Institution Building

Presentation by
P M Kumar

Member Group Holding Board

Business Chairman - Group Corporate Development

15 January 2011 1
 Institution Building Process

SENTIENT PROCESS
Collective Feelings
Focus on HOW WE FEEL
Mobilization Focus in
& Empowerment
Belonging

“The Psychological Contract”

INSTITUTIONAL ANCHOR STRUCTURAL ANCHOR
WHO WE ARE (WHAT WE DO )
Philosophy -,Mission-
Institution Vision- Strategy-
Values- Founders Building Structure- Roles-
Promoters’ History- KRAs- Rewards etc.
Identity-’ Persona’ & Brand

Focus on
Focus Efficiency/
On ROCE
Renewal BUSINESS PROCESS Productivity etc.
HOW WE DO
WHAT WE DO 2
 Building blocks of Institution building

Strategic Management Governance

• Process driven management decision making
with entrepreneurial spirit preserved • Family Governance guided by Family Constitution
• Long term growth plan • Corporate Governance
• Risk measurement framework

Vision
Corporate Functions & Values & Beliefs
capabilities • Group alignment to a common objective
• Standardization of critical support • Drive a uniform GMR culture
functions Building an • Social responsibility initiatives
• Improve processes to best-in-class –
Corporate Procurement, Information Institution for
Technology, Finance, Legal, Assurance
• Group Function Councils perpetuity
• Corporate Sustainability

Leadership development
Empowered Organization & Talent Management
• Matrix reporting structure
• Capability building
• Senior Leadership Team (SLT) Forum
• Succession planning
• Delegation of Power – RASCI
• E-enabled Performance Management Process
• Group Performance Advisory Council (GPAC)
• Knowledge Management (KM)
Business Excellence
• Focus on Leadership, Stakeholders, Business
Processes and Results
• Malcolm Baldridge Framework
3
 Organizations & Institutions

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
15 January 2011 4
 Organizations Vs Institutions
Some key variables of an organization….

1 World View & Outlook

2 Environment Interface

3 Leadership

4 Roles

5 Membership
15 January 2011 …….How do they differ from Institution
1 World View & Outlook

Organizations Institutions

• Defines itself primarily in the language • Defines itself as a living organic

of economics.

• Primary focus is on strategy, structure, • Focus on mission, philosophy, aims,

process, roles, tasks, and results. meaning, values, culture and belonging

• Preoccupation with skills & results • Preoccupation with wisdom

• Predominantly short term in orientation • Long term in approach and commitment

• Expedience and consequences are in • Convictions and values are in focus

focus

15 January 2011 6
2 Environment Interface

Organizations Institutions

• Engagement with the environment is • Are sensitive to their environments

fragile, reactive and suspicious. and are proactive

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

• Many are short lived • Longevity is sustainable

15 January 2011 7
3 Leadership

Organizations Institutions

• Leaders have to frequently explain their • Faith in the leadership is strong. The
actions and defend their decisions. benefit of doubt goes to the leaders
Suspicion and doubt about the intention
of leaders is prevalent

• Leaders lead the way • Servant Leadership

• Succession is poor and ad hoc • The process for succession is robust

and emphasizes a combination of
continuity and change.

• They seek "partnership in clarity". • Leaders encourage and seek

Leaders want to be certain and clear in "partnership in ambiguity". They share
their communication. their confusions and doubts with other
members and invite ownership.

• 15Problems
January 2011 move upward to the leaders • Proposals move upward to the leaders 8
4 Roles
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
15 January 2011
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.
9
5 Membership

Organizations Institutions

• Members operate largely from an • Members operate from predominantly a

'economic' and /or a 'professional' 'psychological' contract. Their
contract. Their contributions are contributions are mostly voluntary and
contracted for, bilateral by nature or unilateral by nature.
mandated. 'Quid pro quo" is prevalent.

• Members are contractual in their • Members are willing to be contextual in

outlook. They take a rigid and their view. They are tolerant of
unappreciative view of unexpected unexpected and idiosyncratic
developments. developments.

• Members are concerned with individual • Members are sensitive to the common
and sect oral wellbeing. Their ambitions good. Their ambitions are directed
are self- centered. towards the well being and success of
the centred. institution.

15 January 2011 10
 Membership Contracts
Fundamentally, there are 3 kinds of Membership contracts……
1 2 3

Economic Professional Psychological

Contract Contract Contract

•The focus •The primary •The emphasis

here is on concern is here is on the
money and about the implicit
life style. nature of psychological
work. What expectations.
will my role
be? •The sense of
belonging is
rooted in this
contract.
Every member of an Institution will act from all three contracts, to a lesser or higher degree.
 5 Strains of engagement and commitment
Organizations Institutions

Senior Associate Members

Management

Professional Members
Middle Institutional Talent Management
Ɣ

Rate of Conversion
Management

Institutional
Members

Junior Management
Co-
Founders
Members

Support Staff Founder

members
15 January 2011 12
 Founder Members

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

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

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

3

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

• They inspire, define and defend.

5

• 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.
6

• Successors find it very difficult to take their place and 'fill the idolized gap'.
7
15 January 2011 13
 Co -Founder Members
• They share the founder's dream.
1

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

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

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

• This multiple sets of followers may fragment the Institution.

5

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

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

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

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

• They often become involved in covert power struggles and sibling rivalry - First strains of 'rebellion' in the Institution may have a source here.
10 15 January 2011 14
 Institutional Members

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

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

• 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.
3

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

• Their psychological contract is strong – Seen as Custodians

5

• These individuals give the benefit of doubt to the leaders of the institution and champion the cause of the Institution.
6
15 January 2011 15
 Professional Members
• These individuals join the community, post start up and just prior to the growth stage.
1

• Professional competence is primary focus

2

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

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

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

• They demand clarity of roles, expectations and resources.

6

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

7

• Quid Pro Quo is the salient engagement position.

8

• Institutional members often see them as transient mercenaries.

9 16
 Associate Members

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

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

2

• They are often in ' recipient' positions

3

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

• Learning is a major theme in their professional contract, their economic contract is speculative and their psychological contract
is of 'goodwill'.
5

15 January 2011 17
 Building Membership

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…..

Professional
H L
Membership
Institution Leaders Retrain
& &
Role Models Mentors Redeploy
Membership

H
Institutional

Council Mentors for Values Acculturate

L & EXIT
15 January 2011 Involve in Institution Building 18
 Membership Matrix

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

The integrity of Institutions is almost completely dependent on the integrity demonstrated by

its people and their membership and commitment levels

15 January 2011 19
 Thank You

15 January 2011 20