PM Ch-2 Manpower Planning

Manpower Manpower PlanningPlanning

CASE STUDY: HRP? NO , THANK CASE STUDY: HRP? NO , THANK YOU.YOU.

This has been the attitude of several organizations, more so This has been the attitude of several organizations, more so in universities. Facts speak louder. It was late 1990s. A in universities. Facts speak louder. It was late 1990s. A reputed South Indian University appointed 218 people on reputed South Indian University appointed 218 people on temporary basis as group ‘D’ and group ‘C’ employees (all in temporary basis as group ‘D’ and group ‘C’ employees (all in administration, typically called non-teaching). They were administration, typically called non-teaching). They were initially paid Rs750 per month each, which was later initially paid Rs750 per month each, which was later increased to Rs1575 per month . These appointments were increased to Rs1575 per month . These appointments were made though there was no need for additional staff . In made though there was no need for additional staff . In fact ,the university already had surplus of theses employees fact ,the university already had surplus of theses employees who together have been eating away 22 percent of the annual who together have been eating away 22 percent of the annual budget allocations.budget allocations.

33 percent of these temporary staff have already put in more 33 percent of these temporary staff have already put in more than 10 years of service and the remaining, a couple of years than 10 years of service and the remaining, a couple of years less. The services of 35 percent of them were renewed six less. The services of 35 percent of them were renewed six monthly with a break of one day each time . The services of monthly with a break of one day each time . The services of 65 percent of the temporary employees were extended “until 65 percent of the temporary employees were extended “until further order”. In the past ten plus years, that “further order” further order”. In the past ten plus years, that “further order” never came.never came.

The procedure followed to appoint these 218 was The procedure followed to appoint these 218 was slipshod . You only needed to go the Vice-Chancellor with a slipshod . You only needed to go the Vice-Chancellor with a white paper with the name of the prospective employee white paper with the name of the prospective employee being scribbled on it. He or she would be taken in.being scribbled on it. He or she would be taken in.

The conscience of the authorities is now pricked. They have The conscience of the authorities is now pricked. They have realized their guilt of violating Equal Remuneration Act and realized their guilt of violating Equal Remuneration Act and suppressing the human rights. What to do with these 218 suppressing the human rights. What to do with these 218 temporary staff who have been slogging for years drawing temporary staff who have been slogging for years drawing wages which are a pittance?wages which are a pittance?

The university can dismiss services of 33 percent of the The university can dismiss services of 33 percent of the temporary staff as there have been breaks in their services. temporary staff as there have been breaks in their services. Do you think these people will take such dismissals easily and Do you think these people will take such dismissals easily and lightly ? Where is the guarantee that some of them will not lightly ? Where is the guarantee that some of them will not commit the same act as Khan and Dalvi did (see opening case to commit the same act as Khan and Dalvi did (see opening case to the first chapter ). Can an educational institution act like the first chapter ). Can an educational institution act like business enterprise and hire and fire people? business enterprise and hire and fire people?

With regard to the 67 percent of the transient staff , the With regard to the 67 percent of the transient staff , the university cannot possibly terminate their services, as there university cannot possibly terminate their services, as there were no breaks. were no breaks.

Recently , the university made a decision to regularize the Recently , the university made a decision to regularize the services of the provisional employees as and when vacancies services of the provisional employees as and when vacancies arise – vacancies and these would be filled up soon. This would arise – vacancies and these would be filled up soon. This would cost the university an extra expenditure of Rs 30 lakh per cost the university an extra expenditure of Rs 30 lakh per annum. When the remaining are also regularized, the extra drain annum. When the remaining are also regularized, the extra drain on the university exchequer would be Rs 1.2 crores per annum! on the university exchequer would be Rs 1.2 crores per annum!

When reminded about human resource planning and about its When reminded about human resource planning and about its need, prompt came the reply from an employee who is going to need, prompt came the reply from an employee who is going to be benefited shortly – “Human Resource planning? be benefited shortly – “Human Resource planning?

No . Thank You”.No . Thank You”.

Objectives Objectives & &

Methods of Manpower Methods of Manpower PlanningPlanning

ConceptConceptColemanColeman““The process of determining manpower The process of determining manpower requirement and the means for meeting those requirement and the means for meeting those requirements in order to carry out the integrated requirements in order to carry out the integrated plan of the organisation.”plan of the organisation.”

