While the mishandling of the Jet Airways sacking and reinstatement of 1,900 employees was an HR and PR disaster, the larger implications of what happened are also worth considering. It is not just that the chairman of India’s most successful airline became the butt of jokes (television channels played and replayed Naresh Goyal’s melodramatic interview), it is also a question of what he knew, when he knew it and who did the bungling.
If Goyal did not know of the sacking, as he claimed on TV, it makes one wonder how he functions as the admittedly hands-on chairman of a publicly listed company. I for one refuse to believe that “his management” would take such a grave step without consulting him or taking his approval. If, on the other hand, he did know about it (which, by all indications and according to sources within the company, he did), then what does the hypocritical act that he performed on television say about this aviation pioneer?
Secondly, what makes Goyal think that the same employees who were dismissed so unceremoniously will swallow his spiel on television hook, line and sinker and serve his company with the same “dedication” as before? It will be hard for employees to forget how they were dismissed summarily (many of them learnt of their job loss as they waited for their transport to pick them up in the morning and take them to work), and I will not be surprised if there is a clear divide between those who got the pink slips and those who escaped them. In fact any kind of mass dismissal in future will be very tough for Jet — even if dictated by business imperatives — because, among other things, a union could well be the outcome of this misadventure.
Goyal’s problems go deeper, for he has also failed to retain the loyalty of some of his top officials. His centralised style of functioning has led to an exodus at the middle and senior management levels over the last couple of years. Moreover, just a few weeks prior to the fiasco with the 1,900 employees, Jetlite, the airline’s wholly-owned subsidiary, fired 800 staffers. At that point, Goyal was neither moved by their tears, agony or helplessness; nor did he feel the need to protect what he now calls his family. Nor indeed has it been reported that he got a headache and high blood pressure, or that he suffered sleepless nights when that round of firing happened.
A close friend of Goyal who was instrumental in helping him buy Sahara, says that he was less than impressed with the way Goyal handled the Sahara buy-out, backing out at one stage after giving his word. Subroto Roy, for all that he may be famous or infamous for, emerged as the more dignified of the two. Never once did he speak out openly in the media about what Goyal had done to him and his airline, although Jet’s actions in that episode were certainly questionable.
A few years prior to that, Goyal was commonly believed to have led the lobbying against Tata getting into the civil aviation business — something for which Ratan Tata must now be very grateful!
To his credit, though, Goyal has given the country an efficient, quality airline with professional management and staff, and a level of service that international visitors to India marvel at. One can also admire him for his obsessive drive (one of Goyal’s friends once told me, “I have never known a man so persistent once he has made up his mind. If Naresh Goyal wants to talk to you, no matter which corner of the world you are in, he will get you”). People say that he has a phenomenal network across the world, is a force to be reckoned with when it comes to political contacts, and has a single-minded focus on bettering his airline and its bottomline.
But ego-driven businesses (and aviation, like cars, is certainly one) are notorious for trapping their owners into taking needlessly ambitious decisions. Goyal’s decision to buy Sahara, expand overseas in competitive markets and to focus on marketshare rather than on bottom line over the past year were serious errors of judgment — for which he is now paying the price. And yet, it is also true that his airline commands by far the highest value on the stock market (about four times as much as rival Kingfisher). So, even if it is Vijay Mallya who has more of a cash cushion because of his liquor and beer businesses, it is Goyal who has by far the better aviation company.
Is it possible, then, that the country’s largest airline can go under? Bleeding like never before, and with bills to pay, Jet certainly has its share of problems, but it is inconceivable that the airline will disappear from the skies. If Goyal pulls the chestnuts out of the fire this time, he will emerge as the king of the aviation business in India. That does not mean that his airline will be making a lot of money (airlines rarely do), but he will be exactly where he wants to be.
All the bigger tragedy then, that Goyal has sullied his copy-book with what he did last week, raising questions relating to both strength of character and sense of ethics. In some ways, as is so often the case with first-generation entrepreneurs, Goyal has turned out to be his own worst enemy.
Oct 24, 2008
Business - India;Naresh Goyal is his own worst enemy
Posted by SZri at 3:41 PM
Labels: Business Standard
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