For Leena Nair, 40, Executive Director, HR, Hindustan Unilever, the transition last year to the consumer goods major's new office at Andheri in Mumbai has been exciting. Apart from the physical infrastructure in the sprawling office (Read ‘Lever'-aging a better work-life balance, Monday, July 25), Nair and her team have worked hard in providing for the welfare and wellbeing of the 1,700 staffers who work here. But, the core of the HUL philosophy is in developing leaders. In this interview over almost two hours, Nair outlines the rigour that goes into the HUL process in identifying and developing leaders. Excerpts:

Recently, HUL was ranked as the best employer in a survey. What has HUL done and been doing that has helped it gain that ranking?

Let me give a little bit of perspective about the things that we are doing which are helping us to stay as the best employer. And I break it up into three broad parts. The first thing, without doubt, is leadership development which is the core of what we do. We have been known for identifying and grooming leaders, the leadership training we give so that in 10-15 years (some) they hit the Management Committee, the top executive team, of the company. The core principle that building leaders is everyone's responsibility stays. And that starts from day one. These core beliefs have been in this company for the last 75 years. So that belief that from Day 1 anyone who walks into this company has the potential to be a leader, and every leader in the company, irrespective of responsibility, has to help build that person, that is really well understood and that makes all the difference.

The reality is that the ownership of the leadership principle is what makes the difference. Let me give you few examples. One is the amount of time that senior leaders will spend on talent. No less than 25-30 per cent of time will be spent by senior leaders for planning, for talent acquisition, who to bring, how do we bring, and also on questions such as: who are our best people, who are doing our best jobs, do we really know who are the top 10 per cent in our organisation, what is our attrition risk, who are we getting after?

So, twice a year, the management committee would go away for a day to discuss with the top 100 people, the next level would discuss the next and so on and so forth. So we have the whole cascading system where right up to 5,500 people in this company, the last executive, supervisor who is on the front line managing one of our 40 factories for us, is included, other than for work men, for whom also we run a comprehensive suite of capability and leadership development initiatives.

How does HUL ensure a level of mentoring for your management staff?

When a business leadership trainee joins us as management trainee, he or she has to have a coach, who is the senior manager, who is supposed to be friend, philosopher and guide, a mentor, who is normally a member of the Management Committee and a tutor who is his immediate manager who helps him and guides him on projects. It's each of these people who have a role to play in making sure that the trainee learns. What we do is when a trainee completes his or her training stint, he or she gets feedback on how well they did, did they manage to learn, how they delivered on their projects.

But equally, the mentors, coaches, tutors are evaluated on whether they have done a good job in building their trainees. If the trainee says that the coach is not worth having, the coach is pulled up. It reflects in his/her annual appraisal. He or she will not get a trainee for the next year. Till he/she promises to pull up his or her performance on how he or she guides a trainee. So it is very serious. Leaders are not only given responsibilities, they are held accountable for it. It is a big job, it is a privilege to train others to become leaders for this company. So if you do it well, fantastic. If you don't do it well, then you are not going to get another trainee unless you commit to improve and focus on developing leadership talent.

That sounds a bit severe on the trainer, doesn't it?

It's the little things through which we build the seriousness that makes the difference. So people know about the business leadership training and the fact that we send people on a rural stint to get a real understanding of rural India which forms a bulk of our consumers; equally they go on an international stint to get exposure to working across cultures and geographies … this is a holistic programme designed to give trainees exposure across the business and we manage it with rigour and discipline. I still remember the best moments in this company when I was a management trainee, living in a village, understanding what it takes to influence and change, even if it is some 500 people in a little village in India with no roads to reach there. These are life transforming experiences as a leader. So while all of that is there, little things that we do to push rigour, to make sure that this is done seriously, that makes all the difference. The evaluation system ensures that people are learning, and if they are not learning, others are being held accountable; it's the totality of things that makes all the difference.

How do you make that assessment that ensures people are learning all the while?

We have processes like leadership differentiation, which is a nine-box matrix where every person is plotted in the relevant groups. So all general managers will be plotted together, executives on a particular of kind of job will be plotted together to see who really are the top guys, who have the potential to go to the next level and who are sustained high-performers. Normally, you are plotted after you have done about three years in the company. Because we believe that it takes you about a year to learn your job when you come in and another year to begin contributing and the third year to see the impact of your contribution.

So I think the whole philosophy of ‘leaders building leaders' is the number one reason why people feel that this is the place that I would like to be a part of. Because they really see investment in the leadership development and it has been done consistently for some time. Today, we have 400-plus CEOs in India who are ex-HUL. It is because of this: from the day they join, the focus is on leadership, training and building.

One of our beliefs is that while performance is very important, it's not the only thing. The way you display leadership is equally important. So if you look at the nine-box matrix, it measures both; it measures performance and it measures how you are doing as a leader. And that is measured in two or three different ways. A 100 per cent of the company goes through a 360 degree feedback.

So Shaweta (gesticulating to Shaweta Pandey, employee services head, also present) is the team leader for the employee services. She gets the score for how her 12 people have rated her. So I would know instantly whether Shaweta as a leader is doing a great job, because the 360 degree feedback would tell me how others perceive her and the difference she is making. Her immediate team feedback is also important. You could have a fantastic track record, but if people have really poor feedback to give you about you as a team leader, if your people feel terrible, if there is huge attrition in a team…all that is measured.

If a trainee comes and says she wants to work with her again, all these behavioural feedback is brought into the discussions. So performance is very important; you cannot even get on the list if you are not a real performer, but that alone is not enough to guarantee you being seen as a future leader of this organisation. That's the first tenet: Leadership development.

Can you give us an anecdote of what you would consider as leadership and commitment in this organisation?

There is an inspiring story about a colleague Mukundan that we have shared with our employees also in internal workshops. He was in QA, and went to a shop where he found our stock was not there. He came and found out why the stock was not there, worked with the sales-team, supply-chain team and got full stock into the shop. He gave his number to the shop-keeper saying any day he could call him, and assured him that he was going to check the shop every day on the stocks. He was doing this for two to three months. An amazing story. A young man in the company, but look at the passion and commitment that he had to make sure that HUL was represented in that shop.

One of our staffers gave us an idea of how the soap wrapper used to be kept by her mother in between her sarees, because of the perfume and that gave us the thought that we should invest more on the perfume in the wrapper as that would be enhancing the consumer experience of the product.

And, do employees know that their performance is being tracked right through?

The beautiful thing about this is the transparency with which it is done. Every person gets a performance and capability card. This is an e-card, you can download it, which tells you everything you need to know, how you are rated, whether you are a ‘lister' (a company phrase for fast-track leaders), which box of the matrix you are in, what is your potential, what is your likely next job, what does the company think about your potential, what is the kind of development plan that you have… So every person has clarity, where he or she stands. This is shared transparently. I can't think of any other organisation which has so much transparency for employees telling them how they are perceived by the organisation.

(To be continued)

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