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'Each HR Leader Has To Think As A Business Leader First'

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Nagarajan Balanaga holds a Bachelors degree in mechanical engineering, but he preferred to do his masters in Human Resources after he was convinced that most engineers don't innovate and end up as managers. And now as Vice President, Human Resource, Cummins Group in India, he is changing the organisational environment of Cummins, a $18-billion global corporation, in India. But the engineer in him comes out when he says one of the first things he would like to change is to gain efficiency by moving away from manual and stand alone processes to integrated automated processes. And yes, he wishes there would be a change in the mindset of HR professionals from being a support function to leading the business. Excerpts:

What made you choose HR as a profession?
I hold a Bachelors degree in mechanical engineering. After studying 24 different subjects in mechanical engineering, I was left confused on the subject that could be pursued further. Through my interactions with seniors it had become evident to me that in the industry, engineers have less than a 10 per cent chance of driving any invention or design and that most engineers are really managing people. If that was the case, I felt why not pursue HR as I could have a greater impact on people. It was then that I completed my Master’s degree in Human Resources and crafted my career in this field. 
What has been the biggest achievement of your career?
As a youngster my ambition was to simply become a “‘manager’” in a decent company. Over the years, instead of aiming for the BIG achievement, I have continued to cherish the many small achievements in my career. For instance, a decade ago, as the HR Director at 35, leading the HR operational excellence work for 25 odd countries felt like an achievement to me. Today, my biggest achievement comes from seeing my team flourish in their career. So does being a part of the leadership team that creates HR strategies for an the $18-billion global corporation such as Cummins. Changing the organisational environment of Cummins in India, and being selected to be a part of the Executive Team of 25 (out of 40,000 employees) gives me a sense of purpose.

What are the steps a company should take to develop and motivate future leaders?
It is imperative to have the right set of leaders across levels who will lead employees towards realising the vision of the company. Leadership development should not be left to consultants. Senior leaders in the organisation must exhibit personal commitment to nurture leaders and drive leadership culture by deeply and consistently engaging with their employees. It is important to make budding leaders understand that they need to optimise for the Company and not for themselves.

We have  a 24-month programme where the chairman and the global HR leader engage with each participant of the executive development programme, and set similar expectations on the other senior leaders to replicate the system at next levels.

Since leadership is like an ocean, one has to pick certain aspects and adhere to it. Cummins has identified ‘high performance team approach’ and five critical leadership skills essential to great leadership. These are: coaching and development, talent management, fostering open communication, diversity management and strategic thinking/ setting the aim.

Besides, companies should approach leadership development at multiple levels, as it is equally important at entry, middle and senior leadership levels.  Community project is an area which can be leveraged to develop tremendous leadership skills. 
How do you retain talent in your company?
We believe right environment is a key to employee retention. As our former chairman Tim Solso said: “It is all about good bosses and meaningful work”. It is crucial to balance multiple elements of the organisation’s eco system to create the right environment that helps people realise their career dreams and feel good about what they have contributed to the organisation, everyday.

At Cummins, we have devised a ‘Great Place to Work’ strategy which focuses on nine elements that drive employee engagement. Having said this, some amount of attrition is good for the company. Every year while a company recruits 15-20 per cent new hires, it helps to lose a small number of employees who fail to align with the organisation’s culture and values. 

What sets your company apart from other companies as far as work culture goes?
Cummins Inc. is a 93-year old global organisation that is built on a strong foundation of values. We spend a lot of time in ensuring that our new hires understand, align and appreciate these values. The six core values are integrity, innovation, delivering superior results, corporate responsibility, diversity and global involvement.

Our ethics governance infrastructure is very strong and tolerance levels for violations are zero, irrespective of levels and seniority. This drives better treatment of each other at work. We embraced diversity at a very early stage in our journey and strongly believe that it is a competitive advantage for us. Our hire to develop culture, wherein we encourage significant job rotations across businesses, six sigma, corporate responsibility and performance ethic sets us apart from others in the industry.
What is the biggest challenge you face when selecting people?
We look at hiring people with high ethical standards and who demonstrate the six core values and personality traits that define and form the backbone of our organisation. Many a times, our external environment does not subscribe to all that we believe in and we therefore struggle to find people at managerial levels who can readily hit the ground running on the very first day. These individuals need to be groomed to embrace Cummins’ standards in terms of values.

How do you track employees' satisfaction or dissatisfaction in your company?
Cummins has instituted the Employee Satisfaction/Engagement Survey for tracking employee’s engagement levels. The survey includes behavioral based questions that indicate an employee’s level of engagement/satisfaction with the company.  Conducting the survey globally and having an employee engagement index allows us to compare the level of engagement across business units, regions and functions as well as benchmarking our overall level of engagement with other organisations. Subsequently, every business unit/function develops a specific action plan. In addition to the engagement survey, forums like ‘meet the leader’, ‘focused group discussions’, ‘one- on-one interactions’ etc. have also helped us gauge employee satisfaction levels.
How important is HR to the bottom line of a company?
I feel this question is more appropriate for CEOs. I would say HR is one of the most critical functions to creating, running and sustaining a successful organization. The benefit is realised when the business leader is passionate about the function and the HR leader is capable and committed to drive appropriate initiatives, which help the organisation grow successfully. If not, then it will not work. I am fortunate to have always had leaders who understood the importance of HR and empowered me to help the organisation succeed. 

How should HR be integrated with the core line of business?
Primarily, each HR leader has to think as a business leader first and understand the business well. The second important change in the mindset for any HR professional is to start thinking that they are not merely a ‘support’ function. In fact, they are the ones who have to lead the business through their strategic initiatives and make way for the future. But unfortunately, many HR professionals enjoy playing the second fiddle, waiting for the business to invite them for meetings or solicit their advice or help. They don’t demand their spot for strategy discussions. They are happy to receive a strategy document to start thinking about how they can offer HR support. This has to change. Even the business leaders should probe and engage with the HR partners at a drawing board stage. Having said that, where the HR employees are a thoughtful group and have the passion to add value, there are umpteen situations where the business can pull them to derive value.  
A recent survey has questioned HR's actual contribution in an organisation. Would you like to comment on it with particular reference to your organisation?

I am not fully aware of the details of the survey so I will restrict my comments to HR in Cummins. In our organisation, several culture changes have been influenced by initiatives led by HR. Some examples being; creating an eco system to improve professional employee retention from 80 per cent to 90 per cent levels, embracing diversity, improving women representation from mere 4 per cent in 2004 to 26 per cent in 2012, and improving satisfaction levels through multiple 'Great Place to Work' initiatives. We create and manage the infrastructure to hire right talent at the right time. HR leads all these initiatives in partnership with the business.

If you could change three things about HR practices, what would they be?
  • Gain efficiency by moving away from manual and stand alone processes to integrated automated processes
  • Simplify processes and reduce bureaucracy
  • Industry approach to contract labour 

From HR professionals perspective:
  • Change the mindset from being a support function to leading the business 
  • Sustain the energy of self and the team to run Marathon versus Sprint
  • Spend major chunk of one’s time in thinking about ways of adding value to the business