Emulative Leadership Qualities And Their Global Ramification

Emulative Leadership Qualities and Their Global Ramification Dr. R.H.G.Rau President, Rau & Associates, Mumbai, India [email protected]

Abstract The work culture and direction of any organization are created by the people at the top. It is a common knowledge that the task of leadership is to decide what kind of organization they love to manage. In real sense, the leadership is in charge of an organization with tremendous responsibility to shape its climate. Emulative leaders go beyond constancy of purpose and create a vision of greatness, with attention to global commitment. They ensure that the units under their command can and shall make a difference, with the realization that the organization’s mission and purpose are globally twined, and the safe-path leadership, with corporate insulation, is not sustainable. They seek new frontiers of differentiation through sustained innovation and create a global vision with faith to move along a preferred future; a leap beyond what is currently being experienced. Such a leadership demonstratably goes beyond conventional vision with values, mission with purpose and strategy with objectives. The strategy deployment invariably responds to global imperatives and call for competitive and collaborative ambivalence. They move out from creating a limited market space to global arena and shift their faith towards its vastness. The emulative qualities studied on some of the leading Indian corporations are unfolded here; along with their global ramification. Key words Business Drivers, Leadership, Employee Focus, Societal Focus, Globalization

Introduction Every single activity can be directed towards desired results. Outstanding performances are a derivative of sustained perseverance. They do not happen on their own. They are often the result of scientific outcome of systematic efforts. Outstanding performers stand out among others; their friends, colleagues and peers. There is an element of self-pride in achieving great heights in every endeavour.

The importance of World Class performances has been recognized over years. There are several outstanding examples, including Toyota, who introduced several path breaking production practices like Lean Manufacturing, Waste Elimination and Pull System. World class manufacturers are those that continue to demonstrate industry’s benchmark practices. To achieve this, companies constantly strive to be best in the field at each of the competitive priorities, namely quality, price, delivery, speed, reliability, flexibility and innovation. Global companies are aiming to maximize performance in all important areas in order to squarely face competition. They are intelligently deploying resources to allow conspicuous improvements in all key functions, ensuring enhanced performance in all qualifying factors and achieving improved competitive edge. Simultaneously, they are addressing to the societal obligations and aspirations. They recognize that business and social priorities constantly change over time and are squarely facing them with appropriate structured and yet dynamic approaches. Though focus on costs and their control continues to get due management focus, attention to cost reduction alone does not remain any longer the overriding priority. What are being attempted are focused improvements in processes and strict compliance to systems, relevant to customers and markets, and also to society. They are also looking for methods of control that are easier to implement and make the systems work better. These are being viewed as prerequisites in almost all situations, until they are proven to be impractical and ineffective. We all recognize that the globally competing practices are no more abstract or myth; but are standing tall against ruthless market competition and public scrutiny. However, many of these practices, currently towering over others, may trip aside, unless they are made to face contemporary challenging demands.

What is World Class Traditionally, globally leading organizations are known to be attempting to be the best in all the competing profit fields, being the most sought-after product and service provider, continuing to maximize performances and demonstrating industry’s best practices. However this is a traditional way of looking at a world class company. The emerging definition involves the more important 5E’s, namely: • • • • •

Engaging self-imposed constraints driven by societal aspirations Ensuring innovations within them Encouraging several innovative platforms focusing on value chain Engrossing in breakthrough innovations, and Enduring excellence

Within this framework, the world class organizations have a well-oiled agenda of unsatiable growth, being the best among their chosen lines of business and having stretch targets in operations and their outcomes. It is also worth recalling here Jack Welsh’s emphasis on the 4 E’s of the world class leadership; namely, unbound positive energy, ability to energize others, having the edge for taking tough decisions, and the can-execute attitude.

Further, great leaders are working through world class systems, and implementing them with tremendous commitment. Such a system focus is ensuring: • • • • • • •

Consistency in operations Institutionalized improvements Focus on core principles Sustained performance levels System assurance to global customers Leveling field of competition across the globe Acceptance criteria and test methods for new technologies and techniques

The world class organizations are following a process-based quality management system starting from customer needs and expectations and ending with their delivery, with due attention to valueadding activities covering management responsibility, resource management, product design, measurement and analysis coupled with improvement.

