Uncertainty has become the new certainty. A teetering economy coupled with policy paralysis provide for a perfect ground as to how India Inc. can turn the crisis into an opportunity by investing in people.

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Interesting facts!
•S&P has raised questions over India’s economy, which is hit by high government borrowing, rising
imports and political compulsions that have stalled reforms in key areas.
•An ETIG analysis shows that the share of employee cost in total revenue for BSE -500 companies
dipped from about 8.4% in FY’11 to 7.8% in FY’12; the lowest since FY’08.
•Leaders in tough times are expected to make prudent financial & organizational decisions,
communicate effectively with the customers and employees and instill confidence in their teams.
•Management should use times of uncertainty as an opportunity to invest in HR initiatives that are
fundamental to the organization’s growth and sustainability.

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5 Action Points for Leaders
•Be honest and communicate - An effective communication helps decode the downtrend, the
causation variables and the likely recovery variables.
•Motivate and instill confidence - The challenge of holding on to great teams and keeping
them motivated does not go away when the economy is in for a slowdown.
•Believe in people, build capability - Progressive leaders realize that in a tough and
challenging business times, people are the organization’s core strength; they will define and
deliver the blueprint to recovery, success and sustained growth
•Invest in people - Conserving costs should not imply reducing spending on training and talent
management initiatives.
•Don’t let crisis go waste - A crisis presents unique opportunities too, and leaders must see to
it that the crisis phase does not go waste. It is herein that they must look inwards and focus
on their core competencies and discover opportunities for recovery and growth.

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“External vulnerability provides
opportunities and threats, and
leaders must understand both;
prepare the organization and people
to overcome threats and convert
opportunities into business results
and growth.”
We believe that the economic
scenario is concerning but not
grave as yet. We may however, see
the
situation worsening if investment
and concomitant industrial activity
do not pick up in the next 2
quarters. Government may have to
restart the economic stimulus and
also prevent subsidies from
ballooning. Given the present state
of policy and politics, it may be a
tough act to pull off.
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We see a big talent development opportunity in this tough environment. Despite the overall external
challenges, we are on a growth trajectory and recognize the importance of ‘people and capability’ in
fuelling growth. We will therefore invest in building and sharpening our people and capability, through
training, experiential learning and excellence in execution.
Increasing employee trust and confidence should be the primary focus of organizations during such
tough times. Communication plays a vital role and companies need to reach out to people to
understand their apprehensions/concerns. Equally leaders need to be open and transparent in all
round communication. Business leaders need to explain to employees the business realities, external
environment, competition, etc. Communication with rationale/data can help organizations to increase
employees trust.
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Motivation comes from within. Not from a manual or
a set of instructions. We are all chasing a dream at
IndiGo.
We have a phenomenal learning and development
team at our learning academy called ‘i-fly’. The
dedicated leadership related coaching vertical at i-fly
along with the folks at HR, are the people who work
the magic.
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“The people strategy should always
be looked at from the medium to
long-term perspective. Kneejerk
reactions on people-related
decisions should never be taken”
The current economic situation is
impacting the automobile industry
but it is a more of a temporary blip
and in the long term 12 -15 percent
CAGR growth would be the trend in
India. Typically in the current
situation when we look at the
dynamic changes and the global
crisis, we can compare it to the
situation in the last economic
slowdown after which we saw the
recovery and 20-30 percent growth
in 2008-09. This kind of volatile
business environment requires a
different leader
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“At the time of uncertainty, the management must be
open and honest.”
Being transparent and clearly communicating with
employees on the prevailing macroeconomic
sentiments, health of the business and impressing upon
them the importance of their contributions to the
company, is critical. At the time of uncertainty, it is
paramount that the management be open and honest
about the prevailing conditions and the measures taken
to address them. Effort must be made to make
employees feel they are part of a broader vision and
that their contributions matter.
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9. For Further Information
Kindly Contact
+91 (124) 4148102
info@ peoplematters.in
www.peoplematters.in
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Let’s not waste a good crisis
July 2012
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