lets not waste a good crisis

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Uncertainty has become the new certainty. A teetering economy coupled with policy paralysis provide for a perfect ground as to how India Inc. can turn the crisis into an opportunity by investing in people.

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Page 1: Lets not waste a good crisis

www.peoplematters.in

Page 2: Lets not waste a good crisis

www.peoplematters.in

•S&P has raised questions over India’s economy, which is hit by high government borrowing, rising imports and political compulsions that have stalled reforms in key areas.

•An ETIG analysis shows that the share of employee cost in total revenue for BSE -500 companies dipped from about 8.4% in FY’11 to 7.8% in FY’12; the lowest since FY’08.

•Leaders in tough times are expected to make prudent financial & organizational decisions, communicate effectively with the customers and employees and instill confidence in their teams.

•Management should use times of uncertainty as an opportunity to invest in HR initiatives that are fundamental to the organization’s growth and sustainability.

Interesting facts!

Page 3: Lets not waste a good crisis

www.peoplematters.in

5 Action Points for Leaders

1.Be honest and communicate - An effective communication helps decode the downtrend, the causation variables and the likely recovery variables.

2.Motivate and instill confidence - The challenge of holding on to great teams and keeping them motivated does not go away when the economy is in for a slowdown.

3.Believe in people, build capability - Progressive leaders realize that in a tough and challenging business times, people are the organization’s core strength; they will define and deliver the blueprint to recovery, success and sustained growth

4.Invest in people - Conserving costs should not imply reducing spending on training and talent management initiatives.

5.Don’t let crisis go waste - A crisis presents unique opportunities too, and leaders must see to it that the crisis phase does not go waste. It is herein that they must look inwards and focus on their core competencies and discover opportunities for recovery and growth.

Page 4: Lets not waste a good crisis

www.peoplematters.in

“External vulnerability provides opportunities and threats, and leaders must understand both; prepare the organization and people to overcome threats and convert opportunities into business results and growth.”

We believe that the economic scenario is concerning but not grave as yet. We may however, see thesituation worsening if investment and concomitant industrial activity do not pick up in the next 2 quarters. Government may have to restart the economic stimulus and also prevent subsidies from ballooning. Given the present state of policy and politics, it may be a tough act to pull off.

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Page 5: Lets not waste a good crisis

www.peoplematters.in

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We see a big talent development opportunity in this tough environment. Despite the overall external challenges, we are on a growth trajectory and recognize the importance of ‘people and capability’ in fuelling growth. We will therefore invest in building and sharpening our people and capability, through training, experiential learning and excellence in execution.

Increasing employee trust and confidence should be the primary focus of organizations during such tough times. Communication plays a vital role and companies need to reach out to people to understand their apprehensions/concerns. Equally leaders need to be open and transparent in all round communication. Business leaders need to explain to employees the business realities, external environment, competition, etc. Communication with rationale/data can help organizations to increase employees trust.

Page 6: Lets not waste a good crisis

www.peoplematters.in

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Motivation comes from within. Not from a manual or a set of instructions. We are all chasing a dream atIndiGo.

We have a phenomenal learning and developmentteam at our learning academy called ‘i-fly’. The dedicated leadership related coaching vertical at i-fly along with the folks at HR, are the people who work the magic.

Page 7: Lets not waste a good crisis

www.peoplematters.in

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“The people strategy should always be looked at from the medium to long-term perspective. Kneejerkreactions on people-related decisions should never be taken”

The current economic situation isimpacting the automobile industry but it is a more of a temporary blip and in the long term 12 -15 percent CAGR growth would be the trend in India. Typically in the current situation when we look at the dynamic changes and the global crisis, we can compare it to the situation in the last economicslowdown after which we saw therecovery and 20-30 percent growth in 2008-09. This kind of volatile business environment requires a different leader

Page 8: Lets not waste a good crisis

www.peoplematters.in

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“At the time of uncertainty, the management must beopen and honest.”

Being transparent and clearly communicating with employees on the prevailing macroeconomic sentiments, health of the business and impressing upon them the importance of their contributions to the company, is critical. At the time of uncertainty, it is paramount that the management be open and honest about the prevailing conditions and the measures taken to address them. Effort must be made to make employees feel they are part of a broader vision and that their contributions matter.

Page 9: Lets not waste a good crisis

For Further Information Kindly Contact

+91 (124) [email protected]

www.peoplematters.in

Let’s not waste a good crisisJuly 2012

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