Tuesday 31 March 2020

Work From Home: Thoughts for employers and employees

I have always been a huge votary of the work from home idea.  I have never believed in having office timings, I have not ever bothered if people came into work or not. So long as the work got done, none of this should matter, I would argue.  I believe that people should be mature enough to deliver on the responsibilities assigned to them and that managers should know how to make them accountable.

But alas, that is not how the real world is. It does not have to be that way, but then that is how it is. Most of our companies work in a time clock punching world. We live in a world where HR keeps an eye on how many hours you put in but not whether you did any work during those hours that you clocked.  Much too often to my liking I run into a colleague in the elevator who would tell me that he had to stay late to log the hours that HR expected of him. We live in a world where managers are aware that somebody who clocks the hours may not be delivering but won’t take action until delivery on the task has been compromised. The blame for this would be assigned to everything except the manager’s unwillingness to put in place a system to continuously monitor people for the work they do and not the hours they keep.

Here at IRIS, a company of which I am the Founder & CEO, everybody loves the flexibility that I have ensured is never taken away from them. They love the flexibility of coming to the office when they wish and if they wish, they love the flexibility of being able to spend their entire afternoon at the local mall without being questioned. The managers have stopped criticising me for allowing such flexibility because they too have benefited greatly from it or maybe they simply know that this is a subject on which I am inflexible.

There have been huge abuses of the system. A colleague was granted permission to work from home on the day of his marriage. I learned about it only because I happened to call him for something at the precise time the nuptial vows were being exchanged. Yet another colleague spent a week working from home when she was actually shopping for her wedding. The abuse that left me wondering whether I should laugh or cry was by a colleague on our inbound help desk setup for clients was given permission to work from home when she had exhausted her maternity leave but wanted to be at home for the baby. When asked how she could work from home given her role, her supervisor blamed it on my unwillingness to entertain any discussion on limiting flexibility. 

He is right, because the only time I veto my colleagues is when colleagues curtail such freedom. But he is wrong, because he I never told him to not set up systems to make her accountable. In the 25 years I have been an entrepreneur, my biggest failure has been to get my colleagues to embrace the idea whole heartedly and make it a success. My colleagues in HR don’t take the initiative to roll it out either, they take refuge in my frequent comment that it is up to the line managers to formulate a framework with HR in a supporting role to help with the execution of the system.

That is really the nub of the matter.  Work from home fails because we refuse to even try and measure performance.  It is uncharted territory. But people like status quo and are simply unwilling to tread outside their comfort zones.  Even when some people were willing to explore the idea, they are persuaded by reluctant colleagues who give reasons why it is simply not feasible. I may be the CEO but my writ clearly does not run on this issue. But I continue to persevere.

Because I believe that except in manufacturing companies and services companies where one needs customer facing people, work from home should be possible in almost all other areas. In fact, given the automation that is happening around the world, it may be possible to work from home even in manufacturing companies, with a need to go work only if and when physical attention is needed. A friend of mine consults for a company with a factory in Germany which is controlled from a small office in Powai in Mumbai, he tells me that there are no shop floor workers!!

To make work from home work for the company, managers need to change, managements need to change, the rule book needs to change.  We have to stop looking at employment through the prism of work hours and work days. In a world where the employee can work from anywhere and any time, the work leisure divide is set by the employee and not by the employer. But then it will work only if the employee is mature enough to understand the significance of the flexibility being accorded by the organisation.

The approach to compensation has to undergo a radical transformation. It cannot be a time and material approach to fixing compensation, it would be ideal instead to try and fix compensation based on an estimate of the value of saleable output generated by the employee. It gets tricky when not all output is for immediate sale or when there are people who are not creating output for sale, these have to be dealt differently. In the perfect work from home world, the nature of the contract between an employee and an employee will change.

Many managers hate the idea of allowing their subordinates the opportunity to work from home because they simply are not used to being precise in their instructions to their subordinates. I believe that allowing subordinates to work from home will make a supervisor  better, the operations of businesses will become more efficient.  Meetings will be productive and the respect for each others’ time will increase in tasks that require collaboration.

Work from home will also need fundamental changes in law. I remember a visit a PF inspector paid to our offices in our early days.  He wanted to know why we don’t take the attendance register more seriously than we did.  After listening to my spiel on how I believed in giving my colleagues total freedom to come when they wish and go when they wish and come to office only if they wish to, he told me that the attendance register is actually a right of our staff. He told me that the attendance register was not so much about employers keeping an eye on their staff as it was about the staff having a record to show that they are employed in the firm.

Above all else, the staff need to recognise that it is entirely upto them to make work from home a success.  Companies need to recognise that a work from home possibility will do the company a lot of good. Managers need to recognise that it will make them a lot sharper.