StainerStainer““Strategy for the acquisition, utilisation, Strategy for the acquisition, utilisation, improvement and preservation of an enterprise’s improvement and preservation of an enterprise’s human resources. It relates to establishing job human resources. It relates to establishing job specification or the quantitative requirements of specification or the quantitative requirements of jobs determining the number of personnel jobs determining the number of personnel required and developing sources of manpower.”required and developing sources of manpower.”

Manpower Planning consists of a series of Manpower Planning consists of a series of activities:activities:

(a) Forecasting future manpower requirements, either (a) Forecasting future manpower requirements, either in terms of mathematical projections of trends in the in terms of mathematical projections of trends in the economic environment and development in industry.economic environment and development in industry.

(b) Making an inventory of present manpower (b) Making an inventory of present manpower resources and assessing the extent to which these resources and assessing the extent to which these resources are employed optimally.resources are employed optimally.

(c) Anticipating manpower problems by projecting (c) Anticipating manpower problems by projecting present resources into the future and comparing present resources into the future and comparing them with the forecast of requirements to determine them with the forecast of requirements to determine their adequacy, both quantitatively and qualitatively;their adequacy, both quantitatively and qualitatively;

(d) Planning the necessary of requirement, selection, (d) Planning the necessary of requirement, selection, training, development, utilization, transfer, training, development, utilization, transfer, promotion, motivation and compensation to ensure promotion, motivation and compensation to ensure that future manpower requirement are properly met.that future manpower requirement are properly met.

Objective of Manpower Objective of Manpower PlanningPlanning

The objective of manpower planning is to maintain The objective of manpower planning is to maintain and improve the organisation’s ability to achieve and improve the organisation’s ability to achieve its goal by developing strategies that will result in its goal by developing strategies that will result in optimum contribution of human resources. For this optimum contribution of human resources. For this purpose, Stainer recommended the following nine purpose, Stainer recommended the following nine strategies for the manpower planners.strategies for the manpower planners.(a) They should collect, maintain and interpret (a) They should collect, maintain and interpret relevant information regarding human resources;relevant information regarding human resources;(b) They should report periodically manpower (b) They should report periodically manpower objectives, requirements and existing employment objectives, requirements and existing employment and allied features of manpower;and allied features of manpower;(c) They should develop procedures and techniques (c) They should develop procedures and techniques to determine the requirements of different types of to determine the requirements of different types of manpower over a period of time from the manpower over a period of time from the standpoint of organisation goals;standpoint of organisation goals;

(d) They should develop measures of manpower (d) They should develop measures of manpower utilisation as component of forecasts of manpower utilisation as component of forecasts of manpower requirements along with independent validation;requirements along with independent validation;(e) They should employ suitable techniques leading to (e) They should employ suitable techniques leading to effective allocation of work with a view to improving effective allocation of work with a view to improving manpower utilisation;manpower utilisation;(f) They should conduct research to determine factors (f) They should conduct research to determine factors hampering the contribution of the individuals and hampering the contribution of the individuals and groups to the organisation with a view to modifying or groups to the organisation with a view to modifying or removing these handicaps;removing these handicaps;(g) They should develop and employ methods of (g) They should develop and employ methods of economic assessment of human resources reflecting its economic assessment of human resources reflecting its features as income-generator and cost and accordingly features as income-generator and cost and accordingly improving the quality of decision affecting the improving the quality of decision affecting the manpower;manpower;(h) They should evaluate the procurement, promotion (h) They should evaluate the procurement, promotion and retention of the effective human resource;and retention of the effective human resource;(i) They should analyse the dynamic process of (i) They should analyse the dynamic process of recruitment, promotion and loss to the organisation and recruitment, promotion and loss to the organisation and control these processes with a view to maximising control these processes with a view to maximising individual and group performance without involving individual and group performance without involving high cost.high cost.

Benefits of Manpower Benefits of Manpower PlanningPlanning

(i) Upper management has a better view of the (i) Upper management has a better view of the human resources dimensions of business human resources dimensions of business decisions;decisions;

(ii) Personnel costs may be less.(ii) Personnel costs may be less.

