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business
leaders > speeches
> R.
Gopalakrishnan |
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The leadership challenge: direction
and destination |
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R. Gopalakrishnan*, executive director,
Tata Sons, explains the need for and importance of direction
in today's business leader.
In all forms of organisations, managers face issues and
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seek solutions. In the
earlier part of one's professional career, one is dealing with
known issues and known solutions. All training methods help
professionals to migrate to handle higher responsibilities,
the highest being when one is dealing with unknown issues having
unknown solutions. Therefore, top leadership by nature is risky.
It is this syndrome that causes people to read books, learn
from others' experiences and try to emulate success formulae.
This too is not easy.
As Nobel Prize winner Douglas North postulated, to succeed,
a country must have good policies and good institutions. It
is not too difficult for one country to emulate the policies
of another but it is far more difficult to emulate institutions
because institutions include not just the laws, regulations
and their enforcement but also their social norms and belief
systems.
I came across an interesting viewpoint from A. D. Moddie1.He
argues that a central, bureaucratic state spread over most
of India existed for only five centuries out of the 25 centuries
of national history Maurya, Gupta, Mughal, British
and, of course, the post independence state. Therefore, for
most of history, India has been a loose confederation of regional
states held together by culture and trade. During these 20
centuries of loose confederation, there was no central service,
revenue system, foreign policy or standing army. Therefore,
over a long period, leaders have learned to tolerate ambiguity,
which is non-destructive but not constructive.
In India, we are collectively engaged in an extremely complex
task of modernisation and deregulation, the outcome of which
is uncertain as well as ambiguous. Each day's news assails
common folks with self-doubt about whether the country is
headed the right way with the right leadership. In the past
centuries, one could make poetic virtue of this ambiguity
and uncertainty as did John Keats, who wrote to his brothers,
George and Tom, in 1817 about "the virtues of negative
capability when a man is capable of being in uncertainties,
mysteries, doubts without any irritable quest after fact and
reason."
The challenge of future leadership is to understand the root
causes of ambiguity, establish the high leverage nodes, and
act to influence the behaviour of the system. In a climate
of uncertainty, leaders look for maps of how to get from one
place to a target destination. Psychologist Karl Weick has
pointed out that maps can help in known worlds which have
been charted before. Where the world has not been charted,
the compass is required, he argues, because amid uncertainty,
it gives you a general sense of direction. One needs to rely
on one's instinct to move ahead. To appreciate better the
metaphor of map and compass in organisational leadership,
I would like to briefly delve into the actual world of the
map and compass.
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The map and the compass
The early history of the compass is less clear than the history
of maps. Historians2 believe that Mediterranean and Chinese
navigators possibly used the magnetic compass to guide their
ships in around 1100 AD. Until the 14th century, shipping
trade in Europe stayed close to the shore because it was dangerous
to stray too far from the coast and its landmarks. The ships
were also light and crude, scarcely different from the ones
that plied during the Roman times and Middle Ages. For centuries,
mariners refused to rely too much on the compass. However,
by the start of the 15th century, a begrudging respect grew
for the compass and innovations were made very rapidly.
Maps on the other hand are much older. The oldest existing
map appears on a clay tablet made in Babylonia around 2500
BC. Claudius Ptolemy gave shape to the subject in 150 AD when
he brought together his eight volumes entitled 'Geography'.
European cartography advanced in the 14th century because
of two developments: first, the translation of Ptolemy's work
into Latin and second, the invention of the printing press,
which facilitated duplication of maps.
Thus, from the 14th century onwards, advances in shipbuilding,
innovations in the compass and advances in cartography all
converged to lead to the great adventures in exploring and
conquering new lands across the oceans. This changed the world
permanently over the next several centuries.
It is instructive to conjure the difference in compass-led
versus map-led managerial leadership experiences by referring
to the usage of maps and compasses in the field of navigation.
There could be no map without charting the course. The course
could not be charted without straying far from the shore.
The shore could not be strayed from without a good compass.
