Crisis Time: CEO needs to be the HR manager

22 December 2008:

For business process outsourcing, or BPO, firms scrambling to survive the global economic slowdown in the face of reduced business from the US, cutting costs and higher operational efficiency is a recurrent theme at boardroom meetings. However, Pramod Bhasin, president and chief executive officer, or CEO, of Gurgaon-based BPO firm Genpact Ltd, preferred to take the debate out of the boardroom to the company’s 36,000 employees when on 5 December he sent an email inviting suggestions on cost-cutting. By the end of the day, Bhasin’s inbox had 150 mails.

“The idea behind this was to keep employees in the loop about the tough times and what we as a company need to do to remain competitive,” he says. Bhasin’s strategy of personally sending out a mail was simple. “One, this would help allay any existing fear among employees. Second, we could harness their ideas because they will know more than the leaders on how we can save costs. ”

Genpact is not the only company where the CEO is personally involved in guiding the staff through tough economic times. At pharmaceutical company Dr Reddy’s Laboratories Ltd, CEO G.V. Prasad is keeping all employees updated on the organization’s response to market changes. Prasad communicates with his employees through emails, quarterly meetings, a blog called Perspectives accessible only to employees, and by talking to them. “In fact, this is the best time to instill the importance of frugality in employees because they will understand it better than in a phase when companies are booking high profits,” says Prasad.

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A slowing global economy is clearly posing unique challenges to businesses in India which have been till now on a high growth path. In addition to steering the company in a downturn, the CEO now has to take on the additional responsibility of
familiarizing everyone in the organization with the changed dynamics of the market, besides using these forecasts to take hard decisions, including reducing employee strength and recasting business plans. The CEO is required to take on the role of the communications and human resources manager to keep employees informed, motivated, engaged and also involved in business concerns.

“The CEO’s role has many dimensions. His ability to understand and connect with his people as well as create a motivating and engaging environment often ensures the differentiating ‘winning culture’,” says Martial Rolland, chairman and managing director of Nestle India Ltd, a subsidiary of the world’s biggest food company Nestle SA. “This is especially so in situations of economic slowdown or deceleration.”