(iii) More time is provided to locate source talent;(iii) More time is provided to locate source talent;

(iv) Better opportunities exist to include women (iv) Better opportunities exist to include women and minority groups in future growth plans;and minority groups in future growth plans;

(v) Better planning of assignments to develop (v) Better planning of assignments to develop managers can be done;managers can be done;

(vi) Major and successful demands on local labour (vi) Major and successful demands on local labour market can be done.market can be done.

Methods Of Manpower Methods Of Manpower PlanningPlanning

1. HR Demand Forecast1. HR Demand Forecast2. HR Supply Forecast2. HR Supply Forecast

1. HR Demand Forecast1. HR Demand ForecastDemand forecasting is the process of estimating the Demand forecasting is the process of estimating the future quantity and quality of people required. future quantity and quality of people required. Demand forecasting must consider several factors – Demand forecasting must consider several factors – both external as well as internal. both external as well as internal. External factors are competition (foreign and External factors are competition (foreign and domestic), economic climate, laws and regulatory domestic), economic climate, laws and regulatory bodies, changes in technology and social factors.bodies, changes in technology and social factors.Internal factors include budget constraints, production Internal factors include budget constraints, production levels, new products and services, organisational levels, new products and services, organisational structure and employee separations.structure and employee separations.

Techniques of HR Demand Techniques of HR Demand ForecastingForecasting

RegressionAnalysis

Ratio TrendAnalysis

ManagerialJudgement

HR DemandForecast

Work StudyTechniques

DelphiTechnique

FlowModels

Others

Forecasting TechniquesForecasting Techniques1. Managerial Judgement1. Managerial Judgement

2. Ratio – Trend Analysis2. Ratio – Trend Analysis

3. Regression Analysis3. Regression Analysis

4. Work Study Techniques4. Work Study Techniques

5. Delphi Technique5. Delphi Technique

6. Flow Models6. Flow Models

7. Others7. Others

2. HR Supply Forecast2. HR Supply ForecastSupply forecasting the number of people likely to be available Supply forecasting the number of people likely to be available from within and outside an organisation, after making from within and outside an organisation, after making allowance for absenteeism, internal movements and allowance for absenteeism, internal movements and promotions, wastage and changes in hours and other promotions, wastage and changes in hours and other conditions of work.conditions of work.Reason for supply forecast are that it:Reason for supply forecast are that it:(i) Helps quantify number of people and positions expected to (i) Helps quantify number of people and positions expected to be available in future to help the organisation realise its plans be available in future to help the organisation realise its plans and meet its objectives;and meet its objectives;(ii) Helps clarify likely staff mixes that will exist in the future;(ii) Helps clarify likely staff mixes that will exist in the future;(iii) Assess existing staffing levels in different parts of the (iii) Assess existing staffing levels in different parts of the organisation;organisation;(iv) Prevents shortage of people where and when they are (iv) Prevents shortage of people where and when they are most needed;most needed;(v) Monitors expected future compliance with legal (v) Monitors expected future compliance with legal requirements of job reservations.requirements of job reservations.

The Supply analysis covers:The Supply analysis covers:1. Existing human resources1. Existing human resources2. Internal sources of supply2. Internal sources of supply3. External sources of supply3. External sources of supply

1. Existing analysis covers1. Existing analysis covers(i) Present Employees(i) Present Employees(ii) Skills Inventories(ii) Skills Inventories(iii) Management Inventories(iii) Management Inventories

2.Internal sources of supply2.Internal sources of supply(i) Inflows and Outflows(i) Inflows and Outflows(ii) Turnover Rate(ii) Turnover Rate(iii) Condition of work and absenteeism(iii) Condition of work and absenteeism(iv) Productivity Level(iv) Productivity Level(v) Movement Among Jobs.(v) Movement Among Jobs.

3. External sources of supply3. External sources of supply

Procedure Procedure &&

Approval of Manpower Approval of Manpower PlanningPlanning

Process of Manpower Process of Manpower PlanningPlanning

1.1. Deciding goals or objectives;Deciding goals or objectives;2.2. Estimating future organisational Estimating future organisational

structure and manpower structure and manpower requirement,requirement,

3.3. Auditing human resources;Auditing human resources;4.4. Planning job requirement and job Planning job requirement and job

description;description;5.5. Developing a human resource plan.Developing a human resource plan.

