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RIL inherited the culture of a traditional Indian business house, running through hierarchies and institutional clout of the family members to run the show rather than nourishing a talent pool of professionals. But the failure of RIL to take off in the retail sector was largely attributed to the company lacking a pool of decision making people at the middle and the bottom of the pyramid.
Laying Bare | Was Professional Jha Too Much For Family-run RIL?
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In its annual general meeting of 2014, Reliance Industries chairman Mukesh Ambani had talked about people centric policies in the company. The statement was important in the backdrop of the country’s second largest private sector company (largest private sector company in 2014) taking a plunge into the telecom sector, known for cut-throat competition. People who have worked with the Reliance Group of Industries since the Dhirubhai Ambani days say that the company is run in silos by the kith and kin of the Ambani family.
This is perhaps the reason why the position of the chief human resources officer was vacant between 2009 and 2013 and then was filled with HR wizard, Prabir Jha, who came from the country’s most respectable conglomerate, Tata group of companies. The sudden exit of Jha and his position being taken over by one of the family members Hital Meswani raises questions over RIL’s top management’s ability to trust and work with professionals who are not a part of the family. Meswani, is the son of Dhirubhai Ambani’s cousin Rasiklal Meswani and was responsible for building some of Reliance Industries' biggest projects including the Hazira petrochemical plant and the Jamnagar refinery. Hital and his brother Nikhil have been the executive directors on board RIL, since the 1990s. The brothers, many say are close confidantes of Mukesh Ambani.
To Change this, RIL had also roped in its partner company British Petroleum (BP) PLC, to bring in some of the best practices. The HR teams of RIL and BP worked together for a new performance and reward system, talent management practices, resourcing systems, and learning and leadership frameworks in various phases. BP's HR head David Oxley and Jha were jointly trying to change the work culture of a group that was used to implementing the ideas of top few executives of the company.
Jha brought with him the employee friendly culture of the Tatas. Among his important decisions were announcements of a five-day week, increased leave entitlements and modernising performance appraisal processes to make it transparent. He also bought 58,000 film tickets of Bollywood hit “PK” for RIL employees and their families in Mumbai, which received wide media coverage and became the talk of the town.
People who have worked with either of the Ambani brothers say that in the Ambani companies, “the right hand does not know what the left hand is doing.” Many times, more than four people are working on the same project with none of them knowing about the other. In the end the top management takes the decision on whose work is to be accepted. Appraisals are well guarded secrets and many complain that they are also arbitrary, at times.
While this culture bodes well with a company in the business of mining and petrochemical, with no interface with the retail customers, it can be a roadblock for a company that is dealing with disruptive ideas and technologies every day. The fact that RIL has spent over $14 billion to set up its telecom infrastructure even before the launch of its 4G services- an amount that Airtel, the largest telecom player, has spent in over a decade, puts the company at greater financial risk if the new venture meets the fate of its Retail sector stint.