I just hope my managers are listening.

Friday 27 March 2020

RBI has begun well, but the task is half done

RBI's announcement earlier today is certainly very good for banks. But for RBI's initiatives to actually end up helping the real economy in any significant manner, a lot more needs to be done. 

It is not really a moratorium
Whether or not to extend a moratorium has been left to the banks. What RBI has said is that if a bank reschedules a term loan to a borrower to allow the borrower the flexibility of not paying the next quarterly instalment, the bank need not recognise it as a default. Though if a borrower simply refuses to pay the next instalment, banks get the same benefit of not having to classify it as substandard. 

Similarly, banks have been given the flexibility of  rescheduling the interest dues from borrowers without having to worry about the loan being classified as substandard. The interest is deferred for a quarter but the borrower would probably have to find the resources to pay up thereafter for the bank to escape the requirement of classifying the loan as being in default.

Both of these initiatives help the bank hugely but do little by way of providing succour to the borrower who has to hope that cash flows after a quarter recover enough for things to be back to normal and even better than normal to support the repayment of deferred interest. 

Forbearance must be extended to credit card dues
Forbearance to credit card dues is something RBI may wish to consider. Many MSME promoters use their credit cards to borrow to keep their businesses going. Ironically, while they are able to service the expensive loans that these are, banks find them lacking in credit worthiness to borrow similar amounts of money at lower interest rates! If the forbearance is not extended to credit cards, lakhs of SMEs will be hit very hard. Defaults are inevitable. It is important for RBI to bear in mind that these businesses turned to credit cards because banks turned them away.  

Liquidity is the need of the hour
What is needed is liquidity, what is needed is an infusion of funds as an extra ordinary measure. Until things get back to normal, companies will be incurring much of their regular expenses with no inflows. It is inevitable that this will put many of them in a huge liquidity bind. It is important that these firms, many of whom, are fundamentally sound don't go belly up because of liquidity issues. 

The time is ripe for a new metric: Loan Book Ratio.
Banks have been prescribed several ratios that they need to adhere to and conformity with each of them is non negotiable. SLR or Statutory Liquidity Ratio is about investment by banks in government securities. CRR or Cash Reserve Ratio is about the percentage of balances held in cash by the bank.  Then there is the priority sector metric with sub targets. 

Perhaps, to ensure that RBI gets banks to lend to industry, it is time to impose a Loan Book ratio. The Loan Book Ratio would be the percentage of assets in a bank's book that it has lent to the real economy. 

If the liquidity provided by RBI to banks is used by the latter to buy bonds in the secondary market, it defeats the purpose of increasing liquidity to boost economic activity. It is probably time for banks to report their Loan Book Ratio on a weekly basis so that the transmission takes place. 

Friday 20 March 2020

Coronavirus: What you can do to help

Coronavirus: What you can do to help


Whether you are healthy or not. Whether you are a student or a working professional or a business person. Whether you are a man or a woman with two kids to take care of. There is something that each one of us can help with. Because there is much to be done. 

Starting today, 32 of us will be working closely with the staff of the Navi Mumbai Municipal Corporation (NMMC). You can do the same, with the local government in the place where you live.

What will be doing for them? Several things, starting with these.
  • Today, a few of us will be working alongside NMMC officials to conduct a door to door survey in one locality. 
  • A couple of us will be working with the staff at NMMC HQ to help them get their data organised.
  • Another set of volunteers will be calling every person in home quarantine twice a day, to talk to them, to reassure them, to comfort them and to help them procure essentials.
  • A few of us will be working with the local police to reach out to senior citizens living alone to see if they would like our help to procure food, medicines or any other essentials.
  • We will be reaching out to as many building societies as we possibly can to get them to identify a resource person in their building who we will then connect with the government officials if a need arises.

Through all this, we will be working with the government officials. Our approach is to strengthen their hands by providing more human resources at their disposal.

How can you get started ? I will tell you what I did. I called the Municipal Commissioner. Within an hour he had connected me to three of his officials who have been coordinating with me ever since. I urge you to work with the local authorities.  

I would recommend that your offer will really be useful if you go in a group. It becomes easier for them to coordinate with a group than having to deal with each volunteer individually.

Does this not expose you to risk? Yes it probably does. But then, have you wondered why the civic authorities should put themselves at risk? And no, this is not what they signed up for. 

So, our volunteers will take the same precaution that civic authorities are taking.

Get out to Volunteer.

Remember, there was life before Corona Virus. And there will be life after Corona Virus. Because you would have done something about it.

Letter to my colleagues

May 20, 2024 Dear colleague,  You may have seen from the financial results for the year ended March 31, 2024 that IRIS is now in the 100 cro...