Indian PSUs:

Is your workforce ready

for digital disruption?
Jayesh Pandey and Shounak Gadre

Public sector undertakings (PSUs) are the nation

builders of India. Over the past couple of decades,
theyve catapulted the country onto the world stage
in sectors from energy and finance to agriculture and
transportation. Now they face a new challenge: digital,
a force thats impacting PSUs from the corner office to
the factory floor. New digitally savvy rivals are gaining
on traditional turf. The question becomes: Are PSUs
ready to build the workforce of the future?
Maharatna. Navratna. Miniratna. The jewels of Indias public sector
undertakings continue to shape the competitive landscape of India,
contributing an impressive 25 percent of the overall gross domestic
product.1 They represent some of the most trusted brands for consumers,
and coveted employers for workers.
Like other leading companies around the world, PSUs are investing in
technology. Particularly digital innovation that will put them ahead of
competitors, making them more agile and competitive. But to date,
one critical element of PSUs digital strategy has been overlooked:
the workforce. Its as if the prevailing thought is, Well invest in the
technology and our people will be digital by default.
But gaining the agility required to compete in the age of disruption
goes beyond systems. It requires a deep shift for PSUs: in leadership,
recruitment and organization. The current PSU culture is not well suited
to such sweeping changes. Accenture Strategy research has identified
the top ten attributes that correlate to successful culture change. PSUs
are on par with non-PSUs in only half of those attributes.2 PSUs rank
in the bottom quartile for the remaining attributes, including talent
management, adaptability and confronting conflict.
In addition, current PSU employees are more skeptical about their
organizations readiness to leverage digital advances. Fewer than half (47
percent) of PSU employees, versus 56 percent of non-PSU employees,
expect to derive productivity improvements or drive innovation from
digital transformation.3 Its a challenging starting point, but the direction
is clear. PSUs in India need to embrace digital or witness their long-held
national dominance quickly evaporate.

2 | Indian PSUs

Accenture Strategy
research has identified
the top ten attributes
that correlate to
successful culture
change. PSUs are on par
with non-PSUs in only
half of those attributes.

1
2
3
4
5

6
7
8
9
10

Leading at the edge

Digital has upended many traditional business models, philosophies
and processes. One of those concerns the idea that leadership
is practiced only at the top levels of the organization, by leaders
who advanced through the ranks of an organization based
largely on seniority. It was a system that worked well in an
environment that was much less volatile and more predictable.
Where skills like organization and delegation were paramount.
While those skills are still important, there are other, more critical
ones in the digital age. Leaders today need to thrive at building crossorganization and industry connections that lead to new sources of
innovation. They need to influence all levels of the organization but
without the authoritarian approach that marks traditional management.
They also need to grasp new technologies and their impact on growth
and gain the ability to experiment quickly and move on if the desired
results arent achieved. PSUs need to open their organizations to
feedback and ideas that lead to innovation. And flatten hierarchies,
cutting out the layers and processes that impede agility.
An influx of young talent signals a truth about PSUs in the digital age:
old school leaders cannot lead digital transformation alone. They need to
build mentors throughout the organization. And push out decision making
to the edges by developing a pool of leaders with high digital quotient.

Your workforce is not

digital by default
The requirements of digitalto tap sources of innovation across
functional boundaries and industriesmeans a change in the way
PSUs are managed. Digital is horizontal. Traditional is vertical.
While PSUs have invested in new systems and hardware to connect
their operations, they have overlooked a critical element: the workforce.
73 percent of PSU employees recognize that digital will seriously
transform the nature of their work over the next three years.4 They
wont be digital by default. Employers must rise to the challenge
and change their current talent pools. Retraining them to handle
new challenges and attracting a much more diverse new team.
Lets take energy as an example, an industry that is increasingly
deregulated and privatized. As the industry shifts to a profit-driven
business model, companies will need to recruit new skills like analytics,
and sophisticated customer relationship capabilities. This will require
expanding beyond the usual degrees in fields like IT and engineering,
to backgrounds in statistics and internet marketing. In some instances,
PSUs may want to tap into non-traditional sources of specialized
skills such as on-line talent exchanges, or third-party partnerships.
3 | Indian PSUs

73 percent of PSU
employees recognize
that digital will seriously
transform the nature of
their work over the next
three years.

