Leadership in the Industrial Sector Navigating the Covid Crises Introduction

This white paper is a compilation of key Surviving the pandemic 03 findings from a series of interactions with various Chief Executive Officers (CEOs) and Disruption in industrial sector Chief Human Resource Officers (CHROs) in times of Covid-19 05 on the Leadership Confidence Index report Leadership essentials 06 released by Odgers Berndtson in association with Harvard Business Review Analytic Going forward 10 Services1. The aim of this paper is to share a consolidated perspective on leadership issues Participants 13 that resonate across organisations operating within the industrial sector. It carries key Odgers Berndtson in 14 take aways on the crisis being faced by Get in touch 14 the industrial sector due to the Covid-19 pandemic and the way forward as perceived Our team 15 by industry representatives.

1Odgers Berndtson Harvard Business Review Analytic Services. (2020). The Odgers Berndtson Leadership Confidence Index 2020. Odgers Berndtson.

2 Surviving the pandemic

The pandemic has created extreme exceptional circumstances under which leaders have to run their businesses and ensure their survival. The industry has seen crises situations in the past, but the pandemic caused due to Covid-19 is seen as an exception, wherein revenues, costs, and cash flows have seriously deteriorated.

These are not simple times basis. Further, leaders are infrastructure to support and do not pose simple making business plans based a ‘Work from Home’ challenges in front of leaders. on situation simulation environment. These are times where exercises. These exercises In terms of industry, the leaders are being tested in involve playing out different workforce is overall impacted. terms of confidence in their scenarios and planning the Some plants could remain strength and knowledge. necessary resources required operational even with skeletal for each course of action for Planning is critical for staff with support from the year ahead. For leaders survival, and leaders automation. For some having a road map to work must plan to steer their organisations, most of the on is better than shooting in organisation in these times staff remained on-site and the dark in these times. of crisis. But planning cycles had to follow regulatory have become unpredictable Those organisations that did guidelines. At an organisational and short. The earlier 5-year not have business continuity level, planning to meet the or 2-year plans are obsolete. planning suffered the most regulatory guidelines on Even early January planning under the nationwide social distancing on-site, for the next two quarters has lockdown. For such such as in steel and power become invalid. Organisations organisations, their IT teams plants, posed its own set are now working on dynamic were forced to work under of challenges. plans, which are reviewed immense pressure and on a bi-weekly, quarterly tight deadlines to create an

3 The contractual workforce Most organisations have is the most affected under built up their infrastructure the nationwide lockdown. to enable work from home. The country is seeing one However, there are still of the most glaring labour physical elements involved, crises that is affecting nearly such as external field roles, 40 million migrant labour that have to ensure deliveries engaged in migration back to are done. Manufacturing their native villages from cities.2 being a process-driven industry, the entire supply Logistics, as part of the chain must work for supply chain process, poses successful completion. its own set of challenges in With some companies not the lock-down. In March-April, able to conduct operations, passenger trains were not storage of by-products running and road transport such as Sulphur, need to was blocked. For ports, be looked at. Under these the delivery of past orders circumstances, all such was getting done. The staff aspects are forcing leaders was called to the ports to think differently, and only when required. In the interesting learnings shipping industry, ‘Work from are emerging. home’ could be successfully implemented with the support of technology. However, the storage of goods at ports has become a problem as the capacity is nearly full. The industrial and manufacturing sectors are not early adopters of technology.

2Puri, L. (2020, May 24). The migrant worker crisis needs a multipronged response. Hindustan Times. Retrieved from https://www.hindustantimes.com/analysis/the-migrant-worker-crisis- needs-a-multipronged-response/story-NRCjV7PFFnjJTqlOpi8bYJ.html

4 Disruption in Industrial sector in times of Covid-19

With Covid-19, demand disruption has been massive in the industrial sector. This includes Government infrastructure projects which have been delayed.

