This article is a lightly-edited summary of the key takeaways from our speakers’ appearance on our podcast, “The Shape of Work.” If you haven’t listened to our show yet, be sure to check it out here. These speakers have an incredible stable of startup experiences to draw from, the kind of stories that are unbelievably helpful for HR/people managers to hear.
Human Resources can strongly benefit from using Artificial Intelligence in data and knowledge management processes. However, human interactions and soft skills are crucial for HR departments around the world. No machine is able to replace these skills in the near future.Umesh Hota, President- HR (Acquired Business) at UltraTech Cement
To say that Umesh knows about leadership would be an understatement—he is a 20 year veteran of the Human Resources industry.
From studying MSc in chemistry to doing an MBA in HR, our guest, Umesh has handled six mergers and acquisitions.
In our conversation on ‘The Shape of Work’ podcast, Umesh and Abhash, Springworks Head of Marketing and our host, cover:
- Human Resources in a corporate vs manufacturing unit.
- Low-down on Mergers and Acquisitions in MNCs.
- How behaviour drives the company culture.
- Top reasons why mergers and acquisitions fail.
- And of course, applications of AI in the Human Resources function.
Listen to the full conversation above or read on for our highlights from the show.
GUEST AT A GLANCE
Name: Umesh Hota
What he does: President- HR(Acquired Business) at UltraTech Cement, Aditya Birla Group and managing 17 manufacturing locations at different stages of integration.
Human Resources: Corporate vs Manufacturing
Assimilating Mergers and acquisitions
Umesh has handled six mergers and acquisitions in his career. His first hands-on experience comes from an organization he joined in the year 2000. He joined as part of the acquired unit which was padlocked for the last 18 months because of Industry relations issues. He worked with the acquired unit to build a unified team in the mergers and acquisitions.
When you look at the data at a macro level, you see that 50% of the mergers or acquisitions fail, and then only 50% of them succeed. I have been lucky to see success in all six of the acquisitions that I have been part of.
A common mistake leads to a failed acquisition
When an integration happens, the parent organization believes that the acquired asset is bound to behave and act the way they want. They are under a misconception that they own the acquired company by paying for it.
Three principles to follow for a 100% successful acquisition:
1. Have patience
The acquirer should not rush into driving changes and expect too much all at once from the purchased organization. The organisation that you have acquired also had a culture which they have to change.
In a merger process, leaders must learn about the culture of each of the companies involved, as soon as possible.
From the standpoint of strategy, several key questions should be considered. What is the “secret sauce” of the target company, where are its “pearls,” the factors that must be preserved because they are intrinsic to its value for the acquirer? How can the acquirer benefit from the target culturally and vice versa?
2. Treat the acquired entity as an asset, not a liability
When an organization acquires another, they should communicate to the employees of the purchased firm that the deal is a “merger of equals.”.
It is not right to say that the organization had to be acquired because of its employees’ poor performance. As an acquirer, it is pertinent to respect the employees, history and culture of the purchased organization.
3. Take things slow
Merging companies must shift the day-to-day behaviour and mindsets of their employees. Leaders must make sure that these changes are made at a slower pace such that the employees assimilate them well.
Leaders can spend a significant amount of time developing a change story explaining how the deal would benefit the company. They need to build a thorough understanding among the employees regarding the entire process and the reason behind the change.
Behaviours run a tight ship
Experience comes with age, but certain behaviours are driven by thoughts and feelings. These behaviours provide insights into the individual psyche, revealing things such as attitudes and values. Certain behaviour that makes one individual more fit than the other is ingrained in them.
“When we go for a campus hiring, we do not necessarily look for what the students have learned in the last two years of their B-schools. Hard skills are important, of course. But, the other most important aspect of the selection process is the ‘behaviour’ that these students picked up during their journey as students.
Thus, the selection process is critical. When you select someone for a particular organisation and even when you visit the same campus representing two different organisations, you never select people with identical behaviour. It is because every organization has its own culture that supports certain behaviours.”
The Growing Need for the Teaching of Employee & Industrial Relations
Going back a couple of years, the management institutes have done a fabulous job in various functions of Human Resources such as organisation development, talent management, talent acquisition, decoding behaviour, etc. However, when it comes to teaching industrial relations in institutes, Umesh is disappointed to see institutes not focus on this function for a couple of decades.
This has caused the human resources functions to mismanage the unions and other political forces. On the other hand, we, as a nation, need to focus on manufacturing more in India and the critical role of the human resource in that area such as Employee, Union, and Political relations.
Cultural changes in Merger & Acquisitions- Multinational corporations
A multinational company generally has offices and/or factories in different countries. An employee might get chances to go to different countries to work.
Umesh shares his first experience of going on a business trip to Thailand. While entering the meeting room, he saw a single man out of all the other twenty women. Thus he concluded that it was a women-led organization. This is one of the very significant aspects that define a company’s culture.
It is HR’s responsibility to be sensitive and mindful of this culture and create the policies and strategies for the same.
Umesh justifies it with an example. He says, “For example, if I’m hosting a meeting for a women-led organization, I need to be mindful of things like hosting a lunch, instead of approaching a dinner meeting. Thus, the organization’s systems and policies must align with the organizational culture.”
How AI is going to benefit Human Resources?
Umesh shares an interesting perspective on the benefits of AI in the Human Resources function. He believes that AI might help organizations in responding to employees effectively.
If an employee lands in Visakhapatnam at 10 pm. To book a hotel, an employee needs to know the claim that he is entitled to. One way to know it is by having a call with HR which can be time-consuming. The other way is to do it through a Chatbot which can do the quick backend job in seconds. It can show your grade, entitlement, policies and might also refer the candidate to the hotels available in that city.
When you look at Human Resources Management or People Management as a subject, whichever field you are, whether you are in Marketing, Manufacturing or Finance, ultimately you deliver things through your team through your people.
“A bit of all management boils down to people management. If you break down any object, whether it is a living object or a non-living object, you end up with atoms and molecules. So that’s all about chemistry. Hence, fundamental of all sciences is chemistry and fundamental of all management is people management.”