Aliens At Work

have done it in a simple way - by hiring managers from outside the industry. Heres a look some of the successful and not-so-successful ones

among them.

Reebok thinks it has picked up the dream team to peddle its brand of sportshoes and sports goods in the country. The CEO is from softdrink seller Pepsi, the general manager (marketing) from cigarette numero uno ITC Ltd, and the general manager (franchising) from watchmaker Titan. Matangi Gowri Shankar, director (HRD), explains: The first two had lots of exposure to sports sponsorship while the general manager (franchising) brought in his retailing experience. She herself came to Reebok via Standard Chartered Bank where she had put in a 11-year stint, most of it as a hard core banker.

 

Reeboks headhunting tactics which deliberately tries to identify managers from fields far removed from the sports business is apparently a policy that it follows worldwide. The rationale behind the policy is that people from outside the industry bring in a fresh perspective which insular insiders may often miss. Initially it does create a bit of chaos, says Gautam Advani, general manager (franchising), but then it helps generate lots of new ideas.

Like Reebok, a lot of Indian companies have suddenly started taking a fresh look at their hiring policies. Till a decade ago, almost all recruitment advertisements made it clear that only candidates with experience in the relevant business need apply. These days, the people picked from the same industry are often outnumbered by staffers who have worked in very different fields. From scooter maker LML Vespa, to publishing giant Bennett, Coleman & Co to Korean auto giant Daewoo, a host of companies have started picking up staff who have had little to do with their core business. And in most cases, their experiences have been gratifying to say the least. The new employees often bring in ideas that given them a significant edge over rivals who have chosen to stick to the tried and tested employee pool.

Unlike Reebok, of course, not all these companies have established a policy to look deliberately outside the industry while picking people. In many cases, the employers have been forced to look into different areas simply because of the paucity of enough people in their own field. Take the auto industry for example. For years, India had just three carmakers Hindustan Motors, Premier Automobiles and Standard Motors. In the last three years, at least a dozen new players from abroad have entered the fray. Finding enough people from the existing carmakers to fill all slots would clearly have been an impossible task.. And that is why, much of the recruitment drives focused intially on allied industries, and when that talent pool was picked dry, on any company that could provide smart, hard working, flexible people.

In several other cases, brand new businesses have been set up after the liberalisation drive. And for these companies, there was simply no similar business from which they could have picked people. An organised sunglasses and contact lens industry didnt even exist when Bausch & Lomb stepped into the country a few years back. And that is why, president J S Bajwa decided to look at every possible business when he was setting up his organisation from scratch. The fact that Bajwa himself was a veteran of FMCG marketer Nestle who was making a shift to an entirely different industry was also a prime reason for his flexible attitude towards hiring staff from other industries.

In still other cases, many industries were simply maturing and changing, and to effect this change they needed people with relevant experience, who were simply not available within their own industry structure. The computer industry is an excellent example of this. Throughout the eighties, computer marketers were trying to sell the concept of computerisation to their clients. And given the tough task of selling a brand new concept which most people viewed with disdain, computer corporations had staffed their marketing departments with hard charging direct sellers who could knock on enough doors and persuade clients to try out the new offerings.

By the end eighties though, computers especially personal computers had become a largely commoditised market. Almost every reasonably well educated person on the street had a good idea of what a computer did and the bulk of them also knew what sort of computers they needed. While demand was growing, competition and technology advances had also made sure that prices were dropping and margins were shrinking. Given that scenario, most computer companies could no longer afford to maintain their big armies of expensive direct sellers. While it still made sense to keep a small team of direct sellers to tap the big corporate orders, the need of the day was to create a normal distributor/reseller channel which would help increase the selling reach without increasing selling expenses. But none of the existing marketing staff in the computer industry had any experience of setting up an indirect distribution channel. Little wonder, by the early nineties, most computer companies were hiring managers from consumer durable and FMCG industries to set up and finetune their dealer network.

Whatever their impetus, most companies admit that bringing in

people with disparate experiences have helped them develop an edge. In many cases, the new recruits have succeeded in radically changing the basic operating structure of the industry. Take the case of scooter maker LML Vespa. When it had set up shop in the eighties, LML had initially picked people from the two wheeler industry itself. Unfortunately, it also ran headlong into trouble simply because its managers had too fixed a mindset to be able to combat rival Bajaj. In fact, the first lot of managers at LML were so firmly focused on Bajaj that every bit of their marketing strategy was tailored on replicating the Bajaj moves. The big problem was that Bajaj was a mass marketer par excellence which used its massive size and long experience to sell basic, no frills scooters at the cheapest possible price. And LML was in no shape to match Bajaj in the price game. But still LML persisted. Meetings invariably focused on the price Bajaj scooters were selling at, and how to downgrade the features in the LML models to be able to match those prices. Following tack, LML almost became a BIFR case.

The turning point for LML came when it hired a new marketing chief, Ravi Kant, who hailed from Titan. Ravi Kant decided to adapt the steps that Titan had perfected to break monopolist HMTs stranglehold in the watch market to fit the scooter market. Titan had used fairly straightforward tactics to outwit HMT. The public sector watchmaker used to sell functional, no-frills metal watches at low prices much the same way that Bajaj sold its scooters. Titan turned the undifferentiated, utilitarian watch into a fashion accessory and harped on design, shopping ambiance, and life style choices to sell its watches at a premium. Backed by glitzy designs, high profile advertising and some sharp merchandising, Titan had turned watch selling into a whole new game.

