The Crisis Leaders

While his peers may combine charisma with forcefulness, the Rs 623-crore Indian Hotels' CEO, R.K. Krishna Kumar--airlifted into the hot seat 2 years ago--is blending quiet determination with systems thinking to bring the hotel chain back into contact with the customer.

"If you can't build a global brand, you will be a prime target for a takeover. The Taj Group could go that way if it doesn't clean up its act. My task is to prepare it for global competition."

"My personal philosophy segues beautifully with the Tata philosophy. Indian Hotels was started by Jamsetji to put out of business a transnational that had insulted him!"

"Even after all these months that I've spent in my new job, I'm still not quite sure everyone on my team is really on board, which makes things even more difficult for me."

THE PERSON

Name: R.K. Krishna Kumar
Age: 61 years
Educational Qualifications: Bachelor's Degree, University of Madras, 1960; Master's Degree, Presidency College, University of Madras, 1962
Work Experience: Joined Tata Administrative Services, 1963; Vice-President, South India Plantation Division, Tata Tea, 1982-88; Joint Managing Director, South India Plantation Division, Tata Tea, 1988-89; Managing Director, South India Plantation Division, Tata Tea, 1991-97; Director, Tata Industries, 1996...; Vice-Chairman & Managing Director, Tata Tea, 1997... Managing Director, Indian Hotels, 1997...

Straddling strategy, conviction, and insecurity all at once, Rayaroth Kuttammally Krishna Kumar (KK) is back to fulfilling the mandate that circumstances and his employers--the Tata Group, of which he is a loyalist of 36 years' vintage--keep thrusting upon him: that of leading his company out of crisis. First, it was Tata Tea, where he had to combat near-death for almost 9 years as a result of both competition and militancy. Now, it's Indian Hotels, where he was hurriedly brought in by Group Chairman Ratan Tata, 24 months ago, after the stormy departure of Ajit Kerkar.

"I seem to thrive on crises," acknowledges the 60-year-old KK, who has been fighting battles on 2 fronts at the hospitality company. First--or is it second?--he had to re-introduce strategy and planning to the company. And second--or, perhaps, first?--he had to dismantle the strange framework of individual freedom without accountability that he says his predecessor had created. Underlying both, of course, was the personal challenge of inducing the workforce he inherited to shed their suspicion and scepticism about him--and to start believing in KK instead.

Recounts KK: "I knew nothing about the company, nothing about the industry. But the Group needed me to be there, and there was no question of refusing." It wasn't--still isn't--an easy task. For, not only had Kerkar involved his family and himself closely in the hotel chain's operations, he had also ended up creating an organisation that was a little more feudal than it was professional, a little more deal-driven than it was customer-driven, a little more federal than it was centralised. All of these may have, in some curious fashion, produced results under Kerkar, but they could not, obviously, be continued by the Group Man.

What made it even more difficult was the fact that KK came in as a rank outsider, who had no experience in the industry, to lead people who had spent all their lives in the business. Admits KK: "It's been a long haul, a very tough time, and it isn't over by a long shot. Transition is always traumatic, and I guess I've been particularly challenged. I have had to learn the nuances of the industry in double-quick time while, at the same time, trying to change the way business was done in a company that has been successful for the last 30 years."

The new assignment would have been all-consuming in itself, but there was worse. At exactly the same time, the controversy over whether Tata Tea was funding militants in Assam broke, leading to, inter alia, intense, 8-hour-long interrogations; a blaze of adverse media coverage; and widespread doubts about the credibility and the ethical standards of both the company and the individuals who headed it. Shudders KK: "I don't think any CEO has gone through that kind of horror."

At first sight, the Tata Administrative Services alumnus--known to be a hand-picked confidante of Ratan Tata's, in whom he inspires a level of trust that few chieftains in the Group do--seems an unlikely candidate for sweeping out the old or bringing in the new. A natty, if conservative, dresser, he habitually sports a well-cut dark suit and the perfectly-knotted tie. The smile is genial and the handshake, friendly. In fact, it is only in the determined set of the jaw that an amateur physiognomist would essay to detect a steelier side to his character.

Sure, KK has never been a confrontationist. Agrees R. Gopalakrishnan, 53, Executive Director, Tata Sons, who was in the opposite camp as the former CEO of the (erstwhile) Brooke Bond Lipton: "KK is a strong, focused, articulate professional. We used to have these huge clashes across the table. But he has never allowed our professional differences to come in the way of our personal relationship. That's part of the art of leading: to be able to disagree agreeably."

