Abstract
I have always been an intrapreneur including in a large company like Tata Steel. The last twenty-plus years have been in high-growth startups where being entrepreneurial was not a choice. My consistent approach and style have been about speed and agility, challenging conventional thinking, breaking the rules wherever necessary, taking risks and relentless focus on executions.
I studied Mechanical Engineering at IIT Madras followed by an MBA from IIM Calcutta. My pursuit of an MBA was not to get a foothold outside of engineering but to rather develop a more holistic understanding of how organisations functioned. I joined Tata Steel as a Management Trainee from IIM Calcutta campus and spent my first 11 years as a mechanical engineer on the shop floor, enjoying applying whatever I had studied in engineering, and doing some real engineering work. I was part of a large engineering division that was responsible for modernising the steel plant. In large companies, you tend to get rotated across unrelated functions if you demonstrate general managerial talent, and that was how I made my entry into the area of human capital.
At that point in time, the company was going through an existential crisis because of the post-liberalisation disruption. The CIS (Commonwealth of Independent States) countries started dumping steel in India at prices far below our cost! Tata Steel was forced to embark on a transformation journey to survive. McKinsey was consulted for thinking through turnaround strategies. I was part of the core team of Tata Steel that worked with McKinsey. We realised that we required a significant human capital restructuring—increasing accountability at all levels, moving away from the culture of lifelong employment and switching to a culture of meritocracy from the erstwhile one of seniority trumping everything. HR had to lead this transformation. And that is how I served my first 3 years in HR, heading the new initiatives.
As much as I respect Tata Steel for its values, I felt the need to operate in a more agile and empowered environment—where I had the freedom to make decisions and could drive outcomes with focus. That is when I entered the world of startups.
Daksh was my first startup, which was acquired by IBM. Then, I worked with a string of high-growth startups—Virtusa, Amba Research, TaxiForSure and BigBasket. I have enjoyed my journey through all the startups, having a lot of fun!
All my transitions have been very carefully timed. Daksh was acquired by IBM and I was clear that I never wanted to work for a large and stable company. As part of the M&A deal, the management team was expected to help with the transition for two years and mandatory two-year lock-in, I moved on. I joined Virtusa which was a mid-sized IT product cum services company and we successfully listed the company on NASDAQ with the ticker symbol VRTU. But once the rhythm of a publicly listed company set in, I moved to Amba Research. Again, I was there until it was acquired by Moody’s. The same pattern holds good for my stints with TaxiForSure, which was acquired by Ola, and BigBasket, which was acquired by Tatas. All my transitions were at an inflection point where the startup that I was a part of achieved a successful exit either in the form of an IPO or a strategic M&A.
I am also high on learning and am extremely curious. So, every time I made a transition, I never hesitated to enter entirely new domains or industry sectors. Therefore, as much as I learned about investment banking and consumer internet, I also learned about grocery retail and BPO!
I don’t think everyone would enjoy working at a startup, and that’s perfectly alright.
Startups are chaotic places and not everyone is comfortable with chaos and ambiguity or being thrown into the deep end with little or no support. Now, if you are the kind of person who loves being thrown into the deep end and figuring out things for yourself, sometimes under extremely stressful conditions, then you will thrive.
If you crave freedom, if you love the responsibility that comes with that freedom, and you can make quick decisions, you have the ability to break a few eggs along the way, and not very worried about being very nice and diplomatic with everyone, and your focus is to deliver, then a startup is a good place.
One needs to understand that one of the fundamental differences between a startup and a larger company is the boundaries between different functions. In startups, the boundaries across different functions are not very rigid. In fact, a successful HR professional in a startup needs to be far more first-principles-oriented and business savvy. It is important to discard standard playbooks or preconceived notions, and instead understand the business context and inter-function interplay. In contrast, the larger companies have fairly rigid boundaries—where HR, product, marketing, finance, operations, all function in their own silos, and HR, in such cases, can operate with standard playbooks.
Also, there is no one way of doing things in a startup! It is extremely context-dependent. One needs to apply first principles’ thinking, understand business imperatives and figure out how to solve business problems using the right kind of HR interventions. Therefore, one cannot enter the startup stating that this is the way I have done things in my last company. To give an example, the context of Amba Research and BigBasket is completely different. What matters to the blue-collared workforce in BigBasket is very different from what matters to analysts who write high-end research reports at Amba Research. Thus, employee engagement and retention challenges were unique to the two businesses, and the strategies need customisation as well.
In larger companies, the functions often bring in their own standard set of practices, and no one questions the people in other functions. In contrast, people in startups are very impatient, and they expect people in every function to deliver results at the earliest. HR truisms like ‘employee engagement is important’ might sound like fluff in a startup. The more meaningful approach would be to understand the most important problem at that point of time and solve it with functional interventions, as required. Therefore, one needs to have a business-savvy understanding of different functions, so that one can customise solutions to meet the precise requirements. To gain this context-specific understanding of business, one needs to have a good conversation as an equal with a Business Head and CFO. In a large company, HR heads often find it difficult to have a conversation with the Business Heads or CFO as an equal, and typically stay confined to the role of an enabling function for talent solutioning only.
One needs to be acutely conscious of this transition and be prepared to unlearn and relearn. Because one has been successful in a large company, and knows many things that have worked well there, does not mean that they would work equally well in a startup context. While some prior knowledge can be applied, in reality, very little can just be transplated. You would essentially need to use first principles to address specific problems that that particular startup is dealing with.
First of all, you should not choose to work for a startup just because everybody in the media is talking about startups and romanticising them. As much as the media praises startups when they are on the rise, they are also extremely critical when there is a decline.