As it has been written, the sailor felt that he was left in
a vast and indistinguishable space with no way of knowing
where he was or how to return home. Over a hundred years ago,
C. Raymond Beazley wrote about 14th century oceangoing: "
dragons
and demons preyed upon the unwary and whirlpools destroyed
any adventurer." Of such challenge is the task of modern
leadership. It is dangerous and risky. Leaders need a better
compass to navigate this ocean of uncertainty.
Why is the course uncharted?
Leadership is about change, and change can be technical
or adaptive3. When organisations face problems for which
solutions are known, i.e. maps are available, then the
bosses set out to do the work and they do so by applying
available current know-how, e.g. structuring an acquisition
or merger. This kind of leadership is somewhat safe.
However, organisations also face large issues for which
there is no ready solution. The solutions have to be
discovered through adjustments and experiments, e.g.
consummating an acquisition or merger through the people
in the organisations. In this situation, adaptive change
is required which means the grassroots people with the
problem have to do the work by learning new ways. This
type of leadership is risky; change appears dangerous
to people because they confront loss or challenge to
lifelong beliefs. The leadership challenge is to disturb
people, but only at a rate they can absorb. Think of
the leadership challenges at the national level posed
by the piloting of reform in the power sector or disinvestment.
It is dangerous because the leader risks being marginalised,
diverted or attacked, evidence of which is visible everyday.
This happens at the corporate level too. Jamsetji was
criticised when the Tatas bought a sick textile mill
at Bombay in 1886. It took him eight years to pitchfork
this unit into the top bracket of India's textile mills.
After Dorab Tata hugely expanded the Jamshedpur steel
capacity in 1916, prices collapsed and the steel company
was in danger of closing down. It took a pledge of his
personal wealth and some providence to rescue the fledgling
company. More recently, when Ratan Tata proposed the
payment of subscription by Tata companies to shares
of Tata Sons and to a Tata Brand Equity Fund, there
was huge public criticism. Eight years later, the financial
and brand benefits to the wide body of shareholders
are visible all around.
And so the areas of criticism continue the launch
of Indica, the entry into telecom and, for sure, others
to come in the future!
Some commentators define good leadership by studying
unsuccessful leaders4. Coriolanus, the Roman general,
was a great warrior, a man with a strong moral sense
but an utter inability to reach out to the people of
Rome and engage them in his vision. His mother encouraged
her son repeatedly, but Coriolanus just could not connect
with his people because he was somehow convinced that
doing so would compromise his integrity. Shakespeare
opens his tragedy play, Coriolanus, with the Romans
on the street being addressed by a citizen, "First,
you know Coriolanus is chief enemy to the people. Let
us kill him, and we'll have corn at our own price. We
are accounted poor citizens, the patricians good
the leanness that afflicts us, the object of our misery,
is as an inventory to particularise their abundance
the gods know that I speak this in hunger for bread,
not in thirst for revenge
" There are several
modern day versions of Coriolanus.
Doug Ivester lasted 28 months as CEO of Coca-Cola after
the legendary Roberto Goizueta. He was seen poorly for
his insensitivity to ethnic minorities, his inadequate
response to adulterated coke in Europe and several other
failures of adaptive capability. Eckard Pfeiffer of
Compaq was fired for surrounding himself with yes-men
and ignoring those who would speak truths to him, thus
isolating himself from employees and customers. As Aldous
Huxley observed, "Experience is not what happens
to a man. It is what a man does with what happens to
him." To the extent one can validly isolate one
single quality that determines success, it is adaptive
capacity, i.e. that ability to understand context and
the capacity to struggle in the experiences encountered,
but not get stuck in them or get defined by them.
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Sensing Thinking Doing Correcting
The compass was used in the early days of shipping through
a four step process, i.e. sensing thinking
doing correcting. Since there are no simple
ways for organisational leaders to avoid the risks of leadership,
these four steps suggest a good way for them too to use.
- Sensing
The homing pigeon is unique in that it has a sense of direction
(compass) as well as a sense of location (map). Jonathan
Hagstrum, a researcher at the US Geological Survey, has
postulated how. Pigeons can hear very low frequency sound,
called infrasounds. When the ocean waves bang against one
another, infrasounds are generated. Infrasounds travel thousands
of miles from their sources, so the pigeon always has a
sense of where the ocean is. These infrasounds also reflect
from the local terrain like mountains and cliffs, so the
bird gets an excellent acoustic picture of its surroundings.
