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TA pA n M i T r A , C h i e f - h r , a p o l l o t y r e s lt d .
A p o l l o T y r e s lT d .
Passion in Motion
30 The human facTor January 2011
PHOTO: sujan singH
rom being the first and largest Indian multinational tyre corporation, Apollo Tyres has traversed a long journey since its inception 34 years ago. The seeds of growth germinated with the opening of its first plant at Perambra, Kerala. In 1991, it set up another Greenfield plant in Gujarat, today the biggest plant in southeast Asia. Thereafter in 1995, it acquired another plant in Kerala, called Premier Tyres. Mr. Onkar S Kanwar (presently the CMD) took lead of Apollo in between 1979-80, a time when a major turnaround was required. In 1995, he was joined by his talented younger son, Mr. Neeraj Kanwar, who is sharing the responsibility of carrying the family legacy forward as Vice Chairman & MD. Though the company had been on a growth path, it was not until 2005 that the need to focus on HR systems was realised. Mr. Tapan Mitra (Chief – Human Resources) recalls, “HR mostly comprised home-grown people from other disciplines. So, there was a dire need for professionalism.” This was when Mr. Mitra joined the company. With a huge challenge to build HR from scratch, he says
Jewels in the King’s Crown
• First Indian company to reach the revenue of USD 1 billion. • First Indian multinational within the tyre industry. • First in the world among tyre companies to achieve BS7799 certification. • Largest suppliers to OEMs in India. • Apollo’s Greenfield plant in Gujarat is the biggest plant in southeast Asia.
that they roped in Mercer as their HR consulting agency and worked towards professionalising the function. At this time, Mr. Arun Maira (the then Chairman of the Boston Consulting Group) was also rolled in as consultant for leadership intervention to chart the company’s future. Adds Mr. Mitra, “He took our top team of about 15 to 16 people to Shimla where for three days, we deliberated on our next big step. We planned the mechanisms to achieve our goal to become a USD two billion company in five years’ time.” This intervention set a start to the company’s people journey which led to establishing world-class HR systems and processes. While detailing out the HR systems further, Mr. Mitra soon realised the need for the Performance Management System ( PMS) to be very robust. Therefore, they designed it with Mercer but took it a step further by taking it online. The system was named ‘PACE’, standing for, Performance And Career Enhancement. Their compensation system has a unique concept of variable pay, that is, performance bonus, ranging from 10 to 30 per cent across all levels. The performance parameters for all are broken into the two components of individual performance and company performance. They also have a quarterly evaluation along with which performance bonus is paid out. Moreover, in their annual performance appraisals, they ensure that increment letters were handed out to the employees on the first of April every year. “In our company, the philosophy is that we work hard, but play harder! We have a lot of engage-
ment activities involving employees and their families. Salary alone cannot bind people to a company, and they should get encouragement from time to time to feel as a part of the team,” says Mr. Mitra. Also, as an offshoot of PACE, it undertakes numerous management development programmes. The focus is on two things, that is, skill development (for the junior level) and leadership building (for the senior and middle levels). The top management is also sent to IMD and INSEAD for advanced management training. Most importantly, Apollo believes in imparting training to those who perform or have the potential for growth. Apollo Tyres has grown through some major acquisitions; one in 2006 when it acquired Dunlop South Africa and the other in 2009, the acquisition of Vredestein of Netherlands, which made Apollo an international company, with 15,000 people on board: 10,000 in India and the rest internationally. Adds, Mr. Mitra, “One of our major
challenges in HR has been to integrate these new geographies. We have had some cultural exchanges, where 50 key managers from both these countries came to India for a week and experienced a taste of Indian culture, since we invited all of them to our houses.” Moreover, ‘Family Days’ are celebrated across all manufacturing facilities across Apollo geographies. This is when employees’ families are invited to visit the plants and understand the nature of work better. Another unique concept is the ‘Apollo One Family’. Explaining it further, Mr. Mitra says, “The ‘One Family’ activities include get-togethers on festivals, cricket tournaments (called Apollo Unstoppable Cup) in India, soccer matches in South Africa, painting competitions and summer camps for children, and numerous other activities. For instance, we recently took our senior management, along with their family, on a three-day trip to Paris and Amsterdam with all expenses paid by the company. This helps to bind people
January 2011 The human facTor
LOrds Of THe game
ExcluSIvE Q&A WIth SAtISh ShArmA, chIEf – IndIA OpErAtIOnS, ApOllO tyrES ltd.
Q. Share with us the Apollo story in India.
A. Apollo in India is in-step with the economy or even outstripping the economy by some margin. At present, Indian operations comprise 60 per cent of our revenue and we are looking at India alone becoming a USD 2 billion operation in the next three years. We are looking at very steep growth in all three customer channels, that is, replacement after-market, OE segment, and exports. We also hope to double our exports (from 9 per cent of our revenue to about 20 per cent). Q. What are your growth plans from the sales point of view? A. We have been the market leader in the commercial vehicle space for the last three decades and all market leaders should be volume leaders, as well as price leaders. Our mantra is profitable growth, and we look at the bottom-line as well as the top-line. We are also looking at the hinterlands. It is about great product technology, even better after-sales service, and a gameplan for your retailers where they see a profit. These are the three pillars of growth and we are innovating around them. In short, market leadership around the product, customer engagement, and operational excellence. As the only Indian company exporting to Europe, we are able to compress the life cycle of a mature market and bring those fruits to India. While we have had volume growth, we are still not the perceptual leaders in the market. But, we do like to believe that we are the Asian Paints of the tyre industry! Q. What is the perception of Apollo in the global market? A. We are the most-talked-about emerging player within industry circles. Our big task is to disassociate ourselves from the Chinese because their perception is very poor. But given the kind of acquisitions we have made, our global workforce, and the way we are approaching our every step, I think, within the industry, they are looking at us very seriously. Q. Is there a perception that Indian products are not truly high quality? A. Perception-wise, we are considered better than the Chinese, but the Chinese gravitational pull does exist. But, if you have a manufacturing facility in Europe (the way that we have), then you can disassociate yourself very easily.
together and gives a lot of mileage in terms of retention.” Even birthdays are celebrated with great enthusiasm, which the Vice Chairman makes it a point to attend, and this feeling of togetherness is what Apollo always strives for. In 2010, its Greenfield plant commenced production (set up in a record time of 14 months). Apollo’s Chennai plant is a state-of-the-art radial tyre plant with benchmark practices in line with the best in the world. With an objective of creating Chennai as an iconic plant, lots of new concepts have been brought in. The plant has a lean organisational structure paving way for faster decision making and empowered teams (Self Managed Teams). HR’s role is to ensure implementation of new concepts and work practices, and develop an iconic culture. Going forward, the company believes that integrating different cultures would be a major challenge, along with the usual challenges of controlling attrition, motivating people, leadership development, and succession planning. Mr. Mitra hopes it will be an interesting journey which will see Apollo reach new heights in terms of thf human resources and business processes.
32 The human facTor January 2011