Like never before, the post capitalist society in India is facing problems from within. In one sense, it is tradition vs. status quo; friction between intellectuals and managers resulting in negative growth of industries. Why the battle lines are drawn? What are the gaps with the existing knowledge economy? Who are the main stakeholders in this war? All these need answers to learn more on the imminent war for prominence.
Unbridled capitalism and the spread of information and technology had revolutionized the Indian economy since 2000. Application of knowledge to work and taking recourse to ‘smart work’ as envisaged by F W Taylor, had immensely contributed to productivity revolution and innovation helping the domestic markets to thrive in India. The beneficiaries were of course multi nationals, desi industries having foreign collaboration, and small and medium segment that are run and managed by erstwhile knowledge professionals who gained knowledge from bigger firms thanks to their earlier association with them. This was leading to knowledge economy in India like the West.
Emergence of Knowledge Economy in India
Management guru Peter F. Drucker emphatically mentioned about the role of knowledge capital that sidelines other resources like capital and labor that had much significance before two world wars globally. This prediction came true for India Inc., after the liberalization of economy in 1996. So what was the earlier scenario and what is emerging scenario in India? Before the liberalization the society was framed in feudal manner, industries followed the earlier British or American management system as model.
The protectionist economy before liberalization allowed monopoly, fewer competitors, and lack of threat from MNCs, businesses continue to thrive traditionally with lesser emphasis on incorporating creativity aspects into management or in product innovation. The purchasing power of the people were also low. In this process capital flew through established players who had immense wealth and continued with their existing market share till the liberalization in late 1990s.
Knowledge Workers Begin to Assert
Having gone thus far, we need to think where we are in terms of optimizing knowledge economy, where we lag behind in optimizing wealth creation. Liberalization and competition brought in many players vying for the same market in all verticals.
Product innovation, disruptive inventions, and evolving management models in line with changing attitudes suddenly made the vast chunk of our human capital ill equipped to meet the skill requirements.
We read in newspapers that the salary of fresh MBA professionals in 10k and the professionals who can make a difference are scarce. This prevents businesses from optimizing wealth creation. Another interesting scenario is companies are making losses to the extent of not repaying the loan amount to banks.
Look at the other scenario, CEOs are getting fatter salaries, so are the knowledge workers in different verticals. If the CEOs want to maintain fatter salaries, they have to retain their knowledge workers. This again depends on making the knowledge workers productive on their own volition. This should be seen in the context that if the executive is non-cooperating, still the businesses are at the receiving end, as they have to relieve the talent as per the notice period agreed upon both parties. Here comes the importance of human resource managers who can help in getting replacements. But how successful are they? Are businesses really benefited out of it, is the next topic we need to discuss.
Friction Between Knowledge Workers and HR Team Over Who is Big
In a constantly evolving business scenarios, attracting and retaining talent has become the most difficult issue being faced by the industries. Knowledge is an ocean and identifying the right talent that is rightly fitting into the skill requirements is not an easy task. An HR executive or a recruiter does not come under the class of intellectuals, they are normal executives who search talent with the help of keywords. This process doesn’t require big education as a person with good common sense having high school level education can perform this task.
What I am intending to say is, since the executives who are into talent hunt were given undue weight due to our education system which simply injects pride into qualifications like MBA. News like lack of employable skills to meet the talent requirements often finds its place in the news papers but to no avail. Here what I am intending to say is, the importance of HR executives in the organizational hierarchy act as a stumbling block to attract and retain talent. The right talent that plays a role in wealth creation is often lost to organizations as they have not changed the traditional system that gives more weight to the HR personnel.
This apart budgetary constraints act as hindrance to attract and retain talent. If the knowledge professional is underpaid, they will not be interested to give optimum output in work. Moreover, intrusion of HR executives in their work also make them feel dejected and make them quit. As a result productivity, quality, and ROI suffer resulting in poor project performance leading to a vicious cycle.
The point of the matter here is unless and until the knowledge professional is empowered and is treated above the ego of HR department, industries will go one step forward and two steps backward. How the HR professionals are blocking the seamless flow of talent of knowledge workers working towards wealth creation needs further discussion.