Differentiating Practices If so, what are the differentiating practices? Based on Arthur Andersen’s ‘Global Best Practices Data Base’, to uncover breakthrough thinking at world class companies, the most common practices are stated to be focus on customers, desire to create growth, reduce costs and improve profits. While there can be no dispute on these findings, a closer look brings out the differentiating practices of emulative performers as value-driven approach, attention to customer-perceived values, process enhancement and passion for excellence. Value-driven Leadership The leading among the leaders are fiercely demonstrating three un-compromising attributes, as shown in Fig.1, and they appear to be the key performance drivers. Passion to create excellence across all operations, through attention to human behavior is well demonstrated. They are being drilled down through a shared vision and a set of values which are so dearly held.

• • •

Passion to Perform Pride with Purpose Perseverance

Figure 1. The Three Definite Drivers

Every single activity, designed and implemented, is then aligned to the organizational value propositions, such as vision, mission and core values on one side and a set of measurements, covering both financial, and non-financial on the other. Further, managements continuously

review significance of their approach, deployment and the end results and ensure dynamic improvements. The key deployed strategies are given in Fig. 2.

• • • • •

Shared Values Focused Commitment Stretch Targets Competence Creation Breaking the Barriers

Figure 2. The Five Significant Strategies

Customer Perceived Value Companies’ focus on manufacturing and delivering products strictly to commercial and technical contract is becoming a practice of the past. Currently, they are striving to improve efficiency in response to fierce competition, and are providing value for money with better service to customers in particular, and society in general. Customers are able to use a broad range of criteria to make any buying decision, such as performance levels, after-sales service, reliability, maintenance and technical support. Successful companies are also adding value to the basic product or service. Even traditional manufacturing companies are being forced by customers to become more service-oriented. The underlying factor in all these developments is focus on customer and recognition of customer value. There are several learnings from global practices. For instance, Motorola’s Fundamental Value is “Total Customer Satisfaction” and it is everyone’s overriding responsibility. To achieve this objective they have set out: a) key beliefs addressing how they will always act, b) key goals stating what they must accomplish, and c) key initiatives covering how they will do it.

CUSTOMER SATISFACTION CUSTOMER

CUSTOMER CUSTOMER PERCEIVED VALUE PERCEIVED VALUE

SATISFACTION FIGURE 3. Customer Satisfaction vs. Customer Perceived value • Limited to customers and markets • Extends to all expectations Limited to customers and markets • Retrospective Retrospective •• Features oriented

Extends to all • Prospective Prospective •• Benefits oriented

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Features to oriented Relative expectations

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Benefits to oriented Relative alternatives

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Relativefortoimproving expectations Useful processes

•

•

Useful for improving processes

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Relativefortoaligning alternatives Useful with customer behaviour Useful for predicting customer behaviour

Figure 3 : Customer Satisfaction vs. Customer Perceived Value

Today, Customer Sovereignty is the driver. Customers and markets are demanding value for their money many fold over what they are paying. Customer Perceived Value measurement differs from customer satisfaction in each of the related characteristics as given in Figure 3. We may recall here a quote from Mahatma Gandhi, who said way back in 1940’s: “If I were a taxpayer within the jurisdiction of a local board or a municipality, I would refuse to pay a single paisa by way of additional taxation and advise others to do likewise, unless the money we pay is returned fourfold”. Today, possibly tenfold is the demand. Process Enhancement It is now well established that process enhancement is possible only through preventive steps, so vital while managing the processes. All corrective steps mean cost and are being overcome with utmost attention. The tendency to reward only those who are good at fire fighting is also being curbed. Organizational tendency to work towards minor improvements is no doubt laudable. But the need of the hour is to register ‘quantum leaps’ from fixing the products and services and meeting minimum acceptance levels, to breakthrough processes that would produce not only defect-free but also value-added products and services. Further, managements have been focusing for too long on averages. They are satisfied when the management information systems throw out average performance figures with improving trends. While such an approach is desirable, it lacks focus on managing process capabilities, which can be measured only through deviations at every process step. It is this attention to deviation that has resulted in the development of process enhancement initiatives like Six Sigma. It is fashionable to exclusively blame top management for failures in breakthrough improvements. While it has a responsibility to provide the drive, successful process enhancements are the outcome of appropriate support at all levels, reviews, recognitions and rewards. Global leaders are increasingly addressing human resources as an asset. The competitive realities in a rapidly changing environment demand customer and market focus, as shown in Fig.4, assisted by flexible leadership, team work, defect-free performances, empowerment and innovation. Defects have a way of multiplying and the defects in one part of a business system create problems elsewhere. Most people in business then spend a large proportion of their time correcting these defects, looking for things, checking why things are going wrong, rectifying, redoing, apologizing to customers, etc. It has been estimated that about one-third of all effort expended in most businesses is wasted because of this so called fire fighting. The benefits of doing things right first time, and every time, are enormous. Enlightened global companies are not only overcoming this lacuna but also focusing on innovation as a tool to be ahead of competition. There are several outstanding examples like Sony who encourage their inventors to convert every new thought into a prototype within two weeks. Innovation is the key to keep pace in the race for excellence.

