It is important to understand that HR does not operate in isolation. For that matter, any function be it marketing, operations, HR, logistics, IT, none of these functions operate in isolation.
Tell us about your background, journey and upbringing
I come from a place called Allahabad in Uttar Pradesh. That is where I grew and completed my schooling. I did my engineering at Anna University; Chennai and my MBA from SIBM Pune.
My entire work life has been in Banglore, close to 11 years. I have been part of various large enterprises, fortune 100 companies like Oracle and Cisco as well as worked on the other end of the fast-growing startup ecosystems as well like CultFit, DocsApp and now I am with Novopay solutions.
When and how did you narrow down on what you wanted to do?
After my engineering, I knew that I had a bent of mind towards management and understanding people. Whenever I looked at corporations, I always wanted to understand what is the bigger picture, how does business work and how do companies make money.
That is when I decided that MBA is certainly something that aligns very naturally with my interest and I went on to do my MBA. Of course, the underlying aspect of that was to choose a particular stream be it HR marketing or finance operations.
I understood that it has to be something deeply analytical and yet connected to people and in terms of understanding behaviour. That was always my interest area and something that I wanted to build my knowledge on, so I boiled it down to HR and marketing.
Marketing focuses on consumer behaviour, but HR, in general, focuses on people behaviour, typically, employees and other stakeholders. After talking to more people in my network, mentors, coaches and seniors I decided that HR is something that I wanted to pursue.
From there on it was an organic game, learnt more about the field and developed more and more understanding, read a lot, developed the understanding more broadly and in-depth as well and supplemented it with real-time exposure of working in various corporates and startups.
What according to you is the most important quality one must have in order to be a successful HR person?
It is difficult to pin down on just one thing because I truly believe that for someone to be successful in HR, it is a combination of a lot of things.
It is important to understand that HR does not operate in isolation. For that matter, any function be it marketing, operations, HR, logistics, IT, none of these functions operate in isolation.
The very basis of what you are doing should be related to business, so I would say it is important for an HR professional, no matter in which type of company you may be in, you may be in different industry segments, in BFSI or in chemicals, but it is very important to understand the nuances of the business; how does the business make money, who are the customers, what problem are they trying to solve, what is the competitive landscape etc.
One must also look at if you can read through the financial statements like cash flow, profit and loss balance sheet, because then what happens is that it keeps you very grounded, and it helps you to architect solutions in HR which is relevant to the business, against you coming with a certain preconceived notion and start doing your thing.
It is necessary to understand the context of the business and then start building solutions. Of course, there are other qualities that you must understand people as an HR professional.
To be a successful HR professional, I would say it is important to be a balanced left-brained and right brain thinker because at some point in time it is your creative juices that are following, at another point in time you have to do data-driven talent management so, you have to be a balanced thinker. If you were to ask me, one thing that is ground proofing everything in understanding how your business, how your company, how your industry works.
What according to you is the role of ESOPs in building a large and impactful venture?
In terms of total rewards, as we call it, there are various elements that fall into it, one is, of course, your fixed salary and then is in terms of incentives and broadly, there are short-term incentives and long-term incentives.
ESOPs will fall under the long-term incentives or LTI, like all the other components the ESOPS also have their significance in building sustainable and growing organizations. Depending on the stage of the company, depending on the industry in which the company is operating, depending on the kind of talent that the company wants to attract ESOP can play a big role.
Let us say a startup that is in a seed-stage or even it is in pre-seed stage or it has just raised series A, clearly, at that point in time, the startup is still trying to find product-market fit or PMF. It has not raised money but however, for the start-up to be successful, it needs people who are driven, who have a creative bent of mind, who are in it and they have skin in the game.
So especially to attract talent in those kinds of circumstances, ESOP plays a huge role because employees who are coming in will feel that they have a sense of ownership in the company and then they feel the amount of toil and work that they're putting in literally building the company will help in creating wealth.
One is the salary that you draw over time. But also, what is more, important is how do you create wealth. Putting it in a nutshell, ESOP helps in the attraction of the talent, second is the retention of the talent and helping them stay motivated.
Over a period of time, it helps you create wealth for the employee and as the founders or as the leadership team of the startup, you would want to give back to the employees who worked along with you in the very early stages of the company, and not everybody will be comfortable taking that, so in a way it is like a good proportionate pay off for the employees.
