Ask Chief Financial Officer of Larsen and Toubro Ltd Y.M. Deosthalee what differentiates the engineering major on the human resources front, and he is quick to list five differentiators, not one. Deosthalee, who also oversees the HR function, says the first differentiator is that L and T is largely owned and managed by employees. "Any one who is good and joins as a shopfloor engineer can aspire to reach the top and become a director someday," Deosthalee says. Not empty words: Of the eight executive directors on the L and T board including Chairman A.M. Naik, seven joined the company as engineers. The only one who is not an engineer is Deosthalee himself.
He says that is how it has always been in the company—it was founded in Mumbai in 1938 by two Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro, and has ever since been owned and managed by professionals. In fact, L and T is among the few large Indian companies that doesn't have a promoter (ITC Ltd is another) so the manager rules the company.
Deosthalee says extensive empowerment allows everyone to be innovative and creative. That's differentiator #2 at India's largest engineering and construction group. What are the other three? The wide range of businesses offer a lot of exposure; employees take a lot of pride in working for a company that claims to be building the country. Then, there are the training and development initiatives in conjunction with the Indian Institutes of Management and other top B-schools.
L and T is a happy poaching ground and the company has done a lot to retain its engineers. It started an infotech arm when the information technology industry started weaning away too many of its young engineers.
Deosthalee points out that the company has started many new businesses in the recent past—finance, shipbuilding and power, among them. "We have allowed our deserving employees to move to these businesses and shift to a faster track in their career," he says. The L and T CFO also chose merit-based performance appraisal as the top factor from the six along with prestige and company reputation. In both these factors the company is ranked in the top 10 companies while its overall rank is 11.