1. Objectives of Human Resource Planning1. Objectives of Human Resource PlanningHuman resource planning fulfils individual, Human resource planning fulfils individual, organisational and national goals; but according to organisational and national goals; but according to Sikula, “the ultimate mission or purpose is to Sikula, “the ultimate mission or purpose is to relate future human resources to future enterprise relate future human resources to future enterprise needs so as to maximise the future return on needs so as to maximise the future return on investment in human resources.”investment in human resources.”

Human Resource Planning SystemHuman Resource Planning SystemLONG-RANGEOBJECTIVESAND PLANS

OVERALLREQUIRE-MENTFORHUMAN RESOURCE

INVENTORYOF PRESENTHUMANRESOURCES

NET NEWHUMANRESOURCESREQUIRE-MENT

ACTIONPROGRMS. FORRECRUITING& SELECTIONOF NEEDEDPERSONNEL

PROCEDURESFOREVALUATING-EFFECTIVE-NESS OFHUMANRESOURCEPLANNING

SHORT-TERMGOALS, PLANSPROGRAMS& BUDGETS

WORK FORCEREQUIRE-MENT BYOCCUPATIONALCATEGORIES,JOB SKILLS,DEMOGRAPHIC

INVENTORYBY OCCUPATIONALCATEGORIES,JOB SKILLS,DEMOGRAPHICCHARACTER

NEEDEDREPLACEMENTS ORADDITIONS

PLANS FORDEVELOPING,UPGRADING,TRANSFERRING,IN RECRUIT& SELECTIONOF NEEDEDPEOPLE

2. Estimating the Future Organisational Structure 2. Estimating the Future Organisational Structure OR Forecasting the Manpower Requirements:OR Forecasting the Manpower Requirements:The management must estimate the structure of the The management must estimate the structure of the organisation at a given point in time. For this estimate, organisation at a given point in time. For this estimate, the number and type of employees needed have to be the number and type of employees needed have to be determined. Many environmental factors affect this determined. Many environmental factors affect this determination. They include business forecasts, determination. They include business forecasts, expansion and growth, design and structural changes, expansion and growth, design and structural changes, management philosophy, government policy, product management philosophy, government policy, product and human skills mix and competition.and human skills mix and competition.

3. Auditing Human Resources3. Auditing Human Resources::Once the future human resource needs are estimated, Once the future human resource needs are estimated, the next step is to determine the present supply of the next step is to determine the present supply of manpower resources. This is done through what is manpower resources. This is done through what is called “Skills Inventory.” A skills inventory contains called “Skills Inventory.” A skills inventory contains data about each employee’s skills, abilities, work data about each employee’s skills, abilities, work preference and other items of information which preference and other items of information which indicate his overall value to the company.indicate his overall value to the company.

Skills Inventory ProformaSkills Inventory ProformaPersonal FactorsPersonal Factors

Name Name Birth placeBirth placeAgeAge Occupation of parentsOccupation of parentsSexSex Present addressPresent addressDependantsDependants permanent addresspermanent addressMarital statusMarital status Telephone number Telephone number

Education and TrainingEducation and TrainingSchool attended with yearsSchool attended with yearsDegrees/Diploma obtainedDegrees/Diploma obtainedTraining achievedTraining achieved

Experience and SkillsExperience and SkillsJob areasJob areas Special skills (such as ability to speak/write Special skills (such as ability to speak/write foreign foreign

languages) languages) Job TitlesJob Titles Reasons for leaving supervisoryReasons for leaving supervisoryJob datesJob dates responsibilitiesresponsibilities

Additional InformationAdditional InformationSalarySalary Test resultsTest resultsGradeGrade Performance ratingsPerformance ratingsAbsenteeism recordAbsenteeism record Location of relativesLocation of relativesDisciplinary recordDisciplinary record Appraisal dataAppraisal dataCareer plansCareer plans Any other informationAny other information

4. Job Analysis4. Job AnalysisAfter having decided how many person, would be After having decided how many person, would be needed, it is necessary to prepare a job analyse, needed, it is necessary to prepare a job analyse, which records details of training, skills, which records details of training, skills, qualification, abilities, experience and qualification, abilities, experience and responsibilities etc. which are needed for a job.responsibilities etc. which are needed for a job.