In larger companies, typically ESOPs are not given to all the employees, it is a slab-based approach that until unless you have reached a certain level you are not eligible and there again, they have a different fundamental kind of talent that they want to recruit. They have already built a strong employer brand. So, they don't necessarily have to give the ESOPs and within startups also I have seen those types of founders who do not want to dilute or do not have a large ESOP pool for the employee whereas few founders are very convinced right from day one that all their 100 employees will have ESOPs. A lot of it is the founders' mentality also and the company leadership team.
How do you communicate the value of your ESOPs with your employees today?
In terms of communicating the value, it is important that employees are able to see the worth of the ESOPS that is allocated to them in a very tangible manner. So today, the market has a lot of tools where the employees can log in and they can see the total number of each of the ESOPs that were allotted to them, what is the vesting schedule etc.
Typically, there is a four years duration and a 25% cliff period for one year and thereafter it goes on. Different companies have different periods. The employee should be able to see how many vested options that are there, what is the current fair market value of the ESOP, so they should see that if I have been holding these ESOPs, so and so ESOPs have been invested and can see that when these ESOPs were allotted to them, they were valuing X and today the value 3X or 4X or 5X.
The second thing is the opportunity for liquidation and there could be various liquidation events. It could be a simple ESOP buyback. It could be when a company is raising more funds, at that point in time few companies want to do ESOP buyback. Very recently during COVID just because founders wanted to create some liquidity for the employees, even though they were not raising money and few companies had to do certain pay cuts, but then they just went ahead with the option of ESOP buyback to create liquidity, so I think these things play a very important role.
And last but not the least, one should also look at once the employee exits, what is the tenure of these ESOPs and what is the exercise period that you have.
I mean few companies have an ESOP lifetime of close to 99 years also. You can liquidate, whenever the company has an ESOP buyback event and new companies will have a limited period of ESOP. Another thing is how do you look at the buyback price, few companies will keep the excise price very modest, say ₹1.00 or ₹10.00, whereas few companies will go on to say 10% of fair market value or even 25% of fair market value.
I would not say one strategy is better than the other, again, it is the kind of culture, the kind of business sense it is making for the company. But of course, the more employee-friendly it is, meaning if you can keep the exercise price at only ₹1.00 or ₹10 that is a great proposition. Because typically, the price, maybe 300 or 400, and then it would have grown to ₹3000, then, if the excise price is only ₹10 that's a great proposition.
However, after all that is said and done the current scheme of how if you want to execute your ESOPs and convert them into shares and there is no event; it is just that you are exiting the company, then the taxes come into play and those taxes can be quite high depending on the notional profit that you gained.
If there is an event, then, of course, you get the money after paying the tax and you get the balance money otherwise you have to just execute the ESOPS and you do not make any gains. It is just that on the notional profit you are paying the money upfront, so again, different companies have different policies, but these are the various checks and balances one must keep in mind.
How important is building a culture in an organization and What is your view on hybrid working?
One is consciously building a culture and the second is, unconsciously whether there is a concerted effort on building a culture, culture will always exist in a company. There is no company that you can say does not have a culture. Of course, it has a culture. Every company has a culture.
Maybe we are not able to identify it. Maybe we are not able to give a name to it, but when a certain group of people come together automatically a certain set of cultural and shared beliefs, shared values or common language that everybody shares and culture exists.
Now I for one believe that there is no cookie-cutter solution of a good culture or bad culture. I personally believe there is no such thing as good culture, bad culture.
A culture must be something that forms the DNA of the organization and the founders, the leadership team, and the employees 'everybody must work together and understand what is it that we stand for as a company and what are some of the commonly shared values that we stand for.
For example, you know one of the cultural values could be being frugal, now, being frugal can be good or bad depending on how you look at it.
But there are companies like Amazon that operate in a very, very frugal manner. And does it mean that they have a bad culture?
No, Amazon as a company being in e-commerce, operate on very thin margins and they have this philosophy that it is always day one. So they always operate with that frugal mindset.
I think first understanding that there is no good culture and bad culture is particularly important. Now, once you have identified what will be the cultural artefact and the core values of the organization, one has to work constantly towards building it and to ensure that rubber meets the road. The various cultural artefacts must be embedded in the day to day working of the organization.
For example, what is my customer value proposition and how do I look like, am I a customer-first organization or am I an employee first organization and then how does it reflect in the various processes, policies in the day to day working; because that is where the rubber will meet the road.
Another example can be how I reward talent; when I give away the rewards, say the employee of the month or employee of the year and so on so forth. Am I giving them the award for certain values that they live by and how do I measure them? These become especially important and third is there is a concept of physical artefacts also.
