On setting up an organisation

Let's say you are a leader looking to start a new firm. You have resources, the mandate, and the authority. You also have that manana from heaven - a clean slate. 

Here is one recommended approach to putting your organisation together, if you have the resources.

Organisation Structure

Obviously, one of the first things you will think about is Organisation Structure. 

This part outlines the steps to create an organisation structure that will actually work. 

But first, lets talk about the things that DON'T work. 

• The Structure is led by the leader, not the consultant 

A therapist knows the right behavioural elements, but they don't tell you what to do. Instead, they do the frustrating job of pestering you with questions until you realise what you want to do. There are two kinds of consultants you can bring on board - the first, will do what a therapist does, bring the org structure from within you, because you have to live with that structure, not them. 

The second kind will come in and tell you how you should operate, and put 15 analysts on the job. 

Get the first kind. With one key difference. When they see you doing something that is obviously not going to work, they tell you that upfront. If there is enough trust in the relationship, this leads to mutual learning and saves time. If not, the consultant will have to use the option of asking questions until you realise what is going to work for you. 

Here is why the leader is the key decision maker on culture. 

In Nov 2020, the new CEO, Thierry Delaporte, completely overhauled the org structure of the company. This is the email that he wrote to employees then: 

https://www.cnbctv18.com/information-technology/wipro-ceo-thierry-delaporte-writes-mail-to-employees-highlights-organisational-changes-full-text-7469451.htm

Less than a year later, Wipro had changed its story completely. 

https://timesofindia.indiatimes.com/business/india-business/a-frenchman-sitting-in-paris-turns-wipro-around/articleshow/87091176.cms

How was a behemoth like Wipro transformed in under a year? 

The leader created an org structure that allowed them to monitor the business in a way that worked for them, and then appointed people they trust in key roles. 

THAT is the power of leader led org structures. 

• There is no such thing as Industry Standard or Industry Best Practice 

The only thing that matters is common sense and alignment. Some industries have to do some things more than some other things. We take inputs on that, sure, we understand what others are doing and how its working for them. But we do not make those practices our goalposts. Not in anything, and certainly not in strategic things like Org Structure or Business Planning. 

In an emerging industry, we have the luxury of defining the industry standard. In legacy industries, that bandwidth may be a little lesser, but its there. 

In the early 2000s, all Indian IT companies moved to this grid structure - Verticals and Horizontals - Industry * Geography. It was this matrix structure that was dismantled by Thierry Delaporte. 

What Works aka How to define an Org Structure 

A. Define your first line. 

How do you want to view your business. If you had to get 5 key things about your business on your fingertips and have 6 people on a hotline, what would those numbers be and what would be those 6 roles? 

That's the first step - to define your first line. 

B. After that, do a culture workshop. 

A Culture Workshop is the most important thing that you will do in the Org Structure journey. Write out the 6 words that reflect the culture that you want. 

A CEO I worked with recently was insistent that the word he wanted was "family". Even in a competitive industry like IT, he did not want to create a culture focused on competition or personal excellence alone. When thinking of work, he wanted people to think of the office as a family they belong to. 

In the two years since then, we have done 3 employee dipsticks and family comes right on top when people talk about what their culture is. Trust comes a close second. :) 

C. Then, write the JDs and hire the right people 

JDs are important, esp for your direct line of reporting. Hire the right people. People who bring their own functional expertise, and more importantly, share the same keywords for culture. 

Trust has two components - Intention, and Action 

The first is about shared values. The second is about delivering results. Trust is a biped, it needs both to walk the talk. Ensure you bring people who share the values, but can also deliver business results in a foreseeable time frame. That is the only way that their teams and your stakeholders will trust you. 

C.1 The Compensation 

Do have numbers in mind, but be flexible. This is the only place where "industry standard" almost trumps "What we bring to the table." 

D. The Org Structure guidelines

The next step is to create guidelines for an org structure. You can decide lean and efficient, or gig workers preferred, or diversity first - anything works. But do have a small set of guidelines that you communicate clearly to your first line of command. 

E. Let them make their own organisations 

After this, let them make their own organisations. In fact, have this as a key interview question - as a department head, how would you like to structure your organisation. 

Making it Run

A. Involve your own HR team as early as possible. The longer you let consultants run the show, the harder the KT. 

B. Put HR processes in place. Follow an HR Portfolio management approach. Don't go piecemeal. 

C. Invest in human process excellence. Don't think of the function as paper pushers. Give them aggressive talent targets and give them the teeth to bite. For instance, if a manager loses more than x% of their team over a period, they should be able to highlight that as an organisational process. If they find it hard to fill a position for more than x weeks, either they complain or you complain "We are trying our best" or "Market is tough" is not acceptable response. 