Ravi Kant began to use precisely the same tactics in the scooter market. Instead of focusing on matching Bajaj on price in the mass market, he took LML is exactly the opposite direction. He turned LML scooters into feature rich, premium products. He priced them higher and sold them through revamped showrooms. And he found that there were enough people who were ready to pay extra to get a scooter which they perceived to be a new generation model.

The first salvo from the LML marketing department was the T-5 model unveiled in early 1992. This was clearly an upmarket scooter boasting higher power, better seating angle and a host of other features. It was also priced a couple of thousand rupees higher than LMLs own basic NZ model, and several thousand rupees more than the Bajaj offerings. Ravi Kant was gratified, though not particularly surprised, when the T-5 started generating more demand than the basic models. Since then, LML has launched one new model after another, each one tightly segmented, and all of them boasting a host of features more advanced than the Bajaj model. And he has turned the scooters from an utilitarian vehicle to a life style product. While Bajaj still commands a huge lead over LML, the latter has been steadily gaining market share over the past few years.

In an entirely different business arena publishing Bennett, Coleman & Co has also managed to change the rules of the game by staffing itself with managers from outside the industry. Till a few years back, Bennett, Coleman & Co operated much the same way as any other newspaper group. It was a clubby atmosphere where other rival newspapers were not even re-cognised as competitors but were referred to as contemporaries.

All that changed when Samir Jain became vice-chairman and decided to treat the newspaper business exactly as any other business. One of the first steps he took was hiring S K Mehta (who had just retired as chairman of the tobacco division and executive director, marketing, of ITC) to head his marketing team. There was nothing in common between the two companies apart from the fact that they both had good accounts departments, reminisces Mehta, who retired from Bennett, Coleman recently. After that, Jain and Mehta hired fresh blood from a host of industries for practically every department in the company.

Soon, the new team that changed Bennett, Coleman & Co so much that it looked like no other publishing house. Two of the most important changes were bringing in the brand management structure (where each newspaper was treated as a separate product or brand) and the orientation to treat any publication as an independent profit centre.

The latter was particularly radical in the publishing industry where newspapers and magazines, once started, continued on forever irrespective of whether they made profits or losses. The profit centre theory ensured that many well-known mastheads in the Times group Dinman, The Illustrated Weekly and Career & Competition Times were shut down because they were unprofitable businesses. On the other hand, brand management ensured that several publications like The Economic Times and Femina were changed drastically to better attract advertising revenue.

While several critics carped on the fact that the Bennett, Coleman had turned publishing into just an ad generating exercise, one point is clear the group has become the most profitable publishing empire in the country.

Citibank too used much the same tactics to change the face of the credit card market and turn the plastic into a consumer product. In its early days, most banks sold credit cards the same way they sold any other financial product. And they also ended up targeting their own existing customers for other services while marketing credit cards.

Citi changed all that by deciding to peddle credit cards the way any consumer company sold its brands. To be able to do that, it hired former Brooke Bond marketer Sanjib Chaudhuri to head its credit card operations. Chaudhuri in turn hired people from durable and FMCG marketers to build his team. Our mission statement was to be the most preferred and the most admired for payment mechanism in retail India, says Chaudhuri.. Today, Citi can take a large measure of credit for making the plastic so ubiquitous in the country.

But while almost all companies which have experimented with staffers from other industries have similar success stories to relate, a few of them also advise caution while hiring people. One common problem many of these companies have faced is that new people come with new ideas but also take some time to learn the nuances of the business. This especially is the case in the computer industry. Director (HRD) of HCL Corporation, Sujit Bakshi, points out that many of the people hired from durable companies find it difficult to adjust to the infotech industry because of the technical skill levels required in pushing the products. Any dealer can push a television or refrigerator for example. But the dealer who tries to sell personal computers often requires more skills and also backup from company managers to be able to push enough numbers successfully. In fact, HCL trains new recruits from the durable industry for as much as six months to acclimatise them with the peculiarities of the infotech industry.

Then, of course, says Bakshi, many new recruits who come from relatively structured and mature industries find it difficult to adjust to the frenetic pace of the computer market. People used to growth rates and targets of 5-6 per cent per annum find it hard to fit into the computer industry which is expanding by almost 50 per cent every year. Moreover, there is the product profile and life cycle which makes things a bit upsetting for many newcomers. A toothpaste will always remain a toothpaste but in computers you can never be sure. You cannot take a very long-term view of any product, points out Bakshi.

One of the auto makers also admits to similar hurdles with

new staff. The auto industry is fast changing so you have to

react fast. At the same time you need to be meticulous because mistakes can be expensive, says a manager in one of the new auto companies.

Despite those problems though, cross industry hiring

has become a fact of life in the nineties. And as most managers agree, the benefits far outweigh the cultural problems that need

to be faced initially when a bunch of disparate people are put into a hitherto staid department.