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Sustaining Competitive Advantage
                 Through People
                 - The Practice in ITC


                   NIPM – ISTD SEMINAR
                            June 29, 2012
                               Hyderabad
Sustainability




       Vision and Values
The last 100 years…..
• Unflinching adherence to the tenets of the
“Living Company”


• “Trusteeship” and the desire to build a timeless
“Institution”

• Our “Indian Soul” and “Putting India First”

• Commitment to the “Triple Bottom-Line
ITC’s HR Framework:
Anchored in our Vision and Values
Sustain ITC’s position as one of India’s most
valuable corporations through world-class
performance, creating growing value for the Indian
economy and the Company’s stakeholders

•   Customer-obsessed
•   Competition-differentiated
•   Performance-driven
•   Future-capable
Competitiveness




   Organizational Competence
Growth Strategy
   Profit
                                                 Horizon 3
                                                 Create new capabilities for
                                                 viable businesses in future.

                              Horizon 2
                              Blend skills & competencies residing in
                              different businesses to create new engines of
                              growth


            Horizon 1
            Defend & expand current products, markets,
            capabilities and maintain leadership status

                                                                   Time
Blending our capabilities


       ITD :                 PPD :                               ABD :
                                             Hotels :
Branding, Distribution     Packaging
                                         Understanding of     Sourcing of
     & Mfg Mgt            Competencies
                                           Indian palate      Agri produce




                   Market packaged prepared Foods & Staples



                            The Foods Business
Advantage




    Alignment & Engagement
         (THE ITC WAY)
Mera Hub Mera Plan




          Ownership
  amongst front-line employees
The Governance Structure
• 3 Tier Structure
   – Strategic Supervision by the Board
   – Strategic Management by Corporate Management Committee
   – Executive Management by CEO and Divisional Management
     Committees

• Distributed leadership to ensure focus in a diversified context

• ‘Venture capitalist’ approach by Management Committee

• Businesses are investment centres
Role of Head Office
• A paradigm shift from “How can I control” to “How can I add
  value?”

• Head Office not the apex of a pyramid but a Strategic Centre

• “What additional value are businesses deriving from being
  part of the ITC Group?”

• Therefore, from “controller” to “enabler” and from
  “centralisation” to “empowerment”

• Aligning businesses with Corporate Objectives through
  strategic levers of control
The Report Card
                           1996                     2011
Turnover (US$)             1.14 bn                  6.80 bn                      500%
PAT (US$)                  0.06 bn                  1.11 bn                      1750%
Market Cap                 1.24 bn                  31.2 bn                      3000%

Portfolio                  Cigarettes, Tobacco,     Cigarettes, Tobacco,
                           Paper, Packaging, Hotels Paper, Packaging, Hotels,
                                                    Foods, Personal Care,
                                                    Lifestyle, IT, Education &
                                                    Stationery Products,
                                                    Matches / Agarbatti,
                                                    Rural Marketing, Agri
                                                    Business
Attrition amongst Senior
Management in the last                     Less than 1%
5 years
Average tenure of Senior
                                             25 years +
Management
Top Management             95% joined ITC as Management Trainees
ITC’s Agenda : the next 100 years
• Our collective aspiration is that ITC continues
  to remain a relevant institution

• The people of ITC must believe in the concept
  of “virtuousness” – the most ennobling
  behaviours and outcomes, the essence of
  human kind, the highest aspirations of human
  beings
The next 100 years…..
Our people must ask themselves not only whether
they are achieving their goals and creating value,
but must also ask:

  –Are we fostering our finest?
  –Are we pursuing the highest human potential?
  –What is the highest in us?
  –What is the best thing to do?
  –How can we leave a legacy of value?
The HR Agenda


 Nurture an organisation where people seek
     not only profit, prestige or power,
              but beyond !!!



  Compassion, Wisdom and Fulfillment
Thank you

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NIPM ISTD SEMINAR 2012 - ITC ABD

  • 1. Sustaining Competitive Advantage Through People - The Practice in ITC NIPM – ISTD SEMINAR June 29, 2012 Hyderabad
  • 2. Sustainability Vision and Values
  • 3. The last 100 years….. • Unflinching adherence to the tenets of the “Living Company” • “Trusteeship” and the desire to build a timeless “Institution” • Our “Indian Soul” and “Putting India First” • Commitment to the “Triple Bottom-Line
  • 4. ITC’s HR Framework: Anchored in our Vision and Values Sustain ITC’s position as one of India’s most valuable corporations through world-class performance, creating growing value for the Indian economy and the Company’s stakeholders • Customer-obsessed • Competition-differentiated • Performance-driven • Future-capable
  • 5. Competitiveness Organizational Competence
  • 6. Growth Strategy Profit Horizon 3 Create new capabilities for viable businesses in future. Horizon 2 Blend skills & competencies residing in different businesses to create new engines of growth Horizon 1 Defend & expand current products, markets, capabilities and maintain leadership status Time
  • 7. Blending our capabilities ITD : PPD : ABD : Hotels : Branding, Distribution Packaging Understanding of Sourcing of & Mfg Mgt Competencies Indian palate Agri produce Market packaged prepared Foods & Staples The Foods Business
  • 8. Advantage Alignment & Engagement (THE ITC WAY)
  • 9. Mera Hub Mera Plan Ownership amongst front-line employees
  • 10. The Governance Structure • 3 Tier Structure – Strategic Supervision by the Board – Strategic Management by Corporate Management Committee – Executive Management by CEO and Divisional Management Committees • Distributed leadership to ensure focus in a diversified context • ‘Venture capitalist’ approach by Management Committee • Businesses are investment centres
  • 11. Role of Head Office • A paradigm shift from “How can I control” to “How can I add value?” • Head Office not the apex of a pyramid but a Strategic Centre • “What additional value are businesses deriving from being part of the ITC Group?” • Therefore, from “controller” to “enabler” and from “centralisation” to “empowerment” • Aligning businesses with Corporate Objectives through strategic levers of control
  • 12.
  • 13.
  • 14. The Report Card 1996 2011 Turnover (US$) 1.14 bn 6.80 bn 500% PAT (US$) 0.06 bn 1.11 bn 1750% Market Cap 1.24 bn 31.2 bn 3000% Portfolio Cigarettes, Tobacco, Cigarettes, Tobacco, Paper, Packaging, Hotels Paper, Packaging, Hotels, Foods, Personal Care, Lifestyle, IT, Education & Stationery Products, Matches / Agarbatti, Rural Marketing, Agri Business Attrition amongst Senior Management in the last Less than 1% 5 years Average tenure of Senior 25 years + Management Top Management 95% joined ITC as Management Trainees
  • 15. ITC’s Agenda : the next 100 years • Our collective aspiration is that ITC continues to remain a relevant institution • The people of ITC must believe in the concept of “virtuousness” – the most ennobling behaviours and outcomes, the essence of human kind, the highest aspirations of human beings
  • 16. The next 100 years….. Our people must ask themselves not only whether they are achieving their goals and creating value, but must also ask: –Are we fostering our finest? –Are we pursuing the highest human potential? –What is the highest in us? –What is the best thing to do? –How can we leave a legacy of value?
  • 17. The HR Agenda Nurture an organisation where people seek not only profit, prestige or power, but beyond !!! Compassion, Wisdom and Fulfillment