You should join a startup for the right reason. In a large company, things have already been built. You can only make incremental changes and be a very small cog in a very large wheel. In contrast, if you want to be very deeply involved in building a business in totality, you will get a holistic experience in startups. You would get to understand marketing, hiring people, building a team, selling your product, dealing with customer complaints! A startup has the potential to offer a steep learning curve. Having said so, the internal systemic chaos inside a startup could be so severe that you might land up in a situation with no direction or support from anyone. I have known people to be extremely happy about their learning curves, and also those who have been extremely unhappy. It is important that you have the resilience to cope with these uncertainties.
Also, you need to make your choice based on your risk appetite. You could choose between early phase and growth phase startups. In the early phase ones, the promise of a peaked growth is more. However, the product market fit is not there. Consequently, there is no steady revenue stream, and the business is solvent as long as customers are willing to buy! In the growth phase startups, the product market fit has been established and customers keep coming back to you as you are solving a real problem. In this phase, startups are less risky as they can raise capital. In all the last five startups that I have worked with, I made a conscious choice to work with growth stage startups that involved less risk.
The quality of relationships matters more in startups than in large companies because it requires a phenomenal amount of honesty and trust to have direct conversations and solve problems together. Also, relationships are important to overcome activity traps. Activity traps are some things that a few employees indulge in from their earlier experiences, where the activity might not be contextually relevant. An example that I would like to cite is probationary employment. Large companies typically have a probationary period at the end of which employees get confirmed. In the context of a startup, managers might miss the probation confirmation date. The conversation required here is to eliminate the process overload of probation, as it hardly makes sense in the context of startups. These simplification conversations are of paramount importance and are necessary to avoid activity traps. These conversations might be challenging but are much required to ensure that the startup remains focused on performance.
The purpose of employee engagement is to create meaningful experiences, building basic trust and relationships. But unlike large companies, it is not about fun activities, offsites or evening parties. In startups, engagement is part of a much bigger puzzle—about building credibility, building trust and culture. It is about educating employees and skill-building in a fun way. Therefore, employee engagement in Amba Research is not partying but getting the opportunity to speak at or attend conferences and publish papers. Employees there would appreciate experts invited from outside or getting short courses that meet their intellectual needs. Employee engagement in a place like BigBasket is completely different. Here, the people involved are blue-collared workforce, where they think that management does not respect them. Typically, building credibility with them is not easy. Also, their behaviours might not be naturally friendly. But if one shows them respect, their reciprocation improves manifold. Thus, employee engagement with this group is not partying or sharing the company’s vision. It is about having a helpdesk at the end of every month for payroll and giving them an empathetic and efficient understanding of the deductions made. We need to understand that they don’t care about the company’s vision. They only want to be assured that this company is doing reasonably well and that their jobs are assured, and that they are treated well. They want their salary to be paid on time. They should have basic comfort facilities at the workplace—a good hygienic canteen, good restrooms for men and women and access to leaves, as long as they are entitled to it. They should not be stopped from taking leaves if it is a business season! It is extremely important to know what really matters, and accordingly plan for engagement.
Growth happens in cycles. There are many times when companies build things for the future. Managers hire in huge numbers, leading to bulky and at times, inefficient workforce. Then, when investors, stock markets and public markets chase for profitability, the capitalistic system becomes brutal, and even matured companies like Amazon, Google and Facebook lay off people. However, that is not the case for startups. Startups are forced to lay off because of a lack of a steady revenue stream and uncertainties. Most employees understand it. Also, a good startup ensures that no one gets such updates as a shock!
A good startup is much more thoughtful in its approach. They would not make reckless decisions. For example: A good startup would hire mindfully despite being in a growth phase, as they want to avoid firing. BigBasket is one such company. They would never hire unless they were reasonably sure the person would not get laid off.
Having said so, it is important to state that I do not judge a startup as good or bad. Some companies choose an aggressive approach—during high growth, they go all out and hire people, even if they need to fire them in lean times. Others, like BigBasket, choose a conservative approach to things.
There is a business contextual element that one needs to consider. Some businesses can be built sustainably without too much cash burn. On the other hand, some businesses need a lot more capital to be built. In some cases, the complexity arises when there is a need to change customer behaviour. For example, in case of TaxiForSure, customers need to be induced to start using taxis rather than buses. There is a lot of burning of capital involved in converting people, changing behaviours, getting people hooked onto a service or product, and finally, turning it into profitable. In some cases, like Ola, in spite of these investments, it is yet to turn profitable.
Also, the nature of the founder has an impact. Some founders are very ambitious and want to grow their businesses rapidly, even if it means having to hire and fire. But some founders balance ambition with humane things. These founder values also set the culture of the startups.
I continue to nurture entrepreneurship. I am primarily into two things now.
One is an Executive Chairman at a group of companies called Steer Group. There are three independent companies. The Steer Group has pioneered several innovative, some for the first time anywhere in the world, technologies that effectively transform materials through intelligent compounding with applications in the areas of pharmaceuticals, polymers, food and nutraceuticals, biomaterials and biorefining. A team of 500+ engineers and scientists is working to enhance the depth and breadth of these technologies and applications that can change the way we live, eat and stay healthy. I am helping these businesses develop strategic clarity and execution excellence.
The other one is the Artha School of Entrepreneurship. This is a not-for-profit venture. Here, our focus lies in helping entrepreneurs scale their businesses and themselves. While we believe that entrepreneurship cannot be taught per se, there are a few essential things required for scaling that need to be learned for holistic and sustainable growth of startups.
This interview has been conducted independently, and not as part of any funded project.