In the Oil & Gas sector, the behaviour patterns. of cash flow. This includes first disruption was caused In response, companies will concerns on how to make by the price war between have to rebuild their cost sure that contractors OPEC countries and Russia, efficiency measures, revamp receive money, and which resulted in oil prices their products, and look at importantly, make payments crashing and impacting the scalable profitability models on time. Companies that are sector across the world. in order to survive. highly leveraged, in terms Covid-19 then caused the of large amounts of debt, Unlike other industry second biggest disruption in will be in trouble. Those that segments, only a deferment demand. As per interactions have better cash flows of demand is expected in the with various industry will survive. industrial sector and not a representatives, demand for complete decline of demand. fuel in the industrial sector The Government will likely had dropped by 70% in India push for investments in in the month of April. the construction sector Since behaviour In the Aluminium & Steel as the sector attracts the business, operating with maximum labour workforce is going to change, skeletal staff, the cost of and gets the wheels of completely shutting down the economy moving. automatically a plant is so severe, that The construction sector leaders could not have contributes to 9% of GDP considered this option. in India3. Representatives businesses will of the industry expect the Leaders must study the demand curve to improve different kinds of shifts change. July onwards in comparison that are happening in to other sectors. B. Anand, Chief the minds of consumers. People have had time for The main concern for all Executive Officer, introspection, and there will leaders in these times is be a change in consumer how to maintain a pipeline Nayara Energy

3Invest India - National Investment Promotion & Facilitation Agency. (2020). Retrieved from https://www.investindia.gov.in/sector/construction

5 Leadership essentials

These times are a big test of fundamentals at the People, Company, and Leadership level. In terms of layoffs and pay cuts, there is a sharper focus on performance and performance differential within organisations.

People of below average and disruptive forces. As per OPENNESS TO LEARNING average performance are interactions with industry There is a need for leaders to being let go. Top leadership experts, following are come together and have more in organisations have essential traits required by agenda-less conversations volunteered for pay cuts and leaders in today’s time. within the organisation. This deferred increment in pay- involves the leadership of outs. Some organisations VISIBILITY the organisation to come can support their employees The visibility of leadership together, learn together, and and are committed to not to the rank and file of the share perspectives about laying off their staff. These organisation is diminishing. any crisis. Leaders need to organisations believe that This is one of the reasons informally engage with each they would require trained attributed to the depleting other and their teams in order staff when the demand curve sense of confidence in to get different perspectives goes back to normal, and for leaders of the organisation. and come up with unique some sectors, even rises. Senior leaders are often solutions. For instance, in The Odgers Berndtson more involved in external the case of the oil crisis, Leadership Confidence Index forums and are unable organisations could have report reveals a clear crisis to give the required time come together as an industry of confidence in top global internally. If this can be and learn from each other’s leaders. As per the report, changed, then perhaps there perspectives. There is only 15% of the respondents would be greater confidence an urgent need to share appear confident that their in leadership. knowledge and experiences leaders can deliver long-term to combat the present crisis. success amid increasingly The right leader can anticipate where execution is likely to fail. A true leader can identify those gaps and would know what talent and individual can be deployed to fix that gap. These times are a test of our cumulative experience and leadership. I wish us all great success at navigating through these difficult situations. Dr. Santrupt Misra, Director Global HR & CEO Carbon Black,

6 ACCEPTANCE right questions and can How to keep all team collaborate with others members emotionally Leaders who lack the to find unique solutions. connected, motivated and strength to accept the crisis, The leaders who balance have faith in their leadership, and then who fail to plan for humanity and business are is a task all leaders, especially it, will prove to be ineffective the ones that can connect the CHRO community, have in the present environment. with people. Moreover, at hand in the present time. If the management of the individuals have developed a However, looking at solutions organisation has a typical sense of gratitude for people that have been successful mindset of doing business in their environment who in the past, will not solve a certain way and is not support them every day, today’s new age problems open to change, then enabling greater teamwork. posed by the pandemic. they are leading their organisation towards trouble. EMOTIONAL INTELLIGENCE No organisation wants to fade away, but some are Emotional Intelligence is one still operating using old-age of the most important traits methods. to be displayed by leaders in crises situations. People turn HUMILITY to an organisation’s leader, as well their human resource It takes humility from a team, who are the first leader to accept that they responders in a crises. don’t have the answer In these times, extra efforts to all the questions. In are being undertaken to turbulent times, authentic ensure the safety and leaders get recognised very security as well as the quickly. People connect physical and emotional with and respond to such wellbeing of people are leaders better. Such leaders taken care of. have the ability to ask the

