There is no denying that ONGC is the jewel in the crown among Indian public sector enterprises. But, can a jewel continue to be without a regular Chairman-cum-Managing Director? For the past 18 months this seems to be the story of ONGC, as it is the third time in succession that the oil and gas giant has got an interim CMD.
This has raised a series of questions, including the Centre’s intent on the functioning of ONGC and also whether there are no suitable candidates within the organisation to take up the top job. Investors too are miffed over the uncertainty over leadership.
This unhappy situation leaves the interim CMDs spending most of their time reassuring employees and investors that “All is well”.
CMD and Directors are Board level positions, which are presidential appointments done through the Public Enterprises Selection Board process. Since March 31, 2021, when the post of ONGC CMD fell vacant after Shashi Shankar retired, it has been having only an interim chairman.
Critics believe that this is because ONGC doesn’t have a proper succession plan.
But internally, ONGC has been making a lot of staffing changes and today it has a structured approach to succession planning, which works through a programme routing eligible employee nominations for senior management role via three sources.
The first is a system recommendation programme which uses HIPO (identified pool of high potential executives) to nominate employees matching the senior role profile based on level, discipline, experience, performance score, ADC (Assessment Development Centre) score and sectors/locations covered.
The second source is nomination of successor for the position by the identified/nominated position holder, which is based on experience and interactions.
The third is self-application by an executive who considers himself/herself eligible for the vacant position.
The Talent Review Panel (TRP), after evaluating the applications, selects the candidates drawn from various sources.
This TRP consists of the Administrative Director, Functional Director and Director (HR) as members. TRP submits its recommendation to the Executive Committee for final selection of the successor.
Clearly, ONGC has been working towards creating a strong cadre base through a programme called DEEKSHA, to identify and monitor critical talent pool within the organisation.
Apart from that, ONGC has a mechanism of identifying high potential employees through ADCs, which is utilised for Chief General Manager (E7) to ED (E9) promotions, as well as flagship leadership development programmes for senior level executives.
To develop a robust leadership pipeline, ONGC has chalked programmes such as the Leadership Development Programme (for E7 level executives) and Advanced Management Programme (for E6 level executives) at the IIMs, and Young Leaders Programme (for E4-E5 level executives).
Besides this, ONGC has periodically reviewed its organisational structure to relook all the activity/positions (employee roles) in each of the business verticals and their present and future requirement, in consultation with business heads of each strategic unit.
For each activity, risk has been evaluated using dimensions such as financial, human capital, operational, legal, reputational and social. Further changes were carried out in some of the verticals as per requirements of strategic business heads in consultation with HR, in view of the changing business environment during 2018 as well as during the Covid-19 crisis.
Further, ONGC has a well mapped Book of Delegated Powers (BDP), which empowers executives in various business verticals with financial and administrative powers. Delegating authority and segregating duties are the cornerstones of any successful project or scheme.
ONGC has delegated authority and assigned duties with two objectives in mind — empowerment for decision-making and setting out accountability and responsibility associated with each role in the Maharatna. Powers (financial and administrative) are delegated to empower the company executives with authority, so as to achieve the vision of ONGC becoming a global leader in integrated energy landscape.
All these systems have helped the organisation nurture a strong and able cadre base, ready to take up future challenges and help ONGC contribute towards securing energy for India, ONGC claims.
So what went wrong now? Does not having a regular CMD create uncertainty within the organisation and affect the morale? The message down the line is that of insecurity and uncertainty. Besides, the lack of continuity proves a deterrent for the interim head to take forward the vision of the organisation. A regular head has a tenure and better focus on long-term stability of the organisation. As it is, they have a short tenure — may be a year or so. Today, the average age of the workforce in ONGC is around 42 years.
When a company like ONGC, the largest player in the sector, is virtually headless, the focus shifts, said an observer. What is more confounding is the government’s indifference to the situation.
According to RS Sharma, former Chairman and Managing Director, ONGC, “This reflects the mindset of the government about managing the affairs of a public sector undertaking... Many other PSUs are also in similar situation. Besides value loss for the investors, such attitude has a big demoralising effect on the workforce of the enterprise.”
Given the fact that ONGC is an asset, the government must ensure that the right people are working with a right plan guided by a stable board. But to do this the Centre needs to have a clear strategy on how it wants to treat ONGC.