New Delhi: State-owned enterprises have for long been perceived as symbols of bureaucratic red tape and sloth, least expected to value performance efficiency.
That is changing. As the economy grows at its slowest pace in six years, forcing businesses to review and prune their spending on executive education, public sector units, or PSUs, are sustaining their participation in management development programmes at B-schools.
Changing focus: (from left) N.C. Patnaik, chairperson, management development programmes, C.S. Venkata Ratnam, director, and S. Garimella, faculty coordinator for some executive education programmes, at the International Management Institute’s campus in New Delhi. Harikrishna Katragadda / Mint
Deepak Chandra, associate dean of Centre for Executive Education at Indian School of Business, or ISB, Hyderabad, explains how PSUs are a good example of sectors to focus on in today’s business environment. The impact is relatively lesser here, and these enterprises are serious about investing in learning, he says. Executive education programmes gained momentum in the 1970s when management teachers such as S. Manikutty at the Indian Institute of Management, Ahmedabad (IIM-A) saw an opportunity in working professionals furthering their careers by acquiring new skills.
“Companies increasingly felt the need to train people in managerial concepts and techniques for formulating and implementing strategies,” he says. That’s when B-schools began ramping up their syllabi to attract executives from private enterprise.
Today, it’s the PSUs they are targeting for enrolment. PSU participation, both in short-term management development courses and long-duration programmes for working professionals, has traditionally been for training in general streams— marketing, finance, strategy and human resource management. But even in courses with general themes, the training needs of PSUs have shifted from being a “routine ritual” to “a more serious business of acquiring managerial and leadership skills,” says Abhishek Nirjar, chairperson for management development programmes at IIM Lucknow.
PSU interest in enhancing executive skills is most evident in sectors that have become less regulated in recent years, such as oil and gas exploration and coal mining. “Earlier, these companies would wait for government to give orders. If the orders didn’t come, they wouldn’t bother (about performance). Now, they are going all out to maximize their potential...with least government interference and increased competition,” says C.S. Venkata Ratnam, director, International Management Institute, or IMI, New Delhi.
Better placed: Public sector units are less affected by the economic slowdown than private companies, says ISB’s Chandra. Bharath Sai / Mint
IMI developed a six-month programme in marketing on demand from several public sector companies and also a week-long course on change management for Coal India Ltd (CIL) emphasizing effective use of company resources.
Coal India, Ratnam says, was a classic case of a near-monopoly until the entry of private competition. It is now competing globally and was among the five largest state-run companies that signed an agreement last month to acquire coal mines across the world through a joint venture. “When you are a monopoly, you don’t care much about production and operational costs. With competition, you do,” he says.
At IIM Calcutta (IIM-C), Indian Oil Corp. Ltd, power generator NTPC Ltd and Steel Authority of India Ltd (SAIL) have identified programmes that help them strategize better in a competitive marketplace. “Many...are also using management development programmes as (a) retention and motivation policy for their employees,” says Ashok Banerjee, chairman, management development programmes at IIM-C.
IIM-L’s four-week global leadership programme for Oil and Natural Gas Corp. Ltd (ONGC), the country’s biggest oil explorer and producer, helped 25 general managers study the best practices of firms in Europe. ONGC is also training its senior-level employees at the Management Development Institute (MDI) in Gurgaon, along with NTPC and continues to be a regular client for the Institute of Management Technology (IMT), Ghaziabad, for six-month programmes in project management.
Many PSUs, B-schools point out, are struggling to complete projects on time and to cut costs—measures that require specific skills. Indian Railways, for example, has sent its senior employees to both ISB and IIM-L for short-duration programmes to acquire such skills. “Indian Railways is working towards (becoming) a more customer-centric and efficient organization with global dimensions,” says Nirjar. Other priorities for Indian Railways are to roll out faster trains and make its network accident-free. “IR (Indian Railways), as a government organization, has shown a change in terms of public service. This means it’s embarking on capability development to sustain growth. ISB, therefore, is training on capability development,” says Chandra.
ISB is helping a state-run bank build a specialized team for mergers and acquisitions. In the past, such objectives were not on the agenda of PSUs—but that’s changed. “PSUs don’t have (a)...short-term expectation of results now. They are gearing up for the future,” says Nirjar, adding that the nature of their participation in management programmes has become more “specialization-centric.”