Still, mettle has been in evidence in the leadership that KK--a self-confessed believer in swadeshi, thanks in part to a family whose members revered Gandhi and Nehru--has provided to the company he manages. And he proved it quickly by creating and communicating a vision that immediately conveyed that he had a future in mind for his people to aim for. Spells out KK: "My vision for the Taj Group is for it to be a select chain, globally present, Asian, perhaps, in character, but absolutely international in terms of systems and processes, and with a strong West European focus." What, then, are the principles that can be extrapolated from the practices that KK is adopting to fulfil this vision?

THE STRATEGIC BACKDROP. Sprawling global expansion is giving way to focused overseas extension. Growth areas, such as Asia, are being targeted for new properties even as those in stagnant markets are being shut down. A new ad campaign, to re-establish the Taj brand as a discerning choice, has been launched. And common standards of quality are being identified and laid down. Says KK: "Kerkar did a great job of expanding the chain physically but, somewhere along the line, we began to lose out on quality. My focus is on growing the Taj Group in terms of quality."

THE LEADERSHIP APPROACH. Not for KK the laissez-faire of letting his people use their own methods and processes to somehow create a quality package out of the services offered by the company's hotels. Acutely aware that total quality can only come from standardised systems and processes--not from improvisation alone--he speedily replaced the old unstructured freedom with procedures aimed at generating customer-satisfaction.

"The paradox was that while the Taj Group had tremendous style and equity, and was known for its caring, friendly people, the back of the house was a mess. There were no systems in place to ensure zero-defect rooms, on-time service, and things like that," he muses. Agrees Jagat Verma, 59, the coo (Business Hotels Group) of Indian Hotels: "Earlier, Kerkar's highly individualistic management style prevented the organisation from moving towards a systems-oriented structure."

The methods that KK adopted to embed these systems were, of course, quintessentially his own. First, he set up idea-exchange lines with hospitality companies--especially the partners of the Taj Group--around the world, as much to educate himself in internationally-followed processes as to judge the gap between the practices in his company and his rivals. His second step: hiring globally for expertise in managing properties as well as crucial areas like housekeeping and the front-office, with the aim of using these recruits as the conduits for new practices.

Then, having provided the targets as well as the facilitators, he stepped back to allow his people to work out and implement systems on their own. Out of this has emerged top-class solutions, enabling customers to plan entire itineraries without having to make separate bookings.

In the early 1980s, facing the challenge of turning around the South Indian operations of Tata Tea (then Tata Finlay) when it was so far gone that the Tata Group was considering the sale of its estates to the Kerala government for Re 1, KK--who was then their head--stuck his neck out by taking the unheard-of step of bypassing the auction-houses, and going straight to the consumer.

"I recognised early on that company-specific plans wouldn't work. I would have to change the rules of the industry itself," he recalls. It wasn't easy, given the tide of scepticism both within and outside the company. But the move turned out to redefine the rules of tea-marketing.

The first-of-their-kind polylaminate packs that sealed in the freshness of the tea, and brought it to the customer just 15 days after it had been plucked--unlike the other teas that took the auction-house route and only reached the market 4 months after plucking, made Kannan Devan Tea a runaway success. Agrees Darbari Seth, 79, Chairman-Emeritus, Tata Tea: "The company turned around with a vengeance, and Krishna participated very handsomely in the process." Muses KK, without a trace of modesty: "We came up with a vertically-integrated, highly-efficient and effective model, and rapidly grabbed marketshare. It was the only instance that I know of where Levers had the stuffing beaten out of them."

THE STRATEGIC BACKDROP. Indian Hotels is trying to re-establish the association of the Taj brand with friendliness, which had, in the past, earned it the forgiveness of the customer for lapses. To bring back the primacy in its customer-relations, the company is inculcating a customer-first spirit in everyone who works anywhere in any of the hotels.

At the same time, the 3 categories of hotels that Indian Hotels manages--luxury, business, and resort--are being grouped into strategic business units (SBUs), with international operations and air-catering constituting the other 2 SBUs. This is in sharp contrast to the earlier grouping, which was geographical. The objective: grow and market each brand separately, with the responsibility for every SBU with the person heading it instead of ambiguous lines of control.

THE LEADERSHIP APPROACH. It starts with a negative message that KK keeps sending out to everyone in the organisation. "We've lost it," he says. "I don't know how we lost it, but we lost it. Wooing back the customers we've lost is going to be a mammoth, uphill task, but we're going to do it." The lack of proximity to the customer was evident from, among other things, the fact that no customer satisfaction survey had been conducted for years.

The way forward, as KK sees it, is to make sure that the entire Taj team--from the gateman to the CEO--is imbued with the missionary zeal to sell the brand, and make the customer feel she's queen. Says D.S. Chavda, 57, coo (Leisure Hotels), Indian Hotels: "I would say that one of Kumar's biggest achievements has been to make the Taj Group more responsive to the market."