Corruption in HR Department
Corruption takes its toll in every sector and HR department is no exception. The instinct for survival prods them to play power politics. Anyone who can understand their hidden agenda will be put under surveillance, given poor appraisals, and intolerable work pressure to achieve non-achievable tasks made them the knowledge workers to call it quits. If looked closely, one can understand that there is a nexus between corporate HR managers and consultants where both parties benefited due to attrition factor. So the more the attrition, the more the wealth added to the HR decision maker.
The corrupt HR system wants attrition to happen where they outsource the talent hunt to the recruiting consultants and pay hefty sum to the consultancies where part of the sum reaches the HR manager who makes the decision to outsource the talent acquisition. In this process, the losers are business heads and industry captains who believe and follow the traditional HR system where the power actually rests. It is the very system that empowers the HR personnel more over knowledge workers who are in fact the real wealth creators for India Inc.
Why and How Knowledge Workers are Above HR team
Many ‘whys’ and ‘hows’ emerge at this stage from different quarters. The reason is very simple, as many in the system are not out of the box thinkers. They just go by the system of old wine in old bottle with no place for the new wine that will pose existential threat to them. Our next attempt is to unravel the entire corrupt system from head to heel. In a constantly evolving market and changing knowledge what is more important is meeting those challenges through self effort, observation, trial and error than giving undue importance to institutions that churn out thousands of graduates, or candidates that have related experience in a field.
As a matter of fact, to be equipped with the talent requirements amounts to investing a person’s valuable time, even to the extent of investing his/her life for the career. This is the life skill of a knowledge worker. For example, a colleague of mine asked me, “Do you think developing writing skills, an easy task?” “No”, I answered, “In fact, I had invested my life into it.” Just for the sake of illustration I want to tell another example. When I applied for the position of an IT content writer for a small and medium company, I made it clear to the HR manager that an HR manager cannot gauge the caliber of a content writer. The sample works have to be shared with the product manager, project manager and the pre sales manager. Having shared my articles, I waited for her reply.
The HR manager who was a lady called me for the interview. The immediate question I asked was, did you really share my sample works. To my astonishment, she didn’t share the sample works due to sheer negligence. Then I understood, this is not the right place for me to work. Because of the criminal negligence of such managers, industries suffer, and they lose out talent (knowledge workers) to the competitors.
About HR Greed
The pointed emphasis again is when the bureaucracy stifles the knowledge worker, he loses his interest to pursue his creativity which threatens the skilling initiative of the businesses. Business has to survive with innovation. For that the knowledge worker should be motivated, empowered, and financially rewarded. When this doesn’t happen, growth of business will suffer. Now the question to India Inc., is, who is more worthier, HR system or knowledge workers. A culture that fosters change for the good will survive and those who oppose the change will become obsolete.
In the business world there are ethical and unethical business men. The unethical ones use the HR system to satiate their greed by setting high targets with lesser executives, less pay etc. Quantity affects the quality. In a system where HR team is empowered to give results, they lose their effective executives as they don’t know the value of them. If the ethical businesses take the side of knowledge workers they are surefooted for success. Over to India Inc., to think and act.
Retrograde HR Practices Brings Down Productivity
Due to ego problems, HR managers have the penchant to stop recruiting the right talent citing budgetary constraints. There are two reasons for that. First of all, they don’t consider how that particular talent will result in wealth creation in the short and long run. Their only concern is reducing the cost for temporary gains which will in fact reduce the productivity of the organization. They simple remain pennywise and pound foolish by reducing the cost temporarily and in this process the talent acquired will be sub standard or not fitting to the real requirements.
As the HR managers are sacrosanct and above all, no one is able to convey the CEO about the real happenings in the organization. The one with guts to suggest good ideas are anyway removed or disallowed to enter the organization or grow in the rants is another interesting saga. As a result, the productivity of the India Inc. suffers, nay, the nation’s GDP growth is hampered due to the retrograde HR practices and the very system that is corrupt per se.
