Leadership development by Mr VC Agrawal at HRRT organised by ISPE & UPES Dehradun

8th Oil & Gas HR Round Table

Leadership development in PSU frameworkframework

New Delhi

August 27 & 28, 2009

V.C. AgrawalDirector (HR) &

Director In-charge IBP DivisionIndian Oil Corporation Limited

Agenda

• Leadership

• PSU context• PSU context

• Leadership development practices

in PSU context with specific reference to IndianOil

Leadership

Dr. David C. McClelland on Competencies

“Leadership competencies are best described

as an iceberg, with a person’s knowledge and

skills representing the visible tip of the skills representing the visible tip of the

iceberg, while the underlying and enduring

personal characteristics (for example, self-

confidence, initiative, empathy, achievement

orientation etc.) represent the larger portion of

the iceberg, hidden below the waterline”.

Skills(How-to’s)

Knowledge(Facts, Concepts, Theories)

The skills and knowledge

are easier to identify and

develop

attitudes

The Skills,

Knowledge and

Attitudes can be

assessed to determine

need and developed to

improve performance

COMPE

Leadership competency model

Other Personal Characteristics(Traits, Values, Style, Opinions, Motives, Self-image)

(Facts, Concepts, Theories)

Attitudes(Behaviour, Achievement Orientation

Articulated perceptions)

Source : This iceberg incorporates some elements of the Hay / McBer model and Dr Scott B Parry’s model

The attitudes are the

articulated values and

perceptions that are

demonstrated through

behaviour. Attitudes can be

modified by the

environment and through

training

The Other Personal Characteristics are harder to identify and develop,

but can make the most difference in demonstrating a competency

ETENCY

Leadership competency model• Intrinsic need to achieve is key to successful

entrepreneurial activity, which in turn, is the lynchpin of economic development

• This ‘need to achieve’ can be taught and learned• This ‘need to achieve’ can be taught and learned

• Social and political structures in the country could interfere with entrepreneurial activity

• In such a situation, economic development moves at much slower pace.

Ref : “The Indian CEOs – Competencies for success”, joint study by PESB, BPCL and Hay Group in 2005


• Socially responsible business excellence

• Energizing team

• Managing the environment

• Inner strength


The task of a successful CEO in a fully

competitive market is to motivate his

internal team and successfully meet with

external competitive pressure through

innovation and efficiency.

Dr Manmohan Singh

Prime Minister of India

PSU context

• Majority shareholding by Government

• Management control

– Board managed– Board managed

– Within overall framework of Government

policies / guidelines

• Compensation package in line with Government (DPE) guidelines

PSU context

• Other HR policies like recruitment, VR scheme, CDA rules as per DPE guidelines

• Presidential directives on reservation in recruitment and promotions

• Reservation in appointment of dealers/ distributors

PSU context

• CVC guidelines in purchase and work contracts

• Government audit / CAG• Government audit / CAG

• Integrity pact

• Right to information Act

PSU context

• Parliament questions/ Parliamentary Committees

• Official Language Act

• Various commissions

PSU context

• The Persons with Disabilities (equal opportunities, protection of rights and full participation) Act, 1995

• VIP references

• Public grievances redressal system

PSU context means…• Due to limited compensation package,

difficult to hire experienced / competent professionals at senior level from outside

• Mostly dependent on internal development• Mostly dependent on internal development

• Observance of various Government guidelines makes business processes bureaucratic, leading to dampening of speed

• Recruitment to the extent of 50% below benchmark – extra T&D efforts needed

PSU context

All public sector CEOs are presiding over people’s money. We must recognize that we are answerable. The Parliament, the Central Vigilance Commission, CAG are essential since it is public property. The

public sector is to make profits but it has a social public sector is to make profits but it has a social role which is equally important. Therefore, the role

played by CAG, Central Vigilance Commission or the Parliament should not be looked upon as

interference in the working of the organization, but must be taken as an occupational hazard.

Ram NaikFormer Minister of Petroleum

& Natural Gas

Leadership development practices in PSU

• Quality recruitment at entry level

– Better compensation

– Job security– Job security

– Career opportunities

– Good social security schemes

• Very strong training and development systems– Need for internal development for senior

positions


positions

– Extra inputs needed for people recruited below

benchmarks

– Functional / general management / behavioural

programmes

– Short / long duration programmes


• Very strong training and development systems

– Assistance of outside faculty from premier

institutes / practicing professionals on need basis

– Online / in situ programmes


• Career path models / career planning

– Intra / inter functional job rotations

– Location changes– Location changes

– Emphasis on ‘cumulative’ than ‘repetitive’

experience except for specialized jobs


• Task force approach

– Multifunctional task forces for solving complex

problems

– Opportunities for mutual learning for task force

members


• Succession planning– Identify pivotal positions

– Profile these positions

– Identify potential candidates– Identify potential candidates

– Special developmental focus on potential

candidates

• Identify star candidates through performance – potential matrix

Performance – Potential Matrix

Leadership development practices - PSU

• Effective communication system– Live webcast of communication meeting

proceedings

– Monthly straight talk from Chairman– Monthly straight talk from Chairman

– Face-to-face between Chairman and location

executives once in a month

– Direct communication between Director (HR) and

employees through ‘Personnel Touch’ for

individual grievances/ suggestions etc.


• Empowerment

– Freedom to speak

– Freedom to work– Freedom to work

– Freedom to make decisions

– Freedom to implement new ideas


• Performance orientation

– On line performance management system

– Performance related payments – 40% at lowest

levels to 70% at senior levels (below Board) of

base salary

– Career progression linked with performance,

potential, academic qualification and seniority in

the grade

A freer hand should be given to the CEO.

Cross-examination by Parliamentarians,

Vigilance and other such agencies should be

reduced – tormenting the CEO unnecessarily

must stop. Crime must meet with

punishment. Anyone found guilty must be

punished quickly. Our enforcement is very punished quickly. Our enforcement is very

weak and is an area which needs to be

strengthened.

George FernandesFormer Minister for Defence

Conclusions

• Generic competencies play much more important role in the success of a leader

• Competencies can be developed and learned

• Too many Government guidelines and watchdog agencies lead to dampening of speed in PSUs

Conclusions

• Government has taken initiatives for

empowering PSU managements by making

Navratna / Miniratna companies and by

rationalizing DPE guidelines

• The Ratna Companies have demonstrated • The Ratna Companies have demonstrated

higher performance and growth post

empowerment

• Issues related to Corporate Governance,

Society and Environment are assuming

more importance for long term

sustainability of the organization

Turnover GrowthTurnover Growth2009

Turnover: Rs. 2,85,337 cr

Net Worth: Rs. 43,998 cr

Financials

1965

Turnover: Rs. 78 cr

Net Worth: Rs. 45 cr

From humble beginning to an Oil Giant

Gas

GlobalizationLanka IOC Ltd.

IndianOil Mauritius Ltd.IOC Middle East FZE

Petronet LNG Ltd.

City Gas

Distribution

Exercise of delegated Navratna powers Pursuing strategic vision

Initiatives Petrochemicals

E&P LAB

PX / PTA

Naphtha CrackerPDRP

Domestic – NELP /CBM/Farm-in

Overseas - Bidding/Farm-in Spreading across the value chain

Education

Leadership development by Mr VC Agrawal at HRRT organised by ISPE & UPES Dehradun