while maintaining control
- Demonstrating a style of leadership that promotes trust,
respect, recognition, performance, ownership and fairness
- While many Leaders are clear in their mind about what they want
to achieve, they seldom clarify this or communicate it
- While their founding team members may understand the direction,
the next generation of employees fail to see it.
- The problems become acute when the founders are unclear about
where they are headed or keep making course corrections.
- Sometimes the direction might be clear but the path to get
there may not be as clear.
- There are several reasons why entrepreneurs fail to give this
- They are so introverted that they find it difficult to
- As the organisation becomes larger, they realise that they need
special skills to not just communicate but rally people around this
- They are also unable to address conflicting views around the
direction and just avoid talking about it
Giving and sustaining clarity and direction 22.
- Leaders may have a clear direction but may still be hamstrung
by an organisation design that is not geared for the future.
- Issues of Organisation design could include the following:
- Job design for key roles might be wrong
- Roles may not be clearly defined leading to mismatch of
- The basis of differentiation and the choice of organisational
form may be erroneous
- Levels of impact may not be clear resulting in disparities
- The Span might be too large
- Accountability may be diffused across roles and levels
- Above all, the original design of the organisation as well as
the original design of roles may need to be recast given the scale
and growing complexity.
Designing the right organisation that delivers the
strategypromoting delegation while maintaining control 23.
- In all organisations in general and in entrepreneurial
organisations in particular, the style of the leader has a direct
impact on the climate and therefore the engagement levels of the
- Entrepreneurs are quite often unaware of their style and its
impact on the climate of the organisation because no one gives them
- Entrepreneurs may be causing unintended damage to climate and
morale as a result of their style.
- Entrepreneurs seldom realise that they need to change their
style in line with the changing life stage of the
Demonstrating a style of leadership that promotes trust,
respect, recognition, performance, ownership and fairness 24.
People Processes & the leadership connection 25.
- While there are several People Processes that are spoken about,
our experience tells us that there are three people related
problems that keep entrepreneurs awake at night:
- The modern concept of employee engagement gives entrepreneurs
the impression that they need to get 70/100 on all people
process.We see it differently.
- We believe that it is important to focus on the vital few
processes that gives the organisation leverage at a given point of
time. Scoring a 50/100 on all processes is not good enough.
The People Processes 26.
- If you have watchedLion Kingthe movie, you will certainly
remember the famous words of Shenzi the Hyena:
- Look at you guys, no wonder we are dangling at the bottom of
the food chain you know if it werent for the Lions, wed be runnin
- Quite often I find entrepreneurs in the same mental state as
Shenzi at the bottom of the chain in the staffing market and
feeling envious about the hiring clout of the larger players!
- Beyond hard realities, there are three leadership belief
systems which seriously inhibit the entrepreneurs ability to
- Fear of paying market compensation
- My style is the best style
Hiring skilled resources 27.
- Entrepreneurs also end up not being clear about their Employee
Value Proposition (EVP) and fail to articulate it clearly.
- Entrepreneurs may also not think through their staffing
strategy including decisions of mix, sources and so on.
- Entrepreneurs are also prone to making huge hiring errors given
the lack of skills and experience or just the haste.
Hiring skilled resources 28. Securing Performance
- While entrepreneurs are anxious about results, they do not
always use an institutionalised process to drive organisation wide
- The reasons for this are many:
- They believe that it is difficult to plan in a dynamic
environment. As a result, they do not haveculture of organisational
level planning. The fact that plans and actuals vary significantly
is also seen as reason not to plan.
- Even if they are sold on the idea, they may lack the discipline
of committing themselves to a plan.
- Those who do plan, focus excessively on budgeting and numbers
instead of looking at how they will achieve the numbers.
- The process may not be inclusive and inspiring
- The plans may never be reviewed and therefore may remain on
- There is often confusion between goals, strategies, initiatives
- Many even believe it is the job of HR to set goals for all
29. Developing people
- I seem to be the lone engine pulling the train along
- For many entrepreneurs, the depth of talent beyond employee # 5
- Successful entrepreneurs quickly learn that their success
depends on assembling a winning team.
- Others try to do everything themselves.
- Entrepreneurs are also worried about developing the people they
have grooming them for higher responsibilities.
- Many do not realise that they need leaders at every level and
that it calls for a disciplined approach.
- The biggest challenge is for them to realise that leaders
develop through the right exposure to workplace challenges and not
in the class room.
- It is also a reality that the grooming received by the founding
team is significantly superior to what the next generation of
30. So, what needs to come first in your organisation? 31. How
do you go about your leadership development journey? 32. thank