CUSTEMER’S STATED AND IMPLIED NEEDS

OPERATING, CONTROLING AND IMPROVING PROCESSES

CUSTOMER PERCEIVED VALUE

Figure 4 : Customer – Focused Processes

Innovation by itself has gone through transformations. In today’s approach, continuous innovations address all the processes related to management commitment and organizational operations. It is observed that innovation focus often leads to dramatic improvements, far above the recorded achievements through conventional continuous improvement processes. Profitable business growth is a result of addressing to productivity growth with innovative process focus, coupled with value growth for customers. Commitment to Excel Excellence is described as doing the right things right, selecting the most important things to be done, and then accomplishing them cent per cent correctly. Excellence is not attained simply by doing what is required. It is achieved by doing beyond what is required. Excellence is not settling for anything but the best. Demand the best for oneself, because others are demanding only the best. Albert Einstein once said that great spirits have always encountered violent opposition from mediocre minds. But it is amazing what ordinary people can do if they set out without preconceived notions. Good is not good where better is expected and, when motivated, people give out more than what you expect. As Bernard Shaw said we need not always blame circumstances for the position we are in. Successful people who got on in this world are the people who get up and look for the circumstances they want, and if they can’t find them, make them. This is equally true for successful global organizations. .

Indian Experiences When we look at the above concepts and thoughts in Indian context, we have been witnessing during recent years an increasing number of organizations and individuals demonstrating

competences to propel their performances to global levels. Some of them have even set benchmarks for others to emulate. Currently, we have an explosion of Indian talent. The whole world is standing up to applaud their outstanding performances. The leading ones have voracious appetite for achievement. They are continuously raising the bar and driving themselves towards enhanced performances, making it an endless journey. Further, modern Indian organizations are increasingly vocal in sharing their best practices among themselves and are quick to learn from global experiences. Let us start by appreciating Mumbai ‘dabbawalas’, who carry lunch boxes to office goers. 5,000 men deliver 175,000 lunches every day making only one mistake in every two months, which is equivalent to one mistake in 8 million deliveries; a service failure of less than a Six Sigma company. The drive for such a quality service from these daily earners is the desire to serve each customer without fail, so that he or she does not go hungry. They realize the need to serve every single hungry customer with commitment. They are aware that if they don’t take care of the hungry customer, someone else will. The country is also quickly learning and is passing through several meaningful transformations. ‘Keeping eyes and ears open’ is now a part of organizational strategy among Indian organizations and is getting increasingly adopted by enlightened managements. Further, they are becoming trendsetters to the nation. Being a part of global competition helps in recognizing the existence of fierce and ruthless market forces. The inefficient ones are being washed out fast without any trace. When India was pushed into the ring of competition in early 1990’s, the first few years have been essentially a period of learning and that of course corrections. Since then, the industry appears to be moving fast with several success stories. The Corporate India and its managements have changed hands from the age old tradition of managing-through-gut-feeling, into a new era showing firm belief that it is the total performance that would provide business differentiation. These new managements are increasingly showing undiluted faith in strategic management approaches, both in letter and spirit We have shining examples like Tata Steel, the winner of CII Exim National Quality Award of the year 2000, becoming a world class low cost steel producer in a matter of four years with top driven focus. The TVS group in South made India proud by many of its units meeting the stringent Deming Prize standards. Reliance is another example for achieving world class standards in its operations. Service managements like HDFC, with global focus, are increasingly competing to be in the good books of every single customer. Each one of them is continuously learning, quickly responding to the market needs and constantly re-engineering its operations to be ahead of competition. .The Indian IT industry may be recalled here, not only for its business results, but also for the way it is responding to intense challenges and fast changing market requirements. The leading ones have moved well beyond customer satisfaction and customer delight, and are constantly looking for ways and means to innovatively add value to customers. More importantly they are getting increasingly customer-centric, employee-centric and society-centric. Tata Steel’s Strategic Triad is providing company-wide focus with initiatives related to Change (aimed at mutating and improving furiously), Cost (aimed at ruthlessly cut wasteful expenditure)

