Institution Building

April 10, 2023 1

Presentation by P M Kumar

Member Group Holding Board

Business Chairman - Group Corporate Development

2

FocusOn

Renewal

Focus onEfficiency/

ROCEProductivity etc.

STRUCTURAL ANCHOR(WHAT WE DO )

Vision- Strategy-Structure- Roles-

KRAs- Rewards etc.

BUSINESS PROCESSHOW WE DO WHAT WE DO

INSTITUTIONAL ANCHORWHO WE ARE

Philosophy -,Mission-Values- Founders

Promoters’ History- Identity-’ Persona’ & Brand

SENTIENT PROCESSCollective Feelings HOW WE FEEL

“The Psychological Contract”

InstitutionBuilding

Focus onMobilization

&Belonging

Focus inEmpowerment

Institution Building Process

Building an

Institution for

perpetuity

Strategic Management

Leadership development & Talent ManagementEmpowered Organization

Governance

Corporate Functions & capabilities

Business Excellence

VisionValues & Beliefs

• Family Governance guided by Family Constitution• Corporate Governance

• Group alignment to a common objective• Drive a uniform GMR culture• Social responsibility initiatives

• Capability building• Succession planning• E-enabled Performance Management Process

• Focus on Leadership, Stakeholders, Business Processes and Results

• Malcolm Baldridge Framework

• Matrix reporting structure• Senior Leadership Team (SLT) Forum• Delegation of Power – RASCI• Group Performance Advisory Council (GPAC)• Knowledge Management (KM)

• Standardization of critical support functions

• Improve processes to best-in-class – Corporate Procurement, Information Technology, Finance, Legal, Assurance

• Group Function Councils• Corporate Sustainability

• Process driven management decision making with entrepreneurial spirit preserved

• Long term growth plan• Risk measurement framework

Building blocks of Institution building

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Organizations & Institutions

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Organizations, when led with statesmanship and wisdom, mature into Institutions.

• The maturation process is an evolutionary and organic one, sustaining its relevance over time.

An Institution is not only a set of traditions and time honored structures and norms - as is commonly understood. • It is more - it is a 'gharana', a state of mind, a sense of belonging

and ownership that is fundamentally "alive' in the minds of people and not in physical monuments & monoliths

Organizations Vs Institutions

April 10, 2023

Some key variables of an organization….

World View & Outlook

Environment Interface

Leadership

Roles

Membership

1

2

3

4

5

…….How do they differ from Institution

World View & Outlook

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1

Organizations

• Defines itself primarily in the language of economics.

• Primary focus is on strategy, structure, process, roles, tasks, and results.

• Preoccupation with skills & results

• Predominantly short term in orientation

• Expedience and consequences are in focus

Institutions

• Defines itself as a living organic

• Focus on mission, philosophy, aims, meaning, values, culture and belonging

• Preoccupation with wisdom

• Long term in approach and commitment

• Convictions and values are in focus

Environment Interface

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2

Organizations

• Engagement with the environment is fragile, reactive and suspicious.

• Are quick to adopt fads and fashions - Appear 'modern' to the observer.

• Many are short lived

Institutions

• Are sensitive to their environments and are proactive

• Are progressive - Appear staid.

• Longevity is sustainable

Leadership

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3

Organizations

• Leaders have to frequently explain their actions and defend their decisions. Suspicion and doubt about the intention of leaders is prevalent

• Leaders lead the way

• Succession is poor and ad hoc

• They seek "partnership in clarity". Leaders want to be certain and clear in their communication.

• Problems move upward to the leaders

Institutions

• Faith in the leadership is strong. The benefit of doubt goes to the leaders

• Servant Leadership

• The process for succession is robust and emphasizes a combination of continuity and change.

• Leaders encourage and seek "partnership in ambiguity". They share their confusions and doubts with other members and invite ownership.

• Proposals move upward to the leaders

Roles

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4

Organizations

• Individuals 'protect' their role boundaries and functional jurisdiction

• Inter-role spaces have no 'owners'. Many issues fall between two stools and the 'boss' orchestrates these through persuasion and arbitration.

• Protocols are established to manage inter-role engagements

Institutions

• Members sustain each other's roles. Expertise permeates and spreads across roles

• Inter role spaces are attended to. Members volunteer to do what needs to be done in the inter-role spaces and help each other when tasks and roles are hazy.

• Sensitivity and awareness of what will make others succeed is often the basis of inter – role transactions. Win - win is important.

Membership

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5

Organizations

• Members operate largely from an 'economic' and /or a 'professional' contract. Their contributions are contracted for, bilateral by nature or mandated. 'Quid pro quo" is prevalent.

• Members are contractual in their outlook. They take a rigid and unappreciative view of unexpected developments.

• Members are concerned with individual and sect oral wellbeing. Their ambitions are self- centered.