5. Developing a Human Resource Plan5. Developing a Human Resource PlanThis refers to the development and This refers to the development and implementation of the HR plan. Mainly, it implementation of the HR plan. Mainly, it comprises of determining the sources of getting comprises of determining the sources of getting the right people and therefore, a policy on whether the right people and therefore, a policy on whether to go out for getting new people or look with the to go out for getting new people or look with the organisation. Though transfer, promotions, organisation. Though transfer, promotions, temporary assignments etc also the requirements temporary assignments etc also the requirements can be fulfilled.can be fulfilled.

Responsibility of Manpower Responsibility of Manpower PlanningPlanning

1. To assist, counsel and pressurise the operating 1. To assist, counsel and pressurise the operating management to plan and establish objectives;management to plan and establish objectives;

2. To collect and summaries data in total 2. To collect and summaries data in total organisation terms and to ensure consistency with organisation terms and to ensure consistency with long-range objectives and other elements of the long-range objectives and other elements of the total business plan;total business plan;

3. To monitor and measure performance against 3. To monitor and measure performance against the plan and keep the top management informed the plan and keep the top management informed about it;about it;

4. To provide the research necessary for effective 4. To provide the research necessary for effective manpower and organisational planning.manpower and organisational planning.

Factors Influencing Factors Influencing Manpower Planning & Manpower Planning &

ImportanceImportance

Factors Affecting Manpower Factors Affecting Manpower PlanningPlanning

Type & QualityOf Forecasting

Information

Type andStrategy of

Organisation OrganisationalGrowth Cycle And Planning

EnvironmentalUncertainties

TimeHorizons

ManpowerPlanning

OutsourcingNature ofJobs being

Filled

Factors Affecting Factors Affecting Manpower PlanningManpower Planning

1. Type and Strategy of Organisation1. Type and Strategy of Organisation2. Organisational Growth Cycles and 2. Organisational Growth Cycles and

PlanningPlanning3. Environmental Uncertainties3. Environmental Uncertainties4. Time Horizons4. Time Horizons5. Type and Quality of Forecasting 5. Type and Quality of Forecasting

InformationInformation6. Nature of Jobs being Filled6. Nature of Jobs being Filled7. Outsourcing7. Outsourcing

Importance Of Manpower Importance Of Manpower PlanningPlanning

1. Future Personnel Needs1. Future Personnel Needs2. Part of Strategic Planning2. Part of Strategic Planning3. Creating Highly Talented Personnel3. Creating Highly Talented Personnel4. International Strategies4. International Strategies5. Foundation For Personnel Functions5. Foundation For Personnel Functions6. Increasing Investments in Human 6. Increasing Investments in Human

ResourcesResources7. Resistance to Change and Move7. Resistance to Change and Move8. Other Benefits8. Other Benefits

Succession PlanningSuccession Planning&&

Its BenefitsIts Benefits

Succession PlanningSuccession PlanningSuccession Planning is a systematic process of identifying Succession Planning is a systematic process of identifying and developing talent in the organisation with the explicit and developing talent in the organisation with the explicit purpose of filling vacancies arising in the leadership position purpose of filling vacancies arising in the leadership position in the organisation.in the organisation.

A succession planning system would enable the organisation A succession planning system would enable the organisation to create a pool of talent, which will be groomed to take to create a pool of talent, which will be groomed to take leadership positions in the company. It aims to build an leadership positions in the company. It aims to build an inventory of key managerial candidates in terms of their inventory of key managerial candidates in terms of their leadership style, skills, gap and ultimate potential and design leadership style, skills, gap and ultimate potential and design an advancement plan for each candidate and incorporate it an advancement plan for each candidate and incorporate it into his/her performance management process.into his/her performance management process.

Succession planning addresses executive development, Succession planning addresses executive development, contingency planning and career development needs contingency planning and career development needs throughout the organisation.throughout the organisation.

