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But every success story has its dark side. And the side effects of Chandra’s super hit low cost formula has spawned a human resource problem. Let’s go back a few years. In 2005, Zee TV bounced back with fresh programming giving a serious threat to Star Plus’ supremacy in the category. In fact, Zee actually outshone Star Plus in TRPs in the prime time band for a few weeks. But they couldn’t sustain the lead for long and Star Plus soon reclaimed its position. So what actually happened? The low cost employee strategy backfired! The key people in their creative team and programming, which were working on major shows at that time, moved on because they got better offer (read: fatter pay packages). Vivek Bahl the then Creative Head of Zee TV moved to Star Plus and Ashwini Yardi the then Programming Head of the channel joined Viacom18’s Colors. As the big man himself admits, “Last year when all these fresh news and entertainment channels were launched many of our people were offered and taken at three to four times more salary than they got here.”
And it’s not just money! “The negative of being a family run business is that objective decision making is not always there,” feels Publicis’ Gupta, believing that the group has suffered because of this. Take the example of ICL: Sources confirm that ICL was conceived in 2005 itself, but the bureaucratic procedures delayed its launch by two years. “Imagine if ICL was launched in 2005 it would have divided the international cricket in two factions, taking the entire world by storm,” exclaims a source familiar with the development.
Clearly, like a few other family run businesses, Essel Group lags when it comes to giving freedom (especially financial) to its senior management. This probably is one of the reasons why key senior guys at Zee have not stuck around for long. Chandra himself admits that there have been some such conflicts in the recent past, especially when some in the senior management felt that Zee should spend like others are spending. But Chandra remained adamant. “That’s why there were some exits in senior management last year,” he adds grimly, perhaps hinting towards the exit of Pradeep Guha (the ex-CEO of ZEEL, who was used to the high cost spending style at his previous job in Times Group). Rajendra Sinh, Corporate Director HR, Essel Group, candidly observes, “Non performing assets even at senior level are not accepted. There have been some wrong hirings in past and that’s why the high churn rate at Zee!!”
At a time when high-flying consultants are paid millions of dollars simply to reiterate the important role of human talent in any organisation’s success, this candour toward its people resource may be the biggest chink in Chandra’s shining armour. At a time when the entertainment sector is witnessing unprecedented new-entrants, and when innovative programming is the key to retain eyeballs, Chandra is losing many of his best creative people. But the simultaneous economic slowdown and the resulting ad revenue slump that its most likely to serve up is certain to make Chandra’s low-cost mantra win yet again. Game, set and match... Now, that’s what we call a real SURVIVOR’S DESTINY!!
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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