Becoming the ratna

of digital
To keep the sparkle in Maharatna, Navratna and Miniratna
there are three things PSUs can do now to lead in digital:

Define a disruptive business model

Because of their traditional reach, and long-established marketplace
presence, it used to be that no other rival could match the strength of a
PSU. But digital allows startups to forgo brick and mortar infrastructure
and rapidly achieve new levels of scale unheard of even a handful of years
ago. Consider the Bank of India and ICICI Bank. In under two decades
time, ICICI Bank has catapulted from startup status to competing neckand-neck with the PSU.5 How? By early on developing an aggressive
online strategy that includes virtual banking and next generation mobile
banking apps, among other digital moves. The message: its time for
PSUs to get serious about digital investment. They need to take an
equity investor approach and incubate digital plays. That requires
redesigning the organization for speed to leap ahead of competition
instead of treating digital as adjunct to their current strategies.

Leaders should learn from juniors

With the long tradition of command-and-control leadership style, this
flies in the face of management wisdom for most PSUs. But to survive in
a digital world, senior leadership needs to turn to younger counterparts
to gain a digital edge. This requires reverse mentoring where senior
leaders learn from their younger counterparts. This learning goes beyond
the basic skills like using apps and internet devices to learning about the
internet of things, leveraging social networks for employee / customer
engagement, and seeing opportunities where earlier none were apparent.
PSUs are taking heed: in the general insurance sector, a raft of
young officers were fast-tracked to the position of general manager
in companies including National Insurance, New India Assurance
and United India, among others. As a result, PSUs are starting to
infuse new blood into their highest echelons.6 Its a shot across
the bows to PSUs that arent moving far, or fast enough.

4 | Indian PSUs

Rewrite the value proposition to create competitive

advantage
To attract and retain the kind of talent digital requires, PSUs need to craft
value propositions that include benefits to society as well as opportunities
for personal growth. Previous generations of Indians were focused on
climbing the socioeconomic ladder of success. Now that many have
arrived, the focus of newer generations is giving back. PSUs, by the
nature of their services, are about contributing to the good of the country.
Companies need only to underscore that in their value propositions to
attract new pools of talent looking for reward through social contribution.
PSUs also need to emulate the offerings of their non-PSU competitors.
Consider National Thermal Power Corporation.7 This PSU launched an
innovative plan to attract and retain young talent at their often remote
locations. They developed the concept of PUPS, which stands for
providing urban facilities at projects. Included in the new facilities are
cafes, libraries, Wi-Fi hotspots and other trappings of city living.

Brilliance of the jewels

For PSUs to continue to hold their luster, they need to change and
adapt to the age of digital. Although more and more are harnessing
the technological power, too many have neglected the people side
of the equation. Thriving in the digital age means changing the way
organizations are structured, encouraging reverse mentoring and
rewriting recruitments value proposition to attract and retain the skills of
the younger generation.

5 | Indian PSUs

Contact the Authors

About Accenture

Jayesh Pandey

Accenture is a leading global professional services company,

providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more
than 40 industries and all business functionsunderpinned
by the worlds largest delivery networkAccenture works at
the intersection of business and technology to help clients
improve their performance and create sustainable value
for their stakeholders. With approximately 373,000 people
serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives.
Visit us at www.accenture.com.

Mumbai, India
jayesh.pandey@accenture.com

Shounak Gadre

Mumbai, India
shounak.gadre@accenture.com

Join the conversation

@AccentureStrat

End Notes
India Today awards the nations best PSUs, from India Today,
August 2014

Accenture Organization Value Analysis, 2015. Top 10 attributes

include operational efficiency, financial fixation, autonomy,
pressure and stress, trust, confronting conflict, talent management,
adaptability, technology and processes, and inspirational visionary.

Accenture Strategy Employee Research on Being Digital,

India, 2015

Accenture Strategy Employee Research on Being Digital,

India, 2015

About Accenture Strategy

Accenture Strategy operates at the intersection of business
and technology. We bring together our capabilities in
business, technology, operations and function strategy
to help our clients envision and execute industry-specific
strategies that support enterprise wide transformation.
Our focus on issues related to digital disruption,
competitiveness, global operating models, talent and
leadership help drive both efficiencies and growth. For
more information, follow @AccentureStrat or visit
www.accenture.com/strategy.

ICICI Bank Source: http://www.icicibank.com/aboutus/about-us.

page?#toptitle

PSU general insurers on promotion spree, elevate 21 DGMs to

GMs from Business Standard, August 2015

Best companies to work for 2013: How NTPC creates a culture

where people work to enjoy and enjoy to work, India Times,
June 2012

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