Succession Planning helps to:Succession Planning helps to:1. Ensure the success of the business.1. Ensure the success of the business.2. Ensure leadership continuity and quality.2. Ensure leadership continuity and quality.3. Define leadership requirements and skills at all levels of 3. Define leadership requirements and skills at all levels of the organisation.the organisation.4. Build a leadership pipeline with a selection process to 4. Build a leadership pipeline with a selection process to choose the best talent for vacancies.choose the best talent for vacancies.5. Strengthen and diversify the pool of employees.5. Strengthen and diversify the pool of employees.6. Identify talent early and develop accordingly.6. Identify talent early and develop accordingly.7. Provide a clear vision of a career for employees.7. Provide a clear vision of a career for employees.8. Making criteria for advancement more visible and 8. Making criteria for advancement more visible and objective.objective.9. Identify strength and gaps in executive talents and skills.9. Identify strength and gaps in executive talents and skills.10. Communicating commitment to high potentials.10. Communicating commitment to high potentials.11. Further, all succession management processes are 11. Further, all succession management processes are closely aligned with all other Human resources initiatives, closely aligned with all other Human resources initiatives, present and future.present and future.

Succession Planning ProcessSuccession Planning ProcessRole Vacant

Step 1: Review RoleRequirement

(Skills & Competencies)

ReplacementChart

Available

Step 2:Review Replace-

Ment Charts

Step 3:Review Replace-Ment Candidate

Profiles

Step 4:Identify

BestSuccessor

Nos. availability ofcandidate

Step 2:Review the Talent Pool

Step 3:Identify Replace-Ment Candidate

Step 4:Identify

BestSuccessor

Nos. availability ofcandidate

ExternalRecruiting

OutsideTalent

Desired

Succession Planning Succession Planning ProcessProcess

Step IStep I Identify key/critical roles and role specific Identify key/critical roles and role specific competenciescompetencies

keeping in mind future business direction.keeping in mind future business direction.Step IIStep II Identify possible source roles from where critical Identify possible source roles from where critical

roles roles can be filled.can be filled.Step IIIStep III Assess source role incumbents on performance Assess source role incumbents on performance

andand potential, create talent pool.potential, create talent pool.Step IVStep IV Develop Succession Plans. Develop Succession Plans.Step VStep V Gap analysis and Development Planning. Gap analysis and Development Planning.

CASE STUDY : PROMOTING THE CASE STUDY : PROMOTING THE PROTEGEPROTEGEThe die was cast. Prem Nath Divan, executive chairman of Vertigo, The die was cast. Prem Nath Divan, executive chairman of Vertigo,

the country’s largest engineering project organisation, decided to the country’s largest engineering project organisation, decided to switch tracks for a career in academics. Divan was still six years switch tracks for a career in academics. Divan was still six years short of the company’s retirement age of 65. His premature exit was short of the company’s retirement age of 65. His premature exit was bound to create a flutter at the Vertigo board. Having joined Vertigo bound to create a flutter at the Vertigo board. Having joined Vertigo as a management trainee soon after college, he had gradually risen as a management trainee soon after college, he had gradually risen through the hierarchy to take a board position as the marketing through the hierarchy to take a board position as the marketing director of the firm at 32. He had become the president five years director of the firm at 32. He had become the president five years later and the youngest chairman of the company at 45. But, by the later and the youngest chairman of the company at 45. But, by the time he was 50, the whizkid had acquired a larger than life image of time he was 50, the whizkid had acquired a larger than life image of a role model for younger managers and a statesman who symbolised a role model for younger managers and a statesman who symbolised the best and brightest face of Indian management.the best and brightest face of Indian management.On his wife’s suggestion that it would be wise to discuss the move On his wife’s suggestion that it would be wise to discuss the move with one of his trusted colleagues before making a formal with one of his trusted colleagues before making a formal announcement of his intention to seek premature retirement, Divan announcement of his intention to seek premature retirement, Divan called on Ramcharan Saxena, a solicitor who has been on the called on Ramcharan Saxena, a solicitor who has been on the Vertigo board for over a decade. Saxena wwas surprised at Divan’s Vertigo board for over a decade. Saxena wwas surprised at Divan’s plan. But he was unfazed. “If that is what you want to do for the plan. But he was unfazed. “If that is what you want to do for the rest of your life, we can only wish you well”rest of your life, we can only wish you well”he told him. “The board will miss you. But the business should go on.he told him. “The board will miss you. But the business should go on.