To achieve this objective, KK has decreed that teams of senior people from the corporate office--including him--will regularly fan out to every property, meet people, and customers, and, in his words, "trigger a movement in the Taj Group." Of course, there was nothing in his earlier stints to either prepare him for such direct interactions with customers as a means for leading by example, or to convince him of the fact that such interactions are even necessary.

The learner that he is, once KK realises the value of something, he's quick to adopt it, and to lead from the front in implementing it. In this case, he knew that only his personal participation in the process of transforming the chain--and not just directing change from the corner-room--would do the job. Sums up Sunil Alagh, 52, CEO, Britannia Industries: "KK's style is basically informal. It is based on fostering team spirit, and building commitment through leadership by example. He is a no-frills man, and his underplayed, quiet exterior conceals a steely resolve for success."

Having put the human infrastructure in place, KK went about orchestrating an organisation-wide goal-setting exercise for each brand and SBU. Here, he played the role of conductor rather than composer: it was up to his senior people to work out for themselves what the company needed to achieve. In fact, every decision at Indian Hotels is arrived at democratically, the process being participative. Chuckles KK: "I involve people to the extent of hindering them. People complain they have no time to do their work; they are always going to or coming from meetings. But I think it's important that the system be absolutely transparent."

Actually, this is also KK's way of ensuring that he is not accused by anyone of foisting his ideas on the company. At the same time, it is allowing him to concentrate on strategy issues, leaving it to the individuals running each business to take their own decisions. Admits Subir Bhowmick, 56, Senior Vice-President, Indian Hotels: "One of the fallouts of the restructuring has been the decentralising of decision-making, and the empowering of the coos of each brand."

Moreover, the systemic framework within which this empowerment has materialised is in sharp contrast to the easy-going do-what-you-can environment of the past. To walk the talk, KK has introduced 360-degree assessment--starting with himself. "I am evaluated not only by my peers, seniors, and subordinates, but also by my counterparts in other hotel chains," he says.

In April, 1993, when KK was the CEO of Tata Tea, one of the company's managers, Bolin Bordoloi, was kidnapped by Bodo extremists, who asked for a huge $15 million (Rs 1.50 crore) ransom. KK was in 2 minds. On the one hand, he knew a deal would blot the Tata Group's ethical record. On the other, he had to contend with the sight of Bordoloi's mother on a hunger-strike outside his office.

Not a man to waffle, KK, ultimately, opened up several fronts. On the surface, he ran a huge compassion campaign, initiating daily prayers for Bordoloi's safety and getting Mother Teresa as well as India's Hindu high priests--the Shankaracharyas--to issue public appeals.

Simultaneously, he orchestrated the negotiations that led to the ransom being whittled down to Rs 5 lakh, and, finally, zero. Eleven months later, Bordoloi was released. "It was a terrible time, and we had no idea what we would have done if Bordoloi had been killed," admits KK. But he didn't stop there since he knew an encore was possible. So, he ensured that Tata Tea received protection for its people in exchange for the company's meeting its "social obligations" (read: providing monetary help for medical support, for instance).

THE STRATEGIC BACKDROP. With all the Taj Group's hotels identified as belonging to one of 3 strategic categories--luxury, business, or resort--the array of services in each of them will also be positioned accordingly. The varying needs of guests in each genre will mean placing different focus areas in different categories. This will mean re-orienting the missions of many of the hotels, critical for which is a change in the way the company's people go about their jobs.

THE LEADERSHIP APPROACH. Managing as he does a service enterprise, KK believes that systems must be complemented by using people in the right way. And that effecting change in such a company is impossible without changing key people. So, in addition to senior inductees, he has churned up a shake-up below the stairs. In his first 12 months, KK relocated some 40 people managers outside the executive corridors--including general managers of both profitable and unprofitable properties--to different posts.

"When a person has been in the same place for years, three things happen. A sense of complacency pervades the unit, vested interests develop, and other people's progress gets stunted," he explains. Of course, persuading people to move from what they had begun to think of as permanent locations wasn't easy. Objections a-plenty were raised: children who had board exams to take and spouses who would have to quit jobs, for instance.

But KK wouldn't take no for an answer, convinced as he was that getting new people to play new roles was the only means of energising both the company and the individual. As he puts it: "Organisations need constant change. People need new challenges. It is the difference between running and stagnant water." Seconds Sunil Taneja, 40, F&B Manager, Taj Mahal Hotel, Mumbai: "It is important that people be moved around. A new person always brings a critical eye and a fresh approach to problems that a person who has been around for many years would either accept or overlook. There is a lot to be said for the intermingling of people's strengths which results when people get moved around."