This is what makes the pigeon's compass and map sense so
unique.
On Sunday, 29th June 1997, a great race was held to celebrate
the centenary of the Royal Pigeon Racing Association.
More than 60,000 homing pigeons were released at 6:30
a.m. from Nantes, France flying to lofts all over Southern
England. They should have arrived at their lofts by early
afternoon. They didn't. A few thousand out of the 60,000
straggled in over the next few days. In pigeon racing
terms, this was a disaster. What happened? Hagstrum found
that at about 11 a.m. when the pigeons were crossing the
Channel, a Concorde airliner was flying along the Channel.
A supersonic airliner generates a shock wave down towards
the earth, almost one hundred miles wide. Most of the
birds must have been caught in this shock wave. This prevented
them from listening to the infrasounds which guided them,
thus they lost their bearing and their way.
The most important requirement for a leader is not to
get caught in a shock wave that prevents him from sensing.
Jamil Mahuad had been a very successful mayor of Quito
province and probably therefore he was elected president
of his country, Ecuador. Eager to show quick results,
he became very focused on providing a short-term remedy
for the mounting problems of his countrymen. Later he
himself admitted, "I have lost my connection with
the people." On the other hand, when Lee Kuan Yew
first became prime minister of Singapore, he took precious
time from his daily schedule to learn Mandarin, the language
of his constituents.
- Thinking
Thinking about the context, thinking networks by not only
finding allies but keeping close to those opposed to the
new ideas are all part of a success plan. For many years,
as a competitor from Unilever, I had been an admirer of
P&G. I was quite surprised to see the departure of Durk
Jager who took over in 1999 from his legendary predecessor,
also known as the Prince of Darkness. Durk Jager was a man
of considerable vision who saw the need to modernise the
tradition-bound consumer goods giant. Jager planned a complete
organisational overhaul, a cultural revolution. He moved
before he was able to get the rest of the company behind
his innovative plan for change, before he could form networks
with allies. It does not matter whether his plan was good
or not, he never managed to communicate the urgency and
superiority of his new vision for the company. He did not
survive the turmoil he unleashed, in large part because
he did not think networks and allies.
To survive and succeed in exercising leadership, you
must also work as closely with opponents as you do with
supporters. In fact, opponents deserve more of your attention
not only as a tactic of strategy and survival but also
sometimes as a matter of compassion. Consider how our
national leaders deal with the disinvestment issues. By
its very nature, there will be conflict and heat, so the
leader needs to create a holding environment within which
people can tackle tough, divisive questions without flying
apart.
The late Rajiv Gandhi lost the 1989 election, partly
because he was seen widely as westernised and elitist.
In fact, it was Mrs Gandhi who really launched economic
reform in 1980, rejuvenated in 1985 by Rajiv and abandoned
by him in 1987. In 1991, Narasimha Rao faced pressure
from the reformers for a Big Bang approach. Very boringly,
he chose the middle path, which he articulated at the
Tirupati Session of the Congress party. By not decrying
Nehruvian economics, by projecting his policies as a continuity
with the past, by being seen to learn from Asian experience
rather than Western experience, Narasimha Rao created
networks with his allies as well as ways to track his
opponents.
- Doing
Many leaders are excellent thinkers. They develop the correct
visions, often grand ones. They go public with their thoughts
or even launch their initiatives in the hope that somebody
will dot the I's and cross the T's. Then too late, they
notice a gap between what they want to achieve and the ability
of their organisation to achieve it. Strategies often fail
because they are not executed well, not because they are
bad strategies5.
Richard Thoman was CFO at IBM, a protégé
of Louis Gerstner. He was a highly respected strategist.
Xerox hired him in 1997 as COO to usher in change. As
COO, he launched numerous cost-cutting initiatives, and
laid the groundwork for a new strategy. Two years later,
the board elevated him as CEO and he was one of the most
thoughtful people to head a major American company. At
his first annual meeting as CEO, Rick Thoman told his
shareholders that Xerox was poised on the threshold of
another period of great success. The stock prices shot
up to new highs.