We should get down to the task of choosing a successor. The We should get down to the task of choosing a successor. The sooner it is done, the better.’sooner it is done, the better.’““I think the choice is quite obvious,” said Divan, “Ranjan Warrior. I think the choice is quite obvious,” said Divan, “Ranjan Warrior. He is good and …” Divan was taken aback to see Saxena grimace. He is good and …” Divan was taken aback to see Saxena grimace. “You don’t have anything against him, do you?” he asked him. “No, “You don’t have anything against him, do you?” he asked him. “No, no,” said Saxena, “He is a good. A financial strategist and a no,” said Saxena, “He is a good. A financial strategist and a visionary. His conceptual skills have served the company well. But visionary. His conceptual skills have served the company well. But he has always had staff role with no line experience. What we he has always had staff role with no line experience. What we need is someone from operations. Like Richard Crasta.”need is someone from operations. Like Richard Crasta.”““Richard knows things inside out alright”, said Divan, “But he is Richard knows things inside out alright”, said Divan, “But he is just a doer. Nor fire in the belly. Vertigo needs someone who just a doer. Nor fire in the belly. Vertigo needs someone who understands the value of power and knows how to use it. Like me. understands the value of power and knows how to use it. Like me. Like Ranjan.”Like Ranjan.”““That is just the problem,” said Saxena. “Prem, let me tell you That is just the problem,” said Saxena. “Prem, let me tell you something. Ranjan is a man in your own image. Everyone knows something. Ranjan is a man in your own image. Everyone knows that he is your protégé. And protégés are never popular. He has that he is your protégé. And protégés are never popular. He has generated a lot of resentment among senior Vertigo executive and generated a lot of resentment among senior Vertigo executive and there would be a revolt if he were to succeed you. An exodus is there would be a revolt if he were to succeed you. An exodus is something we can’t afford to have on our hands. We should think something we can’t afford to have on our hands. We should think of someone else in the interest of stability of top management.”of someone else in the interest of stability of top management.”

Divan could not believe what he heard. He had always prided Divan could not believe what he heard. He had always prided himself on his hands-on style and thought he had his ear to the himself on his hands-on style and thought he had his ear to the ground. “How could I lose touch?” he wondered, somewhat ground. “How could I lose touch?” he wondered, somewhat shaken.shaken.““When you are the boss, people accept your authority without When you are the boss, people accept your authority without question,” continued Saxena. “In any case, you have been question,” continued Saxena. “In any case, you have been successful at Vertigo and it is difficult to argue with success. But successful at Vertigo and it is difficult to argue with success. But the moment you announce your intention to leave, the aura the moment you announce your intention to leave, the aura begins to fade away. And in deciding on your successor, the begins to fade away. And in deciding on your successor, the board will seek your opinion, with due regard to your judgement. board will seek your opinion, with due regard to your judgement. The board members must do what in their view is right for the The board members must do what in their view is right for the company. Having said that, may I also mention that if there is a company. Having said that, may I also mention that if there is a showdown in the boardroom, you could always choose to stay on? showdown in the boardroom, you could always choose to stay on? We would like it. Or we could bring in outsider.”We would like it. Or we could bring in outsider.”

“ “ I have finalised my career plans and there is no question of I have finalised my career plans and there is no question of staying on beyond six months from now,” said Divan. “ The board staying on beyond six months from now,” said Divan. “ The board is scheduled to meet next month. Let us shelve the matter till is scheduled to meet next month. Let us shelve the matter till then. In the meantime, I rely on you, Ram, to keep this discussion then. In the meantime, I rely on you, Ram, to keep this discussion between the two of us.”between the two of us.”

“ “Of course yes,” said Saxena.Of course yes,” said Saxena.

On his way home , Divan thought about the matter in On his way home , Divan thought about the matter in detail . Bringing an outsider would undo all his life’s detail . Bringing an outsider would undo all his life’s work at Vertigo. There were considerations like culture work at Vertigo. There were considerations like culture and compatibility which were paramount. The and compatibility which were paramount. The chairman had to be an inside man. “Richard lacks chairman had to be an inside man. “Richard lacks stature,” Divan said to himself . “Ranjan is the one I stature,” Divan said to himself . “Ranjan is the one I have been grooming, but heavens, the flip side of it all have been grooming, but heavens, the flip side of it all had missed me completely. There is no way I can allow had missed me completely. There is no way I can allow a split at the top just before I quit. I must leave on a a split at the top just before I quit. I must leave on a high note in my own interest. I must find a way out of high note in my own interest. I must find a way out of the imminent mess.” the imminent mess.”

QUESTIONQUESTION What should Divan do?What should Divan do?