7 COURAGE Regarding talent The key is to have consistent management, leaders are and clear communication The biggest constraint with afraid to make bold decisions with both internal as well leaders in today’s time is that can affect the status as external stakeholders. the lack of courage. Leaders quo, and often do not recruit This includes keeping the often lack the courage the right talent as they local community that resides to make tough decisions. themselves feel threatened. near the manufacturing As per interactions, the The aim should be to get the plants, informed on actions representatives of the right mix of individuals who that may impact them. CHRO community state that bring fresh ideas to the table they have failed to create and can guide and lead the AGILITY the environment required team to success. to push the board of the Leaders are being called organisation, to make hard upon to display agility in CLEAR COMMUNICATION decisions. Further, they state these times. Agility is an that it is the responsibility Rapid response teams essential characteristic for of the CHRO to create a are being formed in leaders to be able to drive conducive environment in organisations to lead the their organisations in such which leaders who have the business through these times dynamic times. courage, have the space to of crises. Their action plans The key to managing take the right action. are conveyed to the board disruption caused by the in a timely manner. However, Moreover, leaders must equip pandemic is to know what there are organisations the team on-ground with the to learn afresh and what to where the boards are not required power to be able unlearn to ensure your past engaged as much and do not to execute the tasks that experiences do not colour communicate effectively. they have been assigned. your present actions. It is also Leaders must tell the truth Just giving orders virtually essential to understand the and not paint a rosy picture and delegating to the ground context under which a certain to employees that may be staff is not going to help in solution will be successful. far from reality. There is a today’s circumstances. strong need for honest and The flipside to this is having transparent communication, a lot of courage but not even if it involves making exercising enough caution, tough decisions such as which can lead to knee jerk lay-offs or restructuring the reactions or an increase in risk organisation. appetite.

8 It takes courage from a leader to accept failure. It takes courage to state, a change of view, from what was said yesterday. It takes courage for a leader to be able to change swiftly and be resilient. These times are a test of courage for all leaders. Manoj Kohli, Country Head – SoftBank India, SoftBank Group International

You cannot have a geriatric solution for a paediatric problem. New Talent needs to join the board to bring effective change in Leadership. Prabir Jha, Prabir Jha People Advisory – Founder, Ex-President & Global People Officer

9 Going forward

The disruption caused due to the pandemic has taken away the complacency built over a period within organisations. Business leaders are looking at costs differently. The steep cost associated with real estate is being re-looked at.

This may result in cost- practices not just aimed opportunities and areas of cutting in terms of setting up towards survival, but collaboration emerging, permanent work from home towards enhancing delivery for India to present itself structures and investment capability, to be prepared as a prime investment in external co-working when consumer demand destination. Organisations spaces or business centres. increases. Going back to the with multinational operations Also, leaders are looking previous old practices, which are worried about the at reducing supply chain now seem inefficient, will not impact the pandemic is costs through the support serve any useful purpose. expected to have on its of technology. Only those companies that operations in due to can identify and capture the changes in perception. IDENTIFYING opportunities will survive. Also, organisations operating OPPORTUNITIES in the Industrial sector These are times in are closely looking at This period serves as the which people are more opportunities to bring in perfect time for leaders to receptive than usual; this new technology, to reduce identify opportunities for the includes Government dependency on imports, and organisation’s growth and departments that are support the ‘Make in India’ to become more efficient. open to collaboration and cause. This includes implementing suggestions. There are many