Institutions

• Members operate from predominantly a 'psychological' contract. Their contributions are mostly voluntary and unilateral by nature.

• Members are willing to be contextual in their view. They are tolerant of unexpected and idiosyncratic developments.

• Members are sensitive to the common good. Their ambitions are directed towards the well being and success of the centred. institution.

Membership Contracts

Fundamentally, there are 3 kinds of Membership contracts……

1 2 3

Every member of an Institution will act from all three contracts, to a lesser or higher degree.

Economic

Contract

•The focus here is on money and life style.

Professional

Contract

•The primary concern is about the nature of work. What will my role be?

Psychological

Contract

•The emphasis here is on the implicit psychological expectations.

•The sense of belonging is rooted in this contract.

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5 Strains of engagement and commitment

Associate Members

Professional Members

Institutional Members

Co- Founders Members

Founder members

Senior Managemen

t

Middle Management

Junior Management

Support Staff

InstitutionsOrganizations

Rate of Conversion Institutional Talent Management

Ɣ

Founder Members

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1• They have dared to rebel or dream and sculpt their dream into a reality.

2• They embody the seminal idea, purpose and mission of the Institution.

3• They are able to invite and foster partnerships in a shared destiny.

4• Founder members are the gatekeepers between the Institution and the rest of the world.

5• They inspire, define and defend.

6• Their personal identity often gets fused with the Institutional identity and they have great difficulty in letting go and handing over to successors - They sometimes treat the Institution as their personal property.

7• Successors find it very difficult to take their place and 'fill the idolized gap'.

Co -Founder Members

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1• They share the founder's dream.

2• They provide the much needed moral and psychological support and companionship to the founder.

3• Initially they may be seen as followers / disciples but very soon they command, within the Institution, a following of their own.

4• They are seen as role models and become mentors within the Institution.

5• This multiple sets of followers may fragment the Institution.

6• They act as gatekeepers between the founder and members of the Institution.

7• They amplify, codify and disseminate the fundamental principles, values and purpose of the Institution

8• When the founder does not let go, the co-founders may get disenchanted and their psychological contract may get ruptured.

9• As the Institution matures, they may have dreams of their own, experience suffocation and start another Institution, to become founders elsewhere

10• They often become involved in covert power struggles and sibling rivalry - First strains of 'rebellion' in the Institution may have a source here.

Institutional Members

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1• These individuals join in at various points in the building of the Institution - either by invitation or by application.

2• They often represent the values of the Institution to the outer world. They are the 'valueholders'.

3

• They almost always keep the Institution before themselves. They willingly go through inconvenience and harsh times for the good of the Institution. They choose to participate in dealing with the bad news.

4• They are able to influence non-reporting relationships effectively with their personal & professional creditability

5• Their psychological contract is strong – Seen as Custodians

6• These individuals give the benefit of doubt to the leaders of the institution and champion the cause of the Institution.

Professional Members

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1• These individuals join the community, post start up and just prior to the growth stage.

2• Professional competence is primary focus

3• They bring values of excellence, a performance culture, relevant systems and a strong work ethic to the community.

4• What the organization does and how well the organization performs, is championed by these competent individuals.

5• Their economic and professional contracts are primary. Their psychological contract is weak and often considered unimportant by them.

6• They demand clarity of roles, expectations and resources.

7• They may have difficulty in influencing non-reporting relationships.

8• Quid Pro Quo is the salient engagement position.

9• Institutional members often see them as transient mercenaries.

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Associate Members

1• These individuals have just entered the community and are finding their feet, often as 'probationers'.

2• They look forward to induction, mentoring and acculturation by the community.

3• They are often in ' recipient' positions

4• They often put the work community and Institution 'on probation' as they are testing the waters.

5

• Learning is a major theme in their professional contract, their economic contract is speculative and their psychological contract is of 'goodwill'.

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Building Membership

Inst

itutio

nal

Mem

bers

hip

Professional Membership

Institution Leaders &

Role Models Mentors

Retrain &

Redeploy

Council Mentors for Values Acculturate &

Involve in Institution Building EXIT

H

L

H L

Integrity, vibrancy & effectiveness of a work community and Institution is influenced by • Percentage of members in each commitment level • The rate of conversion from one commitment level to the next

How transition across Institutional & Professional Memberships are handled?This matrix provides a starting point…..

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Membership Matrix

The integrity of Institutions is almost completely dependent on the integrity demonstrated by its people and their membership and commitment levels

Individuals who are HIGH on both Institutional & Professional membership are ideal candidates for Leadership Positions - Demonstrating commitment levels akin to Co-Founder / Founder• They may take up opportunities such as starting a diversification project, running an acquired business or

leading an offshore business

Sometimes, Co-Founders and Institutional members lose heart and in their low cycles may regress to a lower order commitment level

• May decide to restrict their psychological involvement to that of a professional member, for a period of time

April 10, 2023 20

Thank You