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Changing Dynamics

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The case ends with the MD, Pradeep Saigal proposing to set up a call with Mark, the AMEA (Africa, Middle East and Asia) president of HR, for Uday to discuss his exit package.  Here is a person who supposedly leads the country operations as the managing director and he concedes that neither he nor his HR lead is empowered to negotiate with Uday to arrive at a reasonable and fair settlement.  We see this pattern throughout as the case unfolds. Saigal squirms when he informs Uday that he needs to move out of his role as the sales director.  He would not have reacted this way if he were sure that the decision was taken in the best interests of the company. Again, when he tells Maya that Uday has to go, he lets it out that he has been working with Mark to ease Uday out.  This is yet another indication that Saigal had been instructed to do this by the AMEA boss and he is nothing but a tool to meet a "desire" to revamp the sales team of Delaware in India. So, we realise that the Indian operations are run remotely by the AMEA chief sitting somewhere in Singapore, Hong Kong or Australia. This is true for many MNCs that operate in India.  In the 80s and 90s when India was but a tiny blip in their sales radar, it was justified as "not worth senior  management's time".

But today, as the markets here have grown larger and most of the major economies have stagnated, it is hard to believe that the same strategy is still being pursued!  But then I realised that the reasons have changed. Now India has become too critical to be left to local homegrown leaders. So, what we now see is a power game where again the local management is jerked every now and then based on somebody's whims and fancy. Often there is no historical context to the decision making as constant reshuffle of management brings in expats who have very little understanding of India.

This approach, of course, has always been a bugbear for the local MNC executive cadre. But again, the returns in terms of fancy perks and significantly above average salaries seemed to weigh in quite handsomely in the past. Now the times have now changed. The new generation in India has many more lucrative options unlike the earlier times. In a globalised world, they can choose to work in other countries. With VC's and angel investor's money, they can even try their hand at entrepreneurship. Moreover, there are a host of Indian MNCs, which pay quite well to woo the best talent. As a result, Indian professionals consider themselves no less than expat executives and therefore expect to be treated at par with them. 

An executive who has been on the board like Uday will not accept that he should be given less in severance than any expat executive in the company. Not only will it cause resentment but will also lead to legal battles, which will further tarnish the reputation and image of the company. Social networks make it easy for the professionals to find out where they stand and what their market value is, without having to depend on company appraisals.

In future, professionals are likely to build their own brands independent of the employer.  This will surely tilt the balance in the favour of employees especially the high performing ones.  Technology today is also forcing an accelerated pace of change like never seen before.  Walmart, the world's biggest chain of retail stores, feels threatened by Amazon, which is a rookie in comparison. Market dynamics, too, are changing fast. Alibaba with its dominance in China eyes to acquire Yahoo!

So, no brand or legacy is infallible in today's time.  Hiring and retaining the best people in key geographies is the only way to ensure that the organisation can adapt itself quickly to changing times. Doing anything which goes against this will be suicidal, to say the least.

In the changing business scenario, there is an urgent need for the Delawares of the world to relook at their people strategy in big markets like India.  It is imperative that they let the local managers make their own hiring and firing decisions based on what they believe would be in best interests of the company.  A situation like what we see in Delaware is very damaging for the company in the long term.  The Indian employees are keenly aware of the highhanded "big brotherly" tactics adopted by the Delaware management. We hear a rumbling of discontent as Maya and Prahlad (the HR head) who are well respected within the company, feel upset and anguished with the developments. The morale of the team is likely to go down which would reflect in the future performance of the company. Needless to say that every one of them including Saigal will be on the look out for a better opportunity to ensure that they do not fall prey to the same fate as Uday.  And by then, chances are that Mark Steiner would have moved to greener pastures after having made his mark at Delaware!

Anuradha Parthasarathy is CEO, Global Executive Talent

(This story was published in Businessworld Issue Dated 20-02-2012)