Leaders are called upon to display agility in these times. The leaders that are successful are those who have made an effort to be on top of a context and apply that context to their business. In the absence of this link, such leaders are not able to guide their organisation to its next destiny. Ashok Ramchandran, Group Executive President – Group HR, Aditya Birla Group

10 WORKING TOGETHER AND by the Government is with a 30% staff strength, RECRUITING THE RIGHT different in different states, or from a work from home TALENT presenting a huge hurdle in environment, could never supply chain management have been imagined in the With this new working for the industrial sector. past. The financial year environment, HR professionals This will ease only with time. closing was successfully are currently working behind Regulatory pressures are implemented across the scenes to engineer people also forcing a certain pace organisations in the sector. to think and work together. of change on individual They are concerned about how In many ways, the pandemic organisations and will to lift the quality of decision has taught leaders that a bring to light issues that making while at the same time, lot of things can be done will need to be addressed ensuring the decisions that differently. Looking at the by their management. are taken are a collective one. manufacturing cycle with a The organisations that plan fresh perspective, new cost With the recruitment cycle ahead and get the first- structure models, looking itself becoming digitised, mover advantage, and those at new productivity levels recruiting the right talent, that will adapt to the new with existing staff, is the way especially at the leadership paradigm, will sail through ahead. Studying the trend level, is a critical cog to and come out as winners. in China for the automotive ensure the operational sector, the demand curve success of the organisation. NEW WORLD EMERGING for small to medium-size As per interactions with cars and the two-wheeler REGULATORY UNCERTAINTY industry experts, a new world segment is expected to rise AND ITS IMPACT is going to emerge. For the significantly. The implementation of industrial sector, conducting regulatory guidelines issued March financial year closing A new world is emerging, one in which true leaders can be easily distinguished from the crowd. It is important to continue to make consistent investments in talent management, to ensure a diverse group of leaders are present, to steer the organisation in these disruptive times. Prasad Medury, Managing Director Odgers Berndtson India

11 DIGITISATION IS NO SUPPORTING SMALL Most important is to LONGER A CHOICE BUSINESSES communicate effectively to keep both internal as well as With restrictions on staff, Large organisations have external stakeholders, such leaders have started come forward to support as investors, informed, and looking at automation small businesses and remain positive. within operations. Though individual skilled professionals these options were always both in cash and in kind. Executive boards must present, they were never Some have engaged with such develop focused initiatives to fully utilised. The earlier staff and the local community ensure the confidence of the pace of digitisation was near the plants and are giving team remains high in their dependent on funds, them lessons on how to stay leaders. Organisations must resource availability, etc. safe and healthy under the continue to invest in talent The current pandemic has present circumstances. management to ensure the fast-tracked the digitisation right set of leaders guide process. Digitisation is KEEPING HOPE ALIVE the organisation in these no longer a choice for disruptive times. organisations. Those that Since consumption behaviour are quickest to adapt to is going to change, leaders History has proven that the technology will survive. The need to have courage, human race has resilience important thing for leaders is identify opportunities, and and can surely bounce back to know which areas to focus drive hope and optimism from the crisis, so long as on for digitisation, rather strongly. However, keeping we have the right leaders to than trying to implement spirits up in such dynamic guide the way. everything together. With times is easier said than automation, efficiency levels done. Leaders must ensure have been found to increase that the brand image of their significantly. organisations is maintained.

12 Participants*

We would like to express gratitude to the below representatives for their valuable insights.

Representatives of the industry include:

