Sustaining Competitive Advantage Through People- The Practice in ITC

NIPM – ISTD SEMINARJune 29, 2012

Hyderabad

Sustainability

Vision and Values

The last 100 years…..

• Unflinching adherence to the tenets of the “Living Company”

• “Trusteeship” and the desire to build a timeless “Institution”

• Our “Indian Soul” and “Putting India First”

• Commitment to the “Triple Bottom-Line

ITC’s HR Framework: Anchored in our Vision and Values

• Customer-obsessed• Competition-differentiated• Performance-driven• Future-capable

Sustain ITC’s position as one of India’s most valuable corporations through world-class performance, creating growing value for the Indian economy and the Company’s stakeholders

Competitiveness

Organizational Competence

Horizon 1Defend & expand current products, markets, capabilities and maintain leadership status

Horizon 2Blend skills & competencies residing indifferent businesses to create new engines of growth

Horizon 3Create new capabilities for viable businesses in future.

Time

Profit

Growth Strategy

ITD :Branding, Distribution

& Mfg Mgt

PPD :

Packaging

Competencies

ABD :

Sourcing of

Agri produce

Market packaged prepared Foods & Staples

The Foods Business

Hotels :

Understanding of

Indian palate

Blending our capabilities

Advantage

Alignment & Engagement

(THE ITC WAY)

Mera Hub Mera Plan

Ownership

amongst front-line employees

The Governance Structure

• 3 Tier Structure– Strategic Supervision by the Board– Strategic Management by Corporate Management Committee– Executive Management by CEO and Divisional Management

Committees

• Distributed leadership to ensure focus in a diversified context

• ‘Venture capitalist’ approach by Management Committee

• Businesses are investment centres

Role of Head Office

• A paradigm shift from “How can I control” to “How can I add value?”

• Head Office not the apex of a pyramid but a Strategic Centre

• “What additional value are businesses deriving from being part of the ITC Group?”

• Therefore, from “controller” to “enabler” and from “centralisation” to “empowerment”

• Aligning businesses with Corporate Objectives through strategic levers of control

The Report Card1996 2011

Turnover (US$) 1.14 bn 6.80 bn 500%

PAT (US$) 0.06 bn 1.11 bn 1750%

Market Cap 1.24 bn 31.2 bn 3000%

Portfolio Cigarettes, Tobacco, Paper, Packaging, Hotels

Cigarettes, Tobacco, Paper, Packaging, Hotels, Foods, Personal Care, Lifestyle, IT, Education & Stationery Products, Matches / Agarbatti, Rural Marketing, Agri Business

Attrition amongst Senior Management in the last 5 years

Less than 1%

Average tenure of Senior Management

25 years +

Top Management 95% joined ITC as Management Trainees

ITC’s Agenda : the next 100 years

• Our collective aspiration is that ITC continues to remain a relevant institution

• The people of ITC must believe in the concept of “virtuousness” – the most ennobling behaviours and outcomes, the essence of human kind, the highest aspirations of human beings

The next 100 years…..

Our people must ask themselves not only whether they are achieving their goals and creating value, but must also ask:

–Are we fostering our finest?–Are we pursuing the highest human potential?–What is the highest in us?–What is the best thing to do?–How can we leave a legacy of value?

The HR Agenda

Nurture an organisation where people seek

not only profit, prestige or power,

but beyond !!!

Compassion, Wisdom and Fulfillment

Thank you