Executive Interviews: Interview with Venkatesh Sankaran on Managing Troubled Times
March 2009 - By Dr. Nagendra V Chowdary

Venkatesh Sankaran
Venkatesh Sankaran, Director and CFO, LANXESS India Private Limited

• Cutting down costs of production by effecting in-house economies, bringing down the number of staff, reducing wasteful expenditure, withdrawing staff benefits, stoppage of annual increment or non payment of bonus or putting on hold expenses on advertisement are the steps some of the industries follow to achieve better working results in the present crisis. What steps does your company propose?
  As already mentioned above we are cutting down or halting production in some of our production sites globally. Some employees will be directly affected. As a unique concept, even in the case of plant shut downs it is intended among other things that employees reduce positive balances on the time accounts or use part of the annual vacation. Where these options are already exhausted, LANXESS employees can debit hours from their individual time accounts and bring them back into balance by working extra hours at a later time.

  Reducing staff or staff benefits are short-term measures which could have significant long-term effects. Many companies only speak of reducing their temporary staff, but permanent staff who are well experienced and have a strong commitment will be an asset for any organization, and thus should be retained as far as possible. Costs can also be reduced by skillful asset management and considerable efficiency improvements from production plants, which LANXESS would be focusing on.

• Petroleum products have become cheaper. Froma level of $147/barrel, it is now below $37/barrel. Also, the rupee is now weaker against the US dollar and is around Rs. 47/dollar. Inflation has also come down to below 7%.Will these factors help you to boost losses in the domestic market?
  Not really. As mentioned earlier, we focus more on local sales either directly or through our parent company. Our exports will be around 20%. Unfortunately our products are directly linked to the global Petroleum prices. Thus, with a significant drop in Petroleum prices and also the weakening of rupee against dollar, our customers demand a drastic reduction in selling prices, which becomes difficult for us to meet, as our cost of production for the products in inventory is very high due to the high input price. The drastic and sudden drop in raw material prices has caught us unawares.

• Do you think the liquidity crisis is affecting the placements in the Bschools?
  Certainly yes. Unsustainable offers have been made over the last couple of years by placements in the Bschools and one day it had to come back to reality. So with global recession combined with the liquidity crisis, the correction factor will happen earlier than expected.

• What is your advice for the future managers passing out from these Bschools?
  A fancy building without a strong foundation would crumble one day. Building a strong career, by working in a professional organization, with a sound base and ethical standards, will be the key to success and will pay off in the long run. While adding value to the organization, also add value to oneself. There is no dearth of jobs in themarket. It’s the right choice at the right time which makes the difference. Continue to do what you enjoy doing. Dedication, hard work and willingness to change are the secrets of success which gets adequately rewarded
  Reach higher, go farther, achievemore because you can! Treat all people with respect and you will earn theirs.

1. Troubled Times Case Study
2. ICMR Case Collection
3. Case Study Volumes