Ajay Kapur, Vedanta Group, Jayakumar Krishnaswamy, Prabir Jha, Prabir Jha People CEO – Aluminium & Power Nuvoco Vistas Corp Ltd, Advisory, Founder, Ex- Business Managing Director President & Global People Officer Cipla Anadi Sinha, UNO Minda Kishore Jayaraman, Rolls- Industries, President – Group Royce India, President – India & Ramendra Raghavan, Mettler HRM & Corporate Affairs South Asia Toledo, Country HR Head Ashok Ramchandran, Aditya Manisha Kelkar, Nuvoco Vistas, Samir Cairae, Rio Tinto, Birla Group. Group Executive Chief Human Resources Officer Managing Director Atlantic President – Group HR Manoj Kohli, Softbank Group Satish Sharma, , Ashutosh Telang, TrueNorth, International, Country Head – President – APMEA ( Asia Chief People Officer SoftBank India Pacific, Middle East & Africa ) & Whole Time Director B. Sridhar, ACC Ltd, Chief Milind Apte, CEAT Tyres, Sr. Vice Commercial Officer President – Human Resources Sudhanshu Saraf, Jindal Steel & Power Ltd, Director B. Anand, Nayara Energy, CEO Monal Srivastava, DP World, Regional Head Human Capital Sunil Duggal, Vedata Group, Devashis Rath, UltraTech & Admin, Subcontinent Region Group CEO Cement, Senior VP Talent Management, OD & Nanda Rackanchand, Tata Sushil Joshi, Adani Airports, Organisation Effectiveness Chemicals Ltd, Senior VP HR Senior VP & Chief Human Resources Officer Dilip Pattanayak, JSW Cement, Naveen Gautam, Hella India President & CHRO – Steel & Automotive Pvt Ltd, Managing Tanvi Sondhi, UltraTech Corporate Director Hella Automotive Cement, HR Business Partner, & Executive Member of the Cement Marketing, RMC & BPD Dr. Jayant Kumar, Adani Board (Electronics business) Group, Joint President HR Thimmaiah NP, Meritor HVS Neeraj Akhoury, LafargeHolcim India, Managing Director & Dr. Santrupt Misra, Aditya Birla India & Ambuja Cement, CEO CEO – India Group, CEO, Carbon Black; & MD Director, Chemicals & Director, Videh Jaipuriar, Delhi Group HR Neha Mungale, Hella India International Airport Private Electronics, Deputy Manager Limited (Dial), CEO Faysal Hamza, Essar Group, – HR CEO and Board Member of Vijay Sinha, JSW Energy, Sr. Essar Exploration & Production Nupur Mallick, Tata Sons, Vice President – HR Ltd Mauritius (EEPLM) Group Chief Human Resources Viraj Kadam, Donaldson Officer Gautam Chainani, JSW Steel, India Filter Systems Pvt Ltd, President Human Resource Paras Kaushik, Motherson Managing Director – Strategic Initiatives & Sumi, Head Group Human Workforce Automation Resources

*In alphabetical order

13 Odgers Berndtson in India

Odgers Berndtson For over 50 years, Odgers Odgers Berndtson’s strength India works with Indian Berndtson has helped some of lies in the partnerships we conglomerates, large the world’s biggest and best develop to address that need. globalising Indian companies organisations find the senior We form strong relationships and foreign multinationals talent to drive their agendas. with the most talented to discover and develop We deliver executive people, with those seeking leaders with the talent to search, assessment and them and between our own capitalise on India’s growing development to businesses teams globally, to bring both markets. With a pan-India and organisations varying in sides together. reach through our offices size, structure and maturity. in and Delhi, we It is because of our deep, pride ourselves on a deep We do that across over 50 non-transactional and understanding of every sectors, whether commercial, lasting partnerships, that aspect of our clients’ needs public or not for-profit, and our clients can acquire, and a focus on a quality draw on the experience of develop and retain their candidate experience. more than 250 Partners and strongest leaders. their teams in 29 countries.

Get in touch

Prasad Medury Mahima Chaudhary Managing Director, India Consultant, Industrial and Social Sector (Higher Education) Practices [email protected] +91 124 4758301 [email protected] +91 22 61695901

14 Report compiled by

Prasad Medury Akamsha Bipin Managing Director, India Marketing Associate, India

Our team

Kester Scrope Gaurav Seth Mark Braithwaite CEO UK & APAC Partner, India Managing Director, Asia Pacific, [email protected] [email protected] +44 207 529 1060 +91 124 4758302 [email protected] +65 3165 4744

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