D. Hold your HR accountable. Typically, HR tends to enter the room with reasons like "Business needs". But there will be no business without people. Their core job is to marry business needs with talent aspirations. That is literally their job description. If you bring a numbers based approach to HR, you will find that it is hard to hire the right HR talent, but once in, they will LOVE working with you. 

E. Do NOT compromise on values and culture. It never pays. Its very short term, and it guarantees failure. Even if the values route appears to be longer, more painful and far more expensive, remember that markets can stay volatile a lot longer than economies can stay solvent. So, responding to volatility with volatility-supporting behaviour does not guarantee success. 

We don't hire a person, we hire a family

If you have worked in an Indian business family (including Reliance),  you would have noticed one or both of these things:
A. When an employee has an issue with the family (finances, child not listening etc) , they come to their manager (bade babu or seth ji), and a loan or a counselling session is arranged pronto. Sometimes, rules are bent to make this happen.
B. When a child graduates, the seth ji or bade babu calls the father and tells them to send the resume. The child is usually absorbed by the company.

You may also have observed this in domestic staff in India. We hire one person, then her relative joins as driver, another relative joins as cleaner, and the family is engaged. In villages, we are aware of entire generations of 2 families engaged in an employment relationship.

We're all in this together

If you come from Western business practices, you have possibly heard of a word - Nepotism. It is viewed as something negative. Something that takes opportunity away from a qualified person and gives it to someone who is friends or family with the decision maker.

So it will surprise you to know that in the Indian style of business, reference is the best qualification a person can have.

This is practised in two ways

A. We don't hire a person. We hire the family. 

During the industrialisation era, industries were built in the middle of nowhere. It was, therefore, important to build townships near the factories also. This led to bonhomie among the families of those working together.
Contrast that with Electronic City in Bangalore, where employees are expected to spend upto 4 hours a day in buses.

Whenever there was a company event, the entire family was invited to it. The manager made it a point to speak to the wives and convey his compliments. When a person got an award, usually, his wife and family were asked to come up to the stage with them to collect that award.
Contrast that with today, when the families go to ONE family day a year and all award functions are usually held without the family in attendance.

B. Other things being equal, we hire someone we know. 

This was EXTREMELY important. This is why the entire social and religious structure of India is based on professions. Each profession was specialised. Training began early, and by the time a person was ready to join the workforce, they had already had over 10,000 hours of real training on it.

Even when education went from vocational to professional (read: 3R and formal schooling based), companies continued to hire from the family pool of employees if possible. When a child graduated, the father came first to Bade Babu to see if a vacancy was available in the same company.

Surat diamond industry labour is always hired from a certain community, and all the families are interlinked. So one individual cannot even dream of stealing and getting away with it.

The family sort of hangs out together

Why was this done? 

I am, of course, only hazarding a guess. 

1. It ensured employment stickiness 

Just like in story telling, we engage as many senses as possible, to make the experience richer for the audience, in employment, we need to ensure stickiness. After work, the person goes back to their family. If the family is also engaged with their employment, the employee's stickiness goes up many notches. The decision to leave is not an individual one. The wife has friends, the kids have friends, the boss's wife knows your wife. Its a complex web that one needs to extricate oneself from. Much harder than a resignation to one boss or even looking out for a job. 

2. Oh, the beauty of reference checks! 

Today, professional organisations struggle to do reference checks. They get identity proofs , they check educational qualifications online. And they still dont get relevant, qualitative information like whether the person has been corrupt or a predator in the past. Has the person demonstrated any domestic violence tendencies? Was he a bully in the previous organisation? 

In this method, which sustained for thousands of years before it became possible to do formal ref checks. A person would only recommend another if they were absolutely certain of their ability to deliver and their integrity. One puts one's personal credibility at stake. Its personal. 

Companies today try to hire through employee referral programs. Some of them are successful. However, in some key points, these programs differ from the Indian method of hiring who we know. 

For starters, the engagement level of the referrer is not so high that they feel that they are staking their personal credibility. Its a purely professional transaction. 

Secondly, the referrer and the referee are usually not allowed to work together, which beats the entire purpose of referring. Why would I want to bring my friends into the company if I can't work with them? 

Conclusion 

Was it the best way to hire? 

We don't know. But unlikely. There is no one best way to do things. We do what works for us. We learn from multiple sources. This is one of them. 

Is it applicable today? 

Depends. On the industry, company, and the organisation culture. 

Should i use it?
Not without adequate checks and balances, and training. Indian business practices cannot be applied piecemeal. They have to be understood deeply, imbibed, practised in everyday life, and then used as a specific method in business. Business empathy comes from personal empathy. We first spend years being empathic in our homes, putting people first. Then, when we listen to an employee, we do that with genuine concern, not to put a tick on the HR checklist.
I leave you with that thought.