Banking on human capital

One of India’s largest industrial houses, the RPG Group, is in the midst of an expansion drive. The group— spanning power, tyres, retail and technology—has drawn up a blueprint to scale up from a $3.5-billion (Rs 17,150 crore) conglomerate to a $10-billion (Rs 49,000 crore) giant over the next four years. However, the company has realised that there are obstacles it needs to overcome if it has to succeed in its objective. Surmounting human resource bottlenecks is a priority concern for the group.

Harsh Goenka, Chairman of RPG Enterprises, now spends most of his time on HR initiatives. He’s keen to ensure that the group has the human capital to move into a higher growth trajectory. Goenka is busy implementing a rigorous training regime for his employees as he feels the group’s growth will be driven by people, particularly in a tougher business environment.

The RPG Group has created a centralised training curriculum under a corporate university structure wherein employees can opt for or be nominated for courses that are available through the year. Now, group companies have stopped drawing up training schedule for their employees and instead depute them to take part in the common curriculum. This allows the group to move people across companies as per requirements.

The training process is backed up by a report card meant to gauge the benefits an employee has derived from the training and the areas where he still falls short. It is a detailed report card; each skill is broken down into specific actions on which feedback is provided. The employee is then provided with a tool kit that helps him deal with his specific problems. Says Goenka, “As the RPG Group focusses on growth, it is efficient internal processes and a sound work culture like these that will provide the much-needed impetus and capability.” The system has been developed over the last year with an external agency taking feedback from within the RPG family to work out a grading system for executive on different functions.

The group estimates that the only way it can ever manage a three-fold growth is by grooming leaders who can then step into their seniors’ shoes over the next two to three years. Ganesh Sherman, Head (HR Practice), KPMG, says: “The RPG Group underwent a transformation over the last 8-10 years with a lot of new leaders coming from outside. It has changed the face of the top management in every company within the group. However, you cannot do that forever, mainly because the existing staff gets demoralised. The group now has to develop leadership from within and demonstrate that loyalty will be rewarded.”

Given the economic downturn, Goenka is even keen to take the acquisition route to expand the group even faster. And he realises that a well-trained leadership will be crucial in such a critical phase of growth.