One year later, Rick Thoman was fired by Chairman, Paul
Allaire. What went wrong? Thoman had launched two major
initiatives both of which were necessary and important.
One related to consolidating the 100 administration centres
of the company, and the other related to re-organising
the 30,000 strong sales force. Xerox's clubby culture
had not quite taken to an outsider and so he was too aloof
to connect with the people who had to execute the changes.
So, the organisation failed to execute Rick Thoman's vision
and promises, morale dropped, cash flow from operations
went negative and the stock price plunged.
While strategy thinking has been recognised and taught
as a discipline, strategy execution has not. Top management
knows deep down that something is missing when commitments
consistently fail to get delivered. They search and struggle
for answers, benchmarking competitors, rationalising the
differences and looking for answers in the organisational
processes, culture and structure. In the name of delegation
and trust of subordinates, they fail to do persistent
and constructive probing, e.g. Where will the increased
sales come from? What will competitors do? What if the
economy takes a turn? And so on.
Apart from the lack of execution discipline, another
enemy of "doing" is the misjudgement of how
to pace the work. In 1994, President Clinton recommended
sweeping healthcare reforms that involved radical changes
in the financing and delivery of healthcare services.
To generate that magnitude of change, Clinton needed a
process of education, explanation and persuasion that
would have taken years with small experiments all along
the way. However, Clinton believed that his election in
1992 gave him the mandate and he pressed ahead with his
proposals. There was great opposition, his own popularity
crumbled and the media wrote stories wondering whether
he was still relevant!
- Correcting
When a leader has sensed, thought and done a few things,
signals for corrective actions and improvements emerge.
Those have to be picked up, internalised and actioned. This
requires the leader to engage his top team in collective
learning. A good way to illustrate this is through an example
from nature:
In the Britain of the early 1900s, milk bottles supplied
to homes were without any caps. Two garden birds, the blue
jay and the robin, had both perfected the art of sipping
cream from the bottle. After the World War II, tin foil
caps on bottles were introduced. The blue jays soon learnt
to peck the caps open and continued to sip the cream while
the robins could not. On researching the success of one
species, zoologist Alan Wilson found that blue jays moved
in flocks of 14 or 15 birds. The parents stayed with their
young ones till they were old enough to take care of themselves.
Hence, the learning by one bird was quickly and efficiently
shared among the entire flock. On the other hand, the robin
was a loner. The male robin defended his territory rather
fiercely and was antagonistic to other birds of the species
if they came too close. Hence, sharing between robins was
non-existent. His conclusion was that innovation, social
propagation and mobility allowed blue jays to enjoy the
cream and grow healthy.
Conclusion
I would like to conclude by expressing optimism about the
future of our country and her people not because it
is a nice way to conclude but because in our own uniquely
Indian way, we are facing up to the emerging leadership challenges.
In our bouts of despair, we forget how much we have changed
in 15 years no need to shop anymore for the family
on foreign trips, multiple choices of cars, deep penetration
of communication and media with more to go. Surplus food and
foreign exchange were not conceivable to us just 10 years
ago. As Saint Tiruvalluvar wrote in the Kural several centuries
ago:
If those who think to achieve,
Have a firm and focused mind,
They will realize what they thought of,
And even as they have thought of.
"While it is imperative to learn to live with and,
in fact, manage change for success the bedrock of a
lot of business lies in its approach to - ethics and integrity.
This will form the basis of the session being led by Mr P.
M. Sinha early tomorrow morning."
References
1. The Failed Mahabharata by A. D. Moddie
2. Ruling the Waves by Debora L. Spar
3. Leadership on the Line by Heifetz and Linsky
4. Geeks and Geezers by Bennis and Thomas
5. Execution by Bossidy and Charan
*Keynote address by R. Gopalakrishnan, executive director,
Tata Sons Limited, at the Eight Annual Chief Financial Officers'
Roundtable organised by IMA India in Jaipur on, February 15,
2004.
Courtesy tata.com
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