At the same time, KK knew only too well that it would have to be worth his people's while to adopt these new systems and responsibilities. Benchmarking compensation-levels was one of his earliest tasks, and the results show that Indian Hotels' people were paid upto 25 per cent less than their peers. Despite the fact that the previous year had been annus horribilis as far as the hospitality industry was concerned, he raised compensation across the board by 25 per cent. Morale zoomed. Now, he plans to offer the same level of increments again--but, this time, linked to performance.

The other side of the same coin: he will let people go if they do not perform. "There was a time, 10 or 15 years ago, when I could carry some extra passengers," he insists. "Not any more. I need to have all my cylinders functioning properly and on time. I would have no hesitation in sacking someone if he or she didn't perform." It was a new concept at Indian Hotels, and it needed KK's determination to drive it home.

Back in 1994, KK brewed Tata Tea's plan to acquire the tea company, Tetley, with whom it had floated a joint venture in India. His logic? "I believe that, in the future, it will be the ownership of global brands that will determine the destiny of companies and the destiny of countries. They will be the instruments of protection for a country, just as guns and bombs are now," he avers. KK's gameplan was to use the Tetley brand--the market-leader in tea-bags in the UK and Canada, and a close No. 2 in Australia--to market Tata Tea's produce around the world.

His idea was to marry Tata Tea's expertise in cultivation and packaging to a well-known brand, and, thus, grab the margins on branded products. Ultimately, the GOI's restrictions on overseas investments nipped the M&A plan in the tea-bud, but KK had set off a process which has recently resurfaced in the form of a fresh bid for Tetley. "I believe it is possible for Tata Tea to have a strong presence on every continent and in every segment of the tea market," he says. "But I am out of the picture now. The company's younger managers must share that passion, and make it happen--because it isn't going to be easy."

Catalysing change on this scale has meant spending many more hours at his desk than KK did in his earlier job at Tata Tea. But KK now feels that the fires have been fought, and that he can plan for the long run. That the tensions have eased is evident from the fact that he has gone back to his regular night-time reading: every book on the Unified Field Theory--the quest for a principle combining the different laws of physics, especially relativity and quantum physics--that he can lay his hands on. And he is spending more time with his family.

However, KK can expect his responsibility-basket to be broadened further. Closer to Tata than even the latter's two other lieutenants on the Tata Sons board, Gopalakrishnan and Ishaat Husain, he will have more, not less, on his plate. After all, he, literally, has the inside track in the charmed circle in Bombay House. Says a senior manager in the Group: "That's an edge which outsiders like Gopalakrishnan, Manab Bose, or Kishore Chaukar, who have been inducted into the Group recently, don't have." The fact that KK is on the board of Tata Industries--the Group's vehicle for its charge into new and hi-tech businesses--indicates that he will play a crucial role in its future growth.

So, there is still no time for a holiday, apart from the 2 trips he makes to the Sabarimala shrine in Kerala every year, on one of which his wife, Ratna, accompanies him. "Yes, we still have not been able to take the holiday that we've been planning for years, but I must say that, whenever he is at home with us, he is all there. And that's what really counts," smiles Ratna.

KK will, probably, take that holiday as soon as he has managed to turn the Taj Group into a global brand. In attempting to do that, he is playing to his strengths: a shrewd understanding of strategy, enriched by the awareness that he cannot do it himself, and must, therefore, energise his people to overcome their old ways and accept change. Granted, he lacks the personal charisma and the compelling qualities that create followers out of people, eager and willing to perform their leaders' bidding. He has neither a larger-than-life image nor a track-record that can inspire others into heroic acts of emulation. It's equally true that much of the success that he appears to have wrought at Indian Hotels is impressive only because it involves a dramatic change from the methods adopted by his predecessor. But then, if leaders are made as well as born, what singles KK out is the fact that he concentrates on what he knows he is capable of, without throwing himself into the pursuit of styles that are not inherent to his approach.

If, in the process, he seems like a man in a hurry, well, that's exactly what he is. "I recognise that I don't have time on my side now, as I did in my previous assignment. That probably explains why my fuse is shorter, why I can condone inefficiency less and less, why I'm so short on patience when I feel that someone in my team is simply not sharing my passion. I guess I was a more effective leader at Tata Tea because I didn't have the baggage of the past to deal with," he says. But, slowly and surely, the resentment and resistance are wearing off as the structural changes he has initiated begin to show results. People are beginning to see that accountability across the system is not necessarily a bad thing.

Acknowledges his rival, Ravi Bhoothalingam, 53, President, EIH, which manages the Oberoi chain: "KK is a seasoned professional who has brought about greater commercial focus and quality orientation at the Taj Group. After his arrival, the chain is certainly a more formidable competitor." "I'm finally getting the hang of what makes different people tick. I'm more comfortable now. I'm getting there," claims KK. However, his customers and colleagues must second that before KK's leadership can be said to have delivered just what the guest ordered at Indian Hotels.