Business Today

Canon India: Aim, focus, shoot

The team that clicks together stays together—that’s the mantra at Canon India as it takes baby steps to dominate the Indian market.

Tejeesh N.S. Behl        Print Edition: January 25, 2009

Canon India’s Konishi (C) and his team: Growing step-by-step
Canon India’s Konishi (C) and his team
Kensaku Konishi, the 55-yearold President & CEO of Canon India, tries to sound as diplomatic as possible as he reminisces about his experiences as head of an almost 700-strong Indian workforce for the last two years. “Well, they are a young lot— mostly in their 30s—and a bit on the boisterous side, prone to getting excited. So, you need to tell them to speak calmly and not shout—and it’s getting better,” he says, tongue firmly in cheek. Konishi, one of the four Japanese employees, observes that Indians, while being good speakers, tend to be poor listeners, which at times does become a hindrance in smooth operations.

Typifying the youthful profile of the company, Ritu Malhotra, Senior Manager (People Excellence, Human Resource Division), smiles sheepishly at Konishi’s allegation and discloses that they have started a Crucial Conversations programme to develop the listening skills of the company’s workforce. However, the 34-year-old, who has been with Canon for almost four years, dismisses any suggestions of a mismatch between the work culture of a majority Indian workforce and what is essentially a Japanese company with its own work ethos. “At a very basic level, there is a high degree of similarity between the Japanese and the Indian cultures— both laying emphasis on discipline and respect,” she argues.

Kensaku Konishi, President and CEO
Kensaku Konishi
That does not mean that Canon India muzzles its employees. “Compared with a European or an American company, Japanese lay more emphasis on due diligence and detailed deliberation before taking a decision—all this takes some time and can be frustrating. Additionally, with the company paying a premium for collective responsibility, the efforts of an out performer could get shadowed,” observes Alok Bhardwaj, Senior VP, Canon India, who’s been with the company for eight years. In fact, it is this freedom of expression— allowing employees to debate, discuss and experiment—that has been Canon’s biggest draw in India.

Being a sales-driven organisation in India (Canon does not have a manufacturing unit here as yet), Bhardwaj’s observations do have merit, especially if one considers the relatively high attrition rate of 22.27 per cent, though Malhotra contests the figure. “If we take the trends in attrition over the past five years, it has actually shown a decline from 2003 onwards, when it used to be 30 per cent and above, to 21 per cent in 2007, and 17 per cent in 2008,” she points out. “In our software division, for instance, we have managed to whittle down the attrition levels from 30 per cent two years ago to just 8 per cent this year,” adds Malhotra.

She attributes the decline in attrition in part to a realignment of the salary structure of the engineers in the software division. But there still is a pay disparity between what Canon employees earn and what their counterparts at rivals earn—the firm’s salaries are benchmarked at 60th percentile of the market. This, admittedly, does leave a huge chasm for Canon India’s competition to step in and bridge the compensation divide by poaching its talent.

This year, the average pay increase is down by over five percentage points over last year’s pay hikes—and the company admits that salaries are the single biggest reason for its attrition. “Sometimes, we can’t pay the market prices. However, we are here in India for the long term and prefer to grow step-by-step,” says Konishi. With revenues this year expected to grow 35 per cent on last year’s figure to touch Rs 700 crore, Canon’s plans do appear on track.

  • Number of people laid off in 2008.....None

  • Number of people hired in 2008.....285

  • Headcount in Dec. 2008 vis-à-vis Dec. 2007.....693 & 520

  • Headcount post-March 2009......Higher than current

  • Pay-cuts resorted to/ planned....No pay-cuts. Pay hikes being planned

  • One innovative HR practice.....Virtual working, where the entire field sales as well as service staff are ‘virtual’ employees, i.e., they do not have to go to the office every day. They go to the customer’s place directly from their respective homes. They have a home office set up for which they also get a maintenance allowance

Source: Mercer, Company

Konishi points to the growth opportunities within the organisation and the company’s strong brand equity as Canon India’s USP in attracting and retaining talent. Of course, the attrition, in addition to the company’s growth, is creating enough opportunities for Canon India to up its headcount—from 380 employees in 2006, to 520 in 2007, 693 this year and to 825 next year. “What we look for in an individual are not just core competencies— which are essential—but also the flexibility to think on their feet and communication abilities,” he says. Hopefully, all 693 of them are listening.

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