At IIM-A, all businesses have cut down on their participation in management programmes, but PSUs have not, though they may be enrolling more in short-term courses on leadership skills, personality development and career planning. The problem area, as IIM-C’s chairperson for MDPs, points out, is that “PSUs are yet to identify their training needs to maximize benefits from such programmes”.
Nirjar says PSU executives suffer from a mindset problem. “Many senior-level employees from PSUs think they need to be treated as lords,” he says. “When we treat them as students, they don’t like that. Where a private sector participant in management development programmes thinks it’s their employer’s investment on them, PSU employees consider these as rewards,” says Nirjar.
It was only after state-owned Hindustan Zinc Ltd was acquired by the Sterlite Industries group in 2003 that the former PSU took a hard look at its training requirements. As a PSU, it was sending all its staff, including freshers, for induction training at IMI. “Now... it has identified its training needs and is encouraging its experienced executives to attend such programmes...” says Ratnam.
Hindustan Aeronautics Ltd, or HAL, is another example. With plans to expand its market base beyond the Indian Air Force, HAL is now training its senior- and middle-level engineers in management and marketing concepts specific to team-building. In the last two years, the company has trained at least 300 officers at B-schools through 10-day?in-company programmes.
Engineers India Ltd, a government-owned consultancy firm, is training its executives over weekends in month-long programmes on how to penetrate overseas markets. Many firms have cut training budgets this year, says M.C. Agarwal, head of executive education at Narsee Monjee Institute of Management Studies (NMIMS) Mumbai, but PSUs are the ones that continue to endorse both open and in-company programmes.
At IIM-C, the ratio of public and private sector participation in executive education has gone up—from 60:40 to 70:30—this year. “Open management development programmes are being taken up by PSUs because they prefer insight into all companies from all sectors...for an assessment of good and bad practices. Generally, open programmes thrive on companies that do not have a critical mass to afford in-company programmes,” says Ratnam.
S. Garimella, faculty coordinator for some executive education programmes at IMI, says the institute was planning to launch more innovative, open courses in areas such as supply chain management, outsourcing and negotiation skills to attract more participation. “There is (a) demand for programmes which emphasize on layoffs and discipline (rather) than proactive management of industrial relations and talent management,” he adds.
Bharat Electronics Ltd, or BEL, which makes defence equipment, sent 20 employees to a six-month programme in marketing last year at IMI. This year, too, it is back at the school, albeit with a different focus. “They are now into heavy financial re-engineering. Most PSUs have very good engineers and they feel they need to make them good managers,” says Ratnam.
Firms such as NTPC Ltd, the country’s largest producer of thermal power, have raised the qualification level for promotion of employees and are aggressively funding courses.?“We?are increasingly looking at management development programmes as career development measures and also succession planning. Employees are now asked to prepare action plans based on what they learnt at business schools and implement strategies based on that. With increased competition in the energy sector, we can’t remain complacent,” says an NTPC official who attended a programme at a B-school in energy management and didn’t want to be named because he is not authorized to speak to the media.
IMI has also created specialized one-year programmes for officials from the ministry of external affairs. MDI has customized programmes for Indian policymakers. MDI, IMI, IMT and IIM-L have also created programmes specifically for military veterans to help them enter alternative careers once they retire.
But programmes specifically targeted at bureaucrats have been few and far between. For two reasons, Ratnam points out. First, most bureaucrats of the Union government are trained at two prominent government training institutes—Mussoorie and New Delhi—as part of the induction programme. Besides, there are a dozen other institutes, including the National Law School of India University, Bangalore, and Indian Institute of Foreign Trade, or IIFT, New Delhi, that train government personnel.
Second, government departments ask for discounts on fees for executive education programmes, a sore point with most B-schools. “We, in fact, stopped offering any short-term programmes for government departments as it was bringing us (a) bad name. It’s not financially feasible for us to lower our fees for these programmes,” says Ratnam.
For the premium Indian Administrative Service, or IAS, officers though, the Union government’s department of personnel and training makes it mandatory to attend training programmes at various stages in their careers. For this, the department ties up with the Indian Institutes of Management in Ahmedabad, Bangalore and Indore. IIM-A, for example, runs an executive MBA programme for IAS officers with 26-28 years of experience in collaboration with Harvard Kennedy School in the US.