An Educational System That is Not at all in Sync with Knowledge Economy
Just take the example of UGC or AICTE. They empower people with doctorates. Of course, there are many knowledge professionals who get doctorate through meticulous research. But there are sub standard doctors also who meet certain parameters and protocols and get doctorate. These are the ones who get higher pay in the name of UGC scale which are not determined by the market actually. Interestingly, after every six months markets undergo a churn and the very validity of the research papers of the PHD holders are under stake. Now the question is, do they have answers for the current scenario? The answer is of course ‘no’ as the majority of the doctorate holders with a few exception, can really make a change or breakthrough.
Then the question arise, do the PHD holders in higher position are still relevant to the market dynamics or solvers of industry’s problems. Certainly not. Because of this stronger reason doctorates should not be considered as permanent qualification for important positions. Such doctorates or higher certifications should be applied only for short term projects that will create wealth and after that the research scholar has to equip with new knowledge. If this is applied surely India Inc. is going to be immensely benefited beating all competition globally.
The same principle should be applied for promoting teaching faculties as the education system suffer due to outdated research scholars who are not relevant to constantly evolving markets. This means jobs of educationists are not permanent and if their knowledge is relevant to the market, they should get salary may be even more than what the UGC prescribed or it should be according to the wealth it creates or ROI it brings.
The point of the matter here is, all qualification is good, if it is relevant to the market, otherwise not.
It is at this stage the pro active and industry friendly ruling party should take dynamic decision like scrapping the UGC to promote knowledge professionals and resultant economic growth and knowledge leaderships through them. It has to be remembered that substantial sum is being spent for non relevant faculties resulting in loss of tax payers’ money perpetuating a corrupt system.
The need of the hour is to make educational institutions autonomous to remove obstacles in meeting the market requirements. Jobs in private sector are not permanent. So, should be the educational institutions to promote autonomous authority. Those who impart education need to listen to industry requirements, the problems faced by industries, and the need to promote creative thinking for continuous innovation or altogether disruption of products to meet new demands. This will stir up the markets for application of knowledge in new areas leading to wealth creation.
Having said these, let us think what is needed for the India Inc. Let us discuss one by one.
Promote Knowledge Leadership
To promote knowledge leadership, it is important to understand knowledge leadership first of all. Former GE CEO Jack Welch is the right person who truly understood the spirit and took result oriented actions. Jack Welch had a disdain for bureaucracy and passion for information gathering by going to the front instead of being in the rear. He insisted on spot answers not written reports which can be fudged by the bureaucratic system (read HR manager and the middle managers they promote). Jack Welch had a penchant for inviting his executives for informal conversation to make informed decisions. There is a saying ‘Soldiers win the war, but general gets the credit’.
Businesses are run profitable by the knowledge workers, skilled professionals rather than HR managers who exercise control over them.
For example, a skilled chef is knowledge professional in a large hotel chain. Instead of cultivating him/her, if the HR manager tries to interfere in his work expecting complete subservience, the chef will be demotivated to leave the company. If the hotel built the business successfully over years, it was due to the craftsmanship of the chef, certainly not the HR or middle level manager. At this point, the CEO of the company should have the sense to respect the knowledge worker over the bureaucracy that throws a spanner over company’s growth. The same principle can be applied to a business development executive who gets business but fall into organizational trap laid by the conservative HR system where reports, appraisals are not sent in favor of the BD manager.
An executive in a large media company narrated me how appraisals are fudged when non performing executives transact cash to the HR executive and manager for getting appraisals. In this process, the HR executive loyal to the HR manager gets 5k for giving good appraisals. Here the HR manager is not caught as the cash is not directly paid to the HR manager. I also know a person who often gifts to the HR manager to protect his job. This is a system that loses performers, sincere productive staff thereby killing the productivity of the company.
In such a scenario, the ideal solution is direct interaction with the CEO with the help of IT tools that bypass the HR or mid level managers. It is at this scenario the company is benefitted in terms of cost, promoting knowledge leadership, and awarding the talent with no dependence of HR or mid level managers. In this process, mid level manager are liquidated, HR are low paid clerks who just facilitate things and not involved in decision making.
How to Promote Knowledge Leadership?
Promoting knowledge leadership is like traditional feudalism where the large landowner has sub landowners under him who collect taxes to the main landlord who pays the same to the king. We live in information age. Businesses across spectrum have agreed that (information asset) data is a key asset on par with other capital where processed information, insights, creating mindspace, and its resultant sales conversion will help businesses to capture the large market share.
