At the Jaipur Institute, amidst all the colour and dazzle, glitter, grace and glamour, RI President KR Ravindran struck a serious note at the outset by presenting his half-yearly report that detailed a serious dent in RI spends, and warned Governors to be timely in submitting their accounts.
After his nomination and acceptance, once things began to sink in, he realised that “unlike politicians I’d have to deliver on the promises I had made — meritocracy in appointments, cutting costs and adding value to Rotary membership.” The good news is that from last year itself he started cutting costs. “As President-elect I came in almost $200,000 below budget. So I can now ask others to cut costs too.”
This year, half way into his term, Ravindran is at only 27 per cent of his budget. “The (Seoul) Convention is coming and costs may go up, but I’m pretty certain that I’ll come in well under budget.”
Some cost saving measures
- Board meet days reduced from 5 to 3, but an extra meeting added to “better evaluate our performance.”
- Spouse travel no longer sponsored by RI; directors on boards of corporates don’t get this perk, so why should Rotarians pay us to take our spouses to Board meets, asks Ravindran.
- President’s Reps will no longerget visa, parking or other fees, for which last year RI spent $93,000.They’ll get return tickets and that’s it; “if you don’t want the job, we’ll find someone else to do it.”
Crème de la crème
Top professionals on RI panels:
Peter R Kyle has a background in corporate law. Oversaw privatisation and financial sector reform in the World Bank. He continued his Rotary experience by involvement in Alumni activities, was co-chair of Peace Symposiums and is current Chair of the Rotary Peace Centers Committee.
John C Matthews has HR and risk management experience working at Costco. He has served as President of Costco Foundation.
Jeroen van der Veer of Den Haag, Netherlands, is the former CEO of Royal Dutch Shell and Vice Chair of Unilever. He is the Chair of Philips, ING Group, and a government institute on promoting and founding technical colleges in the Netherlands.
Thomas J Wilford, with a background in management information systems and finance, was CEO of the $1 billion J A and Kathryn Albertson Family Foundation, a Managing Partner with Ernst & Young.
Selection committees have been set up for appointments to various posts and the “basket opened up to attract professionally qualified people. I started with training leaders and then Trustees.” For Trustees, he only defined the regions from where they should come. “This is the single most important thing that an RI President does; and I was accused of abdicating my responsibility.
I said if this abdication is for the good of Rotary, so be it. I don’t want to cling on to that power. The Trustees, the selection committee came up with, are excellent, and will do good for Rotary,” he said.Ravindran added that President-elect John Germ had gone a step ahead, and in the July issue of The Rotarian,vacancies for various committees such as finance, audit, etc had been announced. “You don’t need anyone’s recommendation; you just apply.”
Professionalising Rotary’s management
The result was 900 applications for 120 jobs; “this way we are getting the cream of the Rotary world.” Some of the committees have the most talented from the American corporate world and top professionals from Wall Street (see Box). “And that’s what I ask of you as leaders of your districts. Don’t appoint your friends to committees just because they are friends or helped you win an election. Make them your advisors, invite them home, give them food or drinks, but don’t put them into slots just because they supported you, because ultimately you are destroying yourself.” He too had been accused of “discarding” his friends, but if “my friends wanted me as President just to support them, they aren’t even my friends.”
Horses for courses
This English phrase should always be kept in mind, Ravindran said, giving the example of a Rotarian who was sent to a top US District. “He is a good man and would have done well in some districts, but there he was totally out of place. He not only ruins the conference; he also destroys the name of your country. Because people will ask, ‘Is this the best material that India can send?’ You must think of that when you say give him a chance.”
Returning to cost cutting, the RI President said that having cut costs at the top leadership level, it was possible to seek RI staff’s help to cut costs. Fortunately, RI General Secretary John Hewko was “extremely proactive and carries the baton on my behalf.” The worst way to cut costs is by cutting staff salaries or increments. “That is nonsense. Because people who run companies know that if you want to deliver, they are the people who’ll do it. You come up with the vision, but they implement it, so if you demoralise them, nothing will happen. And it is very small savings.”
So after assuring the staff that their salaries will not be cut, and in consultation with them, all contracts are being re-negotiated “to try and find savings from a pencil upwards tosoftware.And I am pretty sure that this year our staff will bring in substantial savings, well in excess of $1or 2 million.
Giving an example of cost cutting, Ravindran said he wanted Stanford University to do a course for RI on managing non-profits, including the responsibilities of RI Directors. The price quoted was $100,000 “which we can’t afford. So we went to Kelloggs (North Western University) and others and while Kelloggs and another one quoted $50,000, the third quoted $25,000. RI returned to Kelloggs with an offer of $25,000; I said at the most they can say no, and we’ll come away after a free cup of coffee!”
Surprisingly, two weeks later, Kelloggs agreed to $25,000. By a sheer coincidence he met its top honcho a few days later, and he said: “So you are the guys who made us come down to $25,000. We’re happy to work with Rotary now and in the future. I know that John Germ is also moving in the same direction.”
But, warned Ravindran, all these savings did not mean extra money; “we are on a hand-to-mouth existence; don’t mix up between TRF and RI money! At RI we need funds to modernise and upgrade.” If he had his way, membership dues would be hiked to $100 from the present $57, even if membership dips a little. “We’ll have quality members and enough money to give you for the service that you look for.”
Value to Rotarians
The RI President reminded DGs that RI spent $10.5 million annually on them and they had to deliver. All Board members were measured by KPI (key performance indicators) on membership and TRF goals, youth exchange programmes and visits to districts. “Manoj (Desai) is far ahead of all the other Directors in this.”
Now that the RI Board was being evaluated every three months, “there is no place to hide. They have to deliver. And I expect them to chase their governors to do so and the governors to work with their presidents in the same way. The thinking on the top should trickle down to the bottom like a well-oiled machine.”
He also warned DGs about submitting accounts, of which one copy goes to RI. Those who default on this will “not be eligible for assignments, or any Rotary awards. My advice to governors is if you raise money from anybody for anything, consolidate and present your accounts … we are watching. You have to give accounts to the Rotarians for all the money you’ve raised from the public.”
Coming to RCs, RRFCs, RPICs, etc, these cost the RI exchequer $ 2.4 million a year. “We’ve reduced this by two thirds because we now bring them only for the first year of training. Letters have gone out to them saying if you don’t hit your numbers, you will be changed, even those appointed for three years. So we are working to ensure that your money is being utilised to the optimum.”
To those complaining that the $57 RI dues are too high, Ravindran reiterated that “if they can’t afford this much, they belong to the category Rotary serves. If you can’t afford $57 dollars a year, I don’t think you should be in Rotary.”
Having said that, he added that actually the cost of Rotary goes up because of DGs and club presidents; “you have PETS, pre-PETS, pre-pre-PETS, District election, Treasurer election and so many other meetings. All these are not prescribed by RI. You get to a point when people don’t want to become presidents because there are so many district meetings and they have a job or profession. This is something governors need to watch.”
The Board is now looking at transformational issues, and electronic voting with no hanky-panky was one of them, he concluded.
Pictures by K Vishwanathan