and Customer (aimed to strive relentlessly build relationships and influence consumption). Tata’s Code of Conduct is well defined and well detailed for each employee to emulate. Aditya Birla Group, another leading industrial house in India, with an asset base of over USD 4.5 billion, 140000 employees and a turnover of over USD 6 billion has companies like Thai carbon Black Public Company Limited, located in Thailand with a focused programme called ‘Qualiy of Life’ (QOL). The QOL activities are helping the company to enhance the quality of life of its employees and their family members, through six focus groups covering agriculture, sacrifice, gratitude, Buddhism, punctuality and health. Reliance Industries Limited, an Indian petrochemical gaint, with a turnover of USD 34.5 billion in the 2008 fiscal and a profit after tax of USD 4.9 billion, showing an annual increase in net profit by over 63% over earlier year, is exhibiting focus on both costs and societal aspects. At present, 446 Six Sigma improvement projects are being executed across 14 manufacturing divisions, including 40 Lean Six Sigma projects. The company has 582 Black and Green Belts, with nearly 2200 team members providing active support for the success of these projects. While focusing also on technology, R&D and innovation, social welfare and community development is at the core of Reliance’s Corporate Social Responsibility. Tata Consultancy Limited, a USD 7 billion IT solution provider has been growing annually by above 20% over the years. With consolidated profits of over 1.25 billion and 108,000 employees, including 10,000 of foreign nationality, it is currently investing in high quality, eco-friendly infrastructure and is bringing the IT revolution to new, smaller cities like Bhubaneshwar, Ahmedabad and Cochin, thereby providing more opportunities for India’s skilled, young professionals and creating the conditions for direct and indirect employment creation. TCS is also pioneering Indian IT’s expansion into Latin America. It had set up a Global Delivery Centre in Montevideo in 2002. Currently the centre has over 1500 multilingual professionals and has been assessed at CMMI level 5. With the Global Test Centre capabilities, the Uruguat GDC now serves over 30 global and regional customers, as part of the Global Network Delivery Model. With its 40 years of global leadership experience, TCS’s focus on environment is also noteworthy. More than 10,000 TCS volunteers spent over 100,000 hours last year towards sustainable initiatives in the near-by communities. Infosys, another highly respected IT company in India, has been listed by Fortune magazine among the top 10 Company Leaders of 2007, for developing leaders in a global economy. With the revenues of over USD 4.18 billion, with the net profit crossing over USD 1.0 billion in the year 2008, the company has one of the largest campus hiring programmes in India. In the fiscal 2008 alone, the company received over one million job applications, of which 1,17,303 candidates appeared for a written test across campuses, 26,235 were interviewed and 18,118 were given job offers. Innovation and research are among the key drivers at Infosys. Software Engineering and Technology (SET) laboratories are at the forefront of research in software architecture, design and performance modeling. As an innovation driver at Infosys, the SET laboratories are focusing on three key aspects; namely, targeted research to address customers’ business programmes, centres of excellence to extend technology competence in specific areas and a co-operation process through which it partners with customers in anticipating, creating and leveraging exiting new technologies.

SET laboratories also encourage global interns to work on live technical and business projects. In fiscal 2008 alone, Infosys generated over 102 invention disclosures and filed an aggregate of ten patents in India and the USA.

Conclusion Leading performers and their managers are emulative. They surely have distinctiveness. The management concepts and practices, so well established for business sustenance, are being extended to make them globally relevant. The global business community is getting increasingly conscious of their business and social obligations with tremendous focus on customers and markets on one side, and employees and society on the other. Quality discipline is making a major impact on wide ranging societal aspects. India is showing increasing evidence towards continuous improvement, covering both products and services. The industry is also attempting to look external in its efforts and is setting new standards for total performance that can change the outlook of everything that is Indian. It is building powerful systems and processes around its core values, covering all key functions, with tremendous focus. The challenges are being passionately addressed.

References Arthur Andersen 1998,“Best Practices”, Simon & Schuster U.K. Ltd. Bryan D. Prescott 1999, “Creating World Class Organization”, Kogan Page Jeffrey K.Liker 2004, “The Toyota Way” Tata McGraw Hill Noel M. Tichy and Eli Cohen 1997, “The Leadership Engine” Collins Business Essentials Suresh Lulla 2003, “An Executive Handbook – World Class Quality” Tata McGraw Hill