Recently, the founder of Ola Cabs and Ola Electric, Bhavish Aggarwal was in news because of his people management skills. As per media reports, apparently he was found to be abusive and rude with his employees and team members. It was reported that he often used foul language with them and punished them severely for mistakes. This behaviour led to attrition at the top with many leaders in the company quitting. The company’s culture soon came to be branded as ‘hostile.’
Promoter-led firms or promoter-driven companies are organisations, where all the power rests with the promoters or founders of the company. In many such companies all decisions are mostly taken by the founders, while other professionals employed there are just expected to execute tasks and follow orders.
While such a promoter-led environment is very common amongst SMEs or MSMEs, in today’s time, new age companies are no different. That is because, the founders of startups tend to keep control of many things, making the environment similar to the one in promoter- led organisations.
“Toxic promoters do not really treat employees as humans. They regard them as commodities that can be replaced any time. They think they own their employees”
Chandrasekhar Mukherjee, CHRO, Bhilosa Industries
Not just small startups and SMEs, but even some hugely-funded startups and full-grown conglomerates still have a promoter-led environment. This happens because even after growing in size and scale, the promoters are so obsessed with power that they want to keep control of many things in the company.
Talking on condition of anonymity, the HR head of a healthcare startup in India shares that he experiences this promoter-led environment every day. “It actually becomes a mental torture,” he says. He further alleges that such founders who become CEOs of their companies at a young age lack professionalism. All they ever know is how to raise more funds, which actually gets to their head and builds their ego.
Many HR experts say that the primary problem with these founders and promoters is that they see success at a very early stage of their life. Since they lack social skills, they fail to connect with their people and teams. Moreover, their ‘I know it all attitude’ is like the cherry on top.
“Since many founders in the start-up ecosystem come from a tech background, they lack social skills,” says Sunil Singh, CHRO, Stellar Value Chain Solutions.
Also, many founders are not exposed to professionalism and haven’t really experienced careers as professionals with a company. Often, they become CEOs and founders of their startups at a very early stage in life.
“Founders of many of these new age companies, who become CEOs at a young age lack professionalism. All they ever know is how to raise more funds, which actually gets to their head and builds their ego. For employees, it becomes a mental torture”
HR-head of a healthcare start-up
Chandrasekhar Mukherjee, CHRO, Bhilosa Industries, also shares with HRKatha that when it comes to a promoter-led environment, startups and Indian family-led businesses have no difference. “Such promoters do not really treat employees as humans. They regard them as commodities that can be replaced any time. They think they own their employees,” observes Mukherjee.
Singh believes such founders need to first learn to stay grounded and not let the success get to their heads. “Stay grounded, listen to others, respect their views and value their contribution,” advises Singh.
He aptly gives an example of Natarajan Chandrasekaran, former CEO and MD of TCS, and now the chairperson of Tata Sons, who never owned a luxury car till he was the CEO of TCS.
Being open to learning and coaching is another attitude that can bring a positive change in their behaviour. Though many who have worked with such people may feel that such promoters are not often open to coaching or being advised, not all of them are the same.
“Since many founders in the start-up ecosystem come from a tech background, they lack social skills”
Sunil Singh, CHRO, Stellar Value Chain Solutions
On the other hand, Mukherjee shares that promoters need to start investing in their people and at the same time, value their human resource.
Adding to this, Singh also says, “It is for them to decide that and realise that business is not a solo game. They need a team to scale up and if they want to grow, they will have to change their mindset.”
Mukherjee is also of the opinion that in such an environment, the HR is also equally responsible in creating a hostile culture. He adds that the HR in such companies do not really take interest in developing the people. “As the HR, you will have to treat your employees as family,” suggests Mukherjee.
While it is not right to generalise and assume that all start-up founders are the same, of late some cases have cropped up and brought the issue to the limelight.