In the information age, there are influencers, persuading the influencers the key is knowledge where knowledge workers have considerable stakes. For that, businesses empower the knowledge feudals who have knowledge assets and under them should be knowledge aspirants, interns, specialized knowledge executives who have to work as a team with the knowledge asset holder.
Businesses that want to execute projects need to consult the knowledge feudal in other words today’s consultants who will form a team of knowledge workers to execute the project. Such knowledge pyramid works well for businesses rather than in a consulting company where HR managers make decisions that stifle the creative skills of the knowledge team. It is at this stage there is a requirement of directly reaching the branded knowledge team than using the consulting companies as mediators. For the India Inc., it is always makes sense where a knowledge pyramid along the lines of traditional gurukuls work wonders for them as the traditional HR system has failed them.
Knowledge feudals need to be defined contextually. They are the ones who gained experience from executing the projects of businesses. They are experts in ideating and have a network of marketing personnel who helps in production and marketing. They have invested their lives in trial and errors, learning lessons, learning continuously, and possess risk appetite to take ventures successful. In a bureaucratic system where HR team holds the key for decision making, risk taking will be frowned upon therefore quality of the products, efficacy of the products, and ideas for present and future market relevance will suffer.
Digitization can Bypass Bureaucratic Control – Small Team Can Work Wonders
Digitization holds the key for business promotions. All print media has their web presence where opinions are solicited through ‘start a discussion’ meant for the viewers. There are testimonials from users of various products. Responding in time holds the key for businesses to be successful. Quickness in responding is often hampered in a bureaucratic system where approvals have to be received from different heads. If the bureaucracy doesn’t have the same zeal and passion, decision making responding to users’ feedback will be delayed. And of course there will be ego factors that act as blocks in favoring an avid product manager or marketing manager for the fear of losing power.
All these indicate one thing the future lies in decentralization into more focused areas. In short, success lies in agility to make smart moves. This is only possible with empowered small teams to which resources are channelized bypassing all bureaucratic controls. Peter Drucker pointed out that concentration is the key to economic results. Concentration is indeed possible with empowered knowledge workers to concentrate their efforts on swift product innovation, offering best after sales services, focusing on customers through social and digital media, outreach through the best distributive channels for revenue generation. In the knowledge economy there are knowledge oligarchs. Profits are made by cost control. The empowered knowledge workers working from remote having virtual office set up and profit sharing agreement regulated by the government can help in increasing the bottom lines at a scenario where large sums are eaten by swanky offices promoted by the realtors.
Knowledge Leadership Promotes Virtuous Cycle
Today the India Inc., is suffering under cost pressure. The first action they take to reduce the cost is laying off their executives, cutting salaries, recruiting executives at lesser cost, etc., to keep the top line intact. This will reduce the purchasing power of the people as mass layoffs will result in a vicious cycle of postponing of purchase decisions, waiting for the right time, fear of new purchase decisions owing to uncertainty in regular income.
It is at this stage the empowerment should take place by industry heads opting for empowering their key knowledge executive who can bring in profits with knowledge and help in forming a team to work from remote which will help in cost reduction by avoiding costly offices. This will help to reduce the real estate cost. It has to be remembered that rising office cost, accommodation cost which are unable to bear destroys both the industries as well as executives, reducing the purchasing power, and taxes to the government all leading to reduced GDP growth. Economy will from down turn to downturn unless and until government takes steps to promote knowledge workers, offer total digital support to work from remote, digitizing Indian villages to unleash a quality revolution where empowered knowledge workers producing qualitatively where government and India Inc., provides all logistical support to market the products.
Promote Knowledge by Other Means
In Mahabharata, we see how a vanavasi named Ekalavya became equal to Arjuna in warfare through self learning. Studying in universities is one way for education. There are other ways also. Earlier people had to go physically to libraries or to classes for learning. At that time competition was less, capturing the market share was easy through traditional means. Production was done by university graduates. Today, thanks to information available on net, anybody can learn and be productive. Ultimately what matters is whether the product or idea has market acceptability. Therefore, India Inc., and Skilling India promoted by government should promote knowledge by other means and recognize anyone who gained skills and expertise through self acquired knowledge. Imagination is more important than intelligence. It is in this manner skill shortages can be filled and introducing the newly knowledge acquirers into the knowledge worker category.