I know that today we are not necessarily working in our physical working environment, but physical artefacts of the core values, physical aspects of employee testimonials or customer testimonials play an important role.
With regards to hybrid working, today we continue to work from home, although there are few critical team members like the leadership team who meet in the office occasionally, after taking all the necessary precautions, few things have become slightly challenging to communicate.
For example, typically it is during the onboarding that you will make the people feel welcomed, oriented and we make them meet the leadership team and their peers etc. So now of course we had our own learning journey in terms of how do we ensure that the experience does not get diluted.
Our onboarding process is fully digitized and apart from that, we have maintained the practice of our regular all-hands wherein all the matters of the companies like from business to products to employee surveys so and so forth are discussed and shared in a very, very transparent manner.
Other than that, what is important, is to know and understand that almost a large chunk, if not all, I mean I would say close to 70 or 80% of any employees' experience is drawn by the manager, depending on how your manager operates within the team. I call them mini cultural facets because every team will have its own culture apart from that of the company’s broad macro culture.
We have trained all the managers to upskill themselves and develop themselves of how to manage a virtual team
For example, how we build trust right in our virtual team, how we build psychological safety in a virtual team. So, for all these things we did a detailed workshop over a period of 6 to 8 weeks wherein we learned various management principles to do certain things that have really helped us in terms of creating a solid culture even as we work in a hybrid map.
Which is your favourite book and why?
One of my favourite books is "What the CEO wants you to know". This is a book by Professor Ram Charan. He is a renowned bestselling author, and the book about the business aspect in a very lucid manner, which is easy to understand.
For example, he understands that and explains whether you are a CEO of a Fortune 50 or whether you are a fruit vendor, the aspects of the business remain the same.
Both the fruit vendor as well as the CEO need to worry about the supply side, which is elementary. Both of them worry about the turnover, how often their goods get sold. They have to think about the pricing, the revenues, business forecast and so on.
I would highly recommend that book for everybody to know and understand businesses because especially in my role I work very closely with the founders and the CEO, it is important for me to understand what is their core aspect of approaching the business and company prospect and then build an architectural solution around it.
It is necessary for everyone to understand how business works, it is a different thing if you are working for a nonprofit organization, then the aspect and the motivation can be different. But as long as we are working in a for-profit organization, where we get paid salaries and create wealth, it is very important to understand the larger picture.
It helps you develop the systems thinking that all the pieces of the larger organizations are interconnected. It helps you appreciate how the big picture comes together and you create those beautiful products or services or experiences for your customers. It helps you develop a much more nuanced understanding.
Brief Bio:
Animesh is an MBA Gold Medalist in HR from SIBM Pune & SHRM-Senior Certified Professional with 11+ years of progressive & rich industry experience in Talent Management, Employee Experience, Organisation Design, Talent Acquisition, Total Rewards, Mergers & Acquisitions among others. He has worked with both Fortune 100 companies (Cisco & Oracle) & high growth start-ups (Cult.fit, DocsApp, Novopay).
Animesh has been a serial HR leader with proven expertise in setting up and scaling HR function from 0 to 1 to 10x & beyond in start-ups. He also has global exposure of working with business leaders across Asia Pacific, US & Europe.
At Novopay, Animesh is serving as the Vice-President & Head-HR. Novopay is a fintech co-founded by Srikanth Nadhamuni (Board Member, HDFC Bank) & funded by Vinod Khosla (Sun Microsystems). He is part of the Executive Committee at Novopay reporting to the Chairman. He is managing an HR team of 8 members across HRBP, TA, HR Ops.
At DocsApp, he was the Core Member of the Executive Leadership Team reporting to the CEO. As Head-HR, he managed a team of 10 members across HRBP, TA, HR Ops & L&D. He scaled the organisation 8x from 130 to 1100+ employees & also led the merger of DocsApp & Medibuddy from HR standpoint.
At Cure.fit, he was amongst the first 50 employees of the core team working directly with the founders. He was Head-HR for Cult.fit & scaled the organisation 13x from 60 to 800+ employees & expanded the footprint of Cult centres from 5 to 75+ across 5 cities & 2 countries.
Prior to his startup-journey, he worked at Cisco & Oracle as an HRBP for Engineering & Corporate Functions managing an employee base of 2000+ employees. He was also the employee relations manager for ASEAN, India & Korea.
Animesh has outstanding people & business acumen with excellent stakeholder & team management skills. He has a knack for problem solving & meticulously accomplishing complex tasks.
Interviewed by - Bhavana N
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