Reduce the role of HR Managers in Decision Making
We have had enough with the bureaucratic control in the organizations. Today, in the digital world the way to profit is not empowering HR managers who are mere costs. In fact, businesses loose good talent as the many HR managers are traditional who cannot distinguish the worth of imagination over intelligence, or creativity over education. In sum, the way ahead for India Inc., is to zero in on established productive workers (for that feedback has to be collected from colleagues to bypass the corrupt system), sincere workers, smart workers helping them to network and get results. In this process, HR team will only playing subservient roles or they can be reduced in size.
Embrace New Realities
Drucker continues, “Business has two key resources – knowledge resources and money. Although changes brought about by digitization is revolutionizing businesses, industry leaders are not keeping pace with the forces of disruption. In India we can see many product innovations, technology leapfrogging, and transformation but no attitude innovation. We see bureaucracy above all. But the fact is that the skills and expertise of bureaucracy that comprises HR team and mid level managers can be learned or imitated easily, for that some learning zest, common sense, and agility are key life skill requirements.
On the other hand, when it comes to match the skills and expertise of knowledge workers, one has to sweat out. The traditional education system created meritorious candidates whose advantage over others is memory and pick up power to learn and absorb things faster to score high marks. But the market forces offered stiffest challenges to the executives and who came out really meritorious were those who invested their lives for their vision, those who had higher risk appetite, and those who had keen sense of observation to identify areas of learning as a result of their frequent trial and error that sharpened their intellect. Not all meritorious students may not have the sharpened intellect like Steve Jobs who was a college dropout but made success happen thanks to his persistent efforts. In the same way, stellar academic records do not guarantee success in business.
The hierarchy that existed in early 2000 where HR team reigned supreme cannot bring success in a changed scenario. Today the knowledge workers are aware of their resourcefulness and they need not be slavishly subservient to the HR team who are in anyway inferior to their caliber. In this digitized era, the need of the hour is to connect knowledge resources with money.
Money is with business heads and with the government. Knowledge workers are everywhere and their details are available on the web. So sourcing them directly is not a problem for aspiring businesses which want successful project execution. The scenario of economic downturn holds out opportunities for small and medium players as decision making is easy with them. They can bid best quote for projects and they can connect easily with the knowledge resources who can commit to finish the projects full time or part time. Since this set up is not disturbed by bureaucracy, both parties are benefited and excess costs like swanky offices, too many managers are avoided with the help of digital services.
Manage the Future
Drucker points out the failures of today’s university education. He had emphatically stated that the center of gravity is shifted to the knowledge worker. Yet, neither educational institution nor management schools equip students with the elementary skills – the ability to present ideas orally and in writing, the ability to work with people, the ability to shape and direct one’s own work. Our institutions churn out large number of candidates who are not employable.
Even then why no action is possible with management institutes. The reason is other than premier institutes there are hundreds of educational institutions run by politicians directly or indirectly. Since they are calling the shots, a trend to reverses it and make them as obsolete is not that easy. But in this scenario what the informed denizens do? They need to organize as knowledge resources and deal directly with businesses. If there is a track record of successful completion of projects with the erstwhile companies along with the chances of cost reduction, which business can restrain them to seek after knowledge leadership where both parties are benefited.
While summing up, I can clearly tell the emerging scenarios. There is simmering discontentment among knowledge workers, ethical workers, and genuine performers who find it difficult to work in a bureaucratic set up. Of course, there are existing business men and aspiring business men who are ethical in nature wanting to outperform and make bottom lines. Make the first move. These groups should be networked in platforms like Linkedin. India is a land of knowledge resources, buyers with immense purchasing power, and tremendous support extended by the ruling party to create millions of opportunities. It is high time that those who are not received their place under the sun make a united effort to make businesses profitable. Knowledge oligarchs like Microsoft Bill Gates who runs a professional platform like LinkedIn has a big role to play in this great war for change.
